So Microsoft's rebrands its years-old SaaS offerings and we all jump on it and cover it as news. The press does this for a lot of reason, not the least of which is well, it is news. Someone has got help the enterprise keep track of Microsoft's endless list of online initiatives. But one interesting take on the news, from InformationWeek's Mary Hayes Weiser, is that the "Online services" announcement was just smoke and mirrors. The real SaaS play, she says, is Microsoft Dynamics Live CRM, formerly code-named Titan. This is Microsoft's answer to Salesforce.com announced in July. Microsoft boasted that Dynamics Live has over 100 customers.
She notes that Dynamics Live CRM is Microsoft's only "multitenant" offering, meaning that customers share the application software while their data remains separate. This software sharing drives down costs (Dynamics Live CRM is priced at $39 to $59/month per seat), but the separate data stores offers security, flexibility - all those things that enterprises want to see happen with their data. (*Note, this is not to say that Dynamics Live CRM itself is somehow more secure or flexible than other methods. But that's the reason behind the multitenant modality.)
So right now, 100 customers doesn't make Dynamics Live CRM much of a threat. Perhaps it never will be. Salesforce.com is hardly standing still, and has upped the development ante for itself, allotting $25 million toward startups that build apps for it. This is an obvious direct response to Microsoft's Dynamics Live CRM strategy - which is to have its mega-channel sell Dynamics Live CRM to SMBs based on lots of third-party and custom software. But the multitenant thing is worth watching, Hayes Weiser says:
"But the level of CRM Live's success, unquestionably, will have an impact on Microsoft's overall SaaS strategy, and whether it sees multitenant architecture and subscription-based pricing making sense and producing palatable profits for other types of business apps."
