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Analysis Two companies are driving coverage of on demand business applications this year. Unfortunately for Salesforce.com, it isn't one of them.

Microsoft and SAP, with their planned Dynamics Live CRM and A1S respectively, are getting attention because they represent a move by the software old guard into a market popularized by Salesforce.com. Not only are they expected to clash with each other, but they'll also skirmish with the young upstart.

They are also getting attention because so little has been disclosed about their planned offerings. Beyond screen shots, SAP has revealed little about what A1S might look like or do. Microsoft this week, though, went some way to explaining Dynamics Live CRM. In doing so, Microsoft put partners in the spotlight and demonstrted just how much work remains to be done by Microsoft in crucial areas.

Microsoft, like SAP, has a large partner ecosystem that it risks losing by moving to a model where software is delivered as a service, direct for download.

Brad Wilson, Dynamics Live CRM general manager, said partners are vital to Dynamics Live CRM because - as in the offline world - they add the vertical customizations to the base product that help attract customers. Wilson's goal is for between a quarter and a third of Microsoft CRM customers to pick Dynamics Live CRM. Competitors are SAP, Oracle, a swath of companies in local markets and - of course - Microsoft's own existing Dynamics and Excel applications.

"There's been a lot of hype in the market place that on demand CRM is done. But there's no magic dust. Our partners can work on things like business flow report analytics, either on demand or on premises," Wilson said at WPC.

Few companies are in as good a position as Microsoft when it comes to the partner ecosystem, given the size of Microsoft's partner army and Microsoft's ability to keep partners onside with technology, financing and other support.

Partners are not only important to the success of Dynamics Live CRM but also in determining Microsoft's future Dynamics Live strategy. James Utlschneider, general manger of Dynamics marketing, said to expect on demand enterprise resource planning (ERP) on the back of Dynamics Live CRM success. "I can't imagine a scenario five years from now where we don't have a Live ERP offering," Utlschneider told The Reg.

In a sign of Microsoft's keenness - some might say desperation - to succeed, the company's devised pricing, programs and remuneration clearly intended to attract partners and build early market share. The $59 and $44 per user, per month list prices announced this week certainly undercut Salesforce.com - Salesforce.com goes lower at $10 per user but requires five-user sign-ups for 12 months.

On the back of this, Microsoft has devised incentives. Rather than the standard 10 per cent kick back on Dynamics CRM Live customer subscriptions, partners will get 15 per cent next year. Customer contracts will last two years, and Microsoft will remunerate partners at the beginning of each year for the first two years of Dynamics Live CRM, rather than monthly as will happen long term.

Partners On Demand

Microsoft is trying to drive business through partners. An early adopter program, which starts in the third quarter of this year and is free of charge until the start of 2008, can only be accessed by signing up through a Microsoft partner.

Microsoft plans a market place to help customers find partners' offerings. The market place, an expansion of Microsoft's existing online partner solution provider networks, will give partners a place to post Dynamics Live CRM customizations and for customers to rate and purchase vendors' products, Microsoft said.

Dynamics Live CRM will be customizable. With partners venturing into new ground, Microsoft is publishing a set of metadata and workflow-driven templates under its Microsoft Permissive License (MPL) to get them started and show what's possible. The first-two templates appeared this week, for manufacturing and the public sector.

For simplicity and reuse of existing Windows skills, Dynamics Live CRM and the onsite Dynamics will share the same code base, while there's integration with Windows, Office and SharePoint through Windows Workflow (WWF). Further integration is planned with the next Office, code-named Office 14. The interface has been re-worked for easier access to data by capitalizing on users' familiarity with Office - icons, for example, will become contextually relevant.

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