Microsoft announces update to Dynamics CRM Online, cloud-based rival to Salesforce, Oracle

Microsoft announced the worldwide availability of its Dynamics CRM Online on Monday. The software is the cloud-based version of Microsoft Dynamics CRM 2011, and will be released globally both in on-premises and partner-hosted versions on February 28.

Dynamics CRM Online first launched in 2008 (after shedding its original "Live" moniker) to compete in the burgeoning business of cloud-based Customer Relationship Management software where Salesforce and Oracle also sought to establish dominance.

And it's a fiercely competitive business indeed. Last May, Microsoft filed a patent infringement lawsuit against Salesforce, which could have been a defensive maneuver after Salesforce acquired Jigsaw, a company whose technology both Microsoft and Oracle could have licensed for their cloud-based CRM offerings. Salesforce subsequently fired back at Microsoft with a countersuit, but ultimately settled amicably without disclosing each other's terms.

Exactly one month later, Microsoft launched the beta of Dynamics CRM 2011. Microsoft is angling Dynamics CRM Online as a product that is both affordable and easy-to-use.

"What we hear from customers is that they are looking for increased user productivity, better integration with existing tools and technologies, and more flexibility and affordability when it comes to their CRM systems," said Michael Park, Corporate Vice President of Microsoft Business Solutions. "They are struck by the overwhelming amount of information and hype in the market, which is leading to confusion and frustration when trying to determine which CRM solution is the best fit for their businesses."

Microsoft says both Dynamics CRM 2011 and CRM Online offer familiar and connected experiences, through the use of the Ribbon interface, a native Outlook client, interoperability with Windows Azure, integration with Microsoft Office Communicatior and Windows Live Messenger, contextual SharePoint capabilities, and a new Microsoft Dynamics Marketplace for finding and deploying extensions and applications.

In terms of affordability, Microsoft is licensing Dynamics CRM Online for $34 per user per month. In the company's "Cloud CRM for Less" initiative, Microsoft says this is as much as 72% cheaper than its competitors.