SAP and Microsoft Grow Hosted Partner Networks

by Angela Eager

SAP and Microsoft are expanding their hosted application partner networks, with Microsoft growing outside the US while SAP expands in the US.

At Microsoft's European Convergence conference, it announced several new international partners who will serve up hosted versions of the forthcoming Microsoft Dynamics CRM 4.0 release, plus their own extensions.

The all-new CRM 4.0 (formerly known as Titan), which is due for release later this year, will be based on modern .NET architecture, plus multi-tenancy. The same code base will be used for on-premise and hosted implementations.

Microsoft is also slashing the fees it charges partners who offer hosted CRM services, from $25 per user per month to $15, which represents a 40% drop. The reduced price offers partners more scope when packaging the base CRM application with their own extensions because they can potentially offer both CRM plus extended services (back-office, vertical, or regional-specific extension) for the same price as other providers offer CRM-only services. It also helps Microsoft up the ante in the nascent SaaS application pricing/functionality war against players including Salesforce.com, NetSuite, and now SAP. Few players offer just CRM as a service.

Microsoft first tackled the pricing issue earlier this year when it announced pricing for Dynamics Live CRM, the multi-tenant, on-demand CRM service Microsoft hosts itself for its US and Canadian customers. It charged $59 and $44 per user per month for the Enterprise and Professional Editions respectively but also offered a introductory price of $39 which will apply throughout 2008. Each price point was lower than that offered by Salesforce.com.

Microsoft said Live CRM is geared toward smaller customers that require less in the way of customization and extended functionality. Customers with more sophisticated needs are encouraged to work with partners. There is still no word of when Live CRM will be available outside the US and Canada.

Anxious to make up SaaS ground following its late entry into the area in September with its Business By Design suite, SAP is also ramping up its partner network. It has signed up 13 partners in the US to help it established its SaaS business, tapping into its existing network of All-in-One and Business One resellers.

Described by SAP as "early partners" of SAP Business ByDesign, they have signed memoranda of understanding with SAP and are currently developing business models for Business ByDesign. SAP plans to include SAP Business ByDesign within the SAP PartnerEdge program.

Omega Business Solutions is one of the early partners. Operating in the Pacific northwest, it has been a Business One partner since 2003. "Our support of the roll-out of SAP Business ByDesign will expand our existing portfolio," said Omega president Forrest Koch. "In contrast to SAP Business One, SAP Business ByDesign is addressing customers that do not want to operate and own IT infrastructure. We plan to establish our own sales model that will allow us to integrate our core competencies