Cincinnati, Oh. — July 11, 2002 — Microsoft Corp. today underscored its ongoing commitment to its customers, partners and developers in the traditionally underserved midmarket sector. Today’s presentation, the July event for the monthly Silicon Valley Speaker Series, featured David Thacher, general manager of customer relationship management (CRM) at Microsoft® Business Solutions. Thacher spoke about the upcoming release of Microsoft Customer Relationship Management, a solution developed for midmarket businesses.

Thacher also explained Microsoft’s overall CRM strategy, its value proposition, Microsoft’s ongoing support for partners and resellers, the strength of the Microsoft Business Solutions channel, and the increasingly important role of Web services in the CRM industry.

“We built Microsoft CRM on the Microsoft .NET foundation to open up tremendous opportunities for Internet service vendors and partners to extend their systems by using Web services,” said Thacher, who walked attendees through a demonstration of Microsoft CRM, the first Microsoft business application built on .NET. Thacher explained that .NET facilitates the easy connection of systems and enhances solutions with external Web services such as credit checking, analytics and marketing automation services that extend the core functionality of Microsoft CRM.

Using either Outlook®- or browser-based clients, Microsoft CRM will provide midmarket businesses with the tools they need to build more profitable customer relationships through increased sales and more consistent customer service. “This is a market that is largely underserved today, which creates a compelling opportunity for Microsoft and our partners to combine our collective experience and expertise in both CRM and the medium-sized to small-business marketplace,” Thacher said.

Thacher demonstrated the full-featured solution with its tight integration to Outlook and Microsoft Business Solutions’ business applications, and showed how easily customers can use and customize the solution. Microsoft CRM also complements Microsoft’s other CRM offerings for midmarket businesses. The solution, which is expected to be available in North America in the fourth quarter of 2002, can be used as a standalone product or integrated with Microsoft Business Solutions’ Microsoft Great Plains® business applications: Dynamics™, Solomon® and eEnterprise™ and eventually Navision® Attain® and Axapta®.

Thacher pointed out that CRM has always been an important area for Microsoft. “What we’re doing now is increasing our efforts to tailor a product specifically for midmarket businesses that enables them to pursue hot opportunities,” he said. Last year’s acquisition of Great Plains and today’s announcement of the acquisition of Navision Software A/S, a Danish company that’s considered one of the leading global providers of integrated business solutions for midmarket customers, have also contributed significantly to Microsoft’s ability to serve the space.

Joining Thacher was Terry Petrzelka, CEO and president of Tectura Corp., a premier Microsoft CRM reselling and ISV partner. Petrzelka discussed his company’s experience as a beta tester for Microsoft CRM and the benefits the solution will bring to his business. “We are very excited about how well Microsoft CRM addresses key customer needs, which makes it a great solution for customers and a good business choice for channel partners,” Petrzelka said.

According to Joe Outlaw, research director at Gartner Inc., “Gartner Dataquest estimates the respective penetration rates of CRM solutions by small business and medium-sized business are 2 percent to 3 percent and about 20 percent, respectively. These markets are at early stages of adoption with large opportunities for CRM vendors that approach the markets with the right products and messages. SMBs don’t want large-enterprise solutions at discount prices or with minor modifications, such as a few features turned off. SMBs want products and services designed, priced and delivered from vendors that understand their needs and are committed to meeting them.”

Packaging and Pricing

Microsoft CRM will have a straightforward yet flexible licensing model that allows companies to purchase what works best for them. They may choose among Sales, Service or Suite licensing at Standard or Professional levels of functionality. Microsoft CRM carries a pricing model designed to encourage companies that previously considered CRM systems unaffordable to start systems and expand them as their businesses grow. Pricing for Microsoft CRM ranges from $395 (U.S.) per user plus $995 (U.S.) for the server for the Standard Sales level to $1,295 (U.S.) per user plus $1,990 (U.S.) for the server at the Professional Suite level. Microsoft CRM will be sold and implemented through Microsoft Business Solutions’ reselling partner channel, and support will be provided by partners and Microsoft Business Solutions’ award-winning customer support team. The solution will be available on-premise or as a hosted solution through select partners.