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Microsoft looks to poach customers with aggressive pricing

8/10/2014 by


Microsoft has created an aggressively priced CRM Online product bundle that includes both Office 365 and its Power BI tool, in a bid to steal customers away from rival

The new Sales Productivity package is being offered temporarily for US$65 per user per month. That compares to’s Professional CRM edition, which is priced at $65 per user per month but doesn’t include either an office suite or a stand-alone BI (business intelligence) product. Existing Office 365 customers can upgrade to the Sales Productivity bundle for $45 per user per month.

Microsoft’s offer comes just days before’s Dreamforce conference, where it is rumored to be announcing a new analytics cloud service. While the conference tends to attract the vendor’s most committed customers and partners, Microsoft clearly wants to draw a contrast between its offering and’s to anyone who might be on the fence.

“From a competitive standpoint this should signify to the market that Microsoft is getting scrappy,” said Fred Studer, general manager of Dynamics product marketing, in an interview. “We’re putting our money where our mouth is. If you’re a customer and you’re thinking about renewing in the next 12 months, you have to talk to us.”

It remains to be seen how, if at all, will respond to Microsoft’s pricing gambit.

It’s hard to dismiss out of hand what Microsoft has done as merely a gimmick, according to one observer. “From a price war perspective and customer value perspective, it’s very compelling,” said analyst Ray Wang, chairman and founder of Constellation Research.

That said, the two vendors are competing on more than simply a price-versus-features basis, Wang said.

“We have a lot of customers choosing Dynamics CRM for deep integration to Office 365,” he said. The fact that Microsoft offers both on-premises and cloud CRM deployments is another factor for buyers, he added, although the pricing bundle announced Wednesday doesn’t involve the on-premise version.

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