Leveraging CRM as a Platform to Grow Your

BusinessFrank Falcone

Senior Product ManagerMicrosoft Dynamics CRM

Truly a ‘Software+Services’ Opportunity - CDN

On-Premise 5 year CAGR = -2.0%SaaS 5 year CAGR = 56.0%

Projected CRM Spending in Canada (Millions)

(SaaS vs. On-Premise CRM Growth) CRM ‘Software as a Service’ continues to gain momentum in Canada and is projected to grow from $13M in 2006 to over $100 M by 2011, a 5-year (‘06-’11) CAGR of 56%. IDC expects that by 2010, over half of all CRM spend will come from SaaS CRM.

Truly a ‘Software+Services’ Opportunity - US

2007 2008 2009 2010$0$5

$10$15$20$25$30$35$40

$7.2 $8.0 $8.8 $9.7

$28.3$31.0

$33.8$36.8

CRM Software CRM Services

**B

illions

of

US$

Sources: *Gartner Dataquest 2006, **Forrester Research, 2007

SaaS CRM revenue projected to grow to

22% of total CRM software revenue by

2010*

What this means for you…

• The market is shifting- From large-scale implementations to agile solutions that

drive immediate benefit

• S+S is a catalyst for change- Perception for buyers is that S+S is more affordable with

less risk

• “Choice” is the best strategy for long-term success- On premise, partner hosted, or Microsoft hosted

PARTNER BUSINESS MODEL

Independent Software Vendor

Microsoft Partner Business Models

• VARs add value to hardware and software products by providing consulting, customization, development, integration and support services.

Value-Added Reseller

• SIs create customized solutions by integrating disparate systems and technologies. SIs typically have functional and domain expertise.

SystemIntegrator

• ISVs develop unique intellectual property that they package in a custom application and repeatedly sell to specific industry verticals or customers.

Independent Software Vendor

• Service Providers offer infrastructure and/or application hosting and other services to customers.

ServiceProvider

• System Builders specialize in assembling complete computer systems based on components from multiple vendors.

SystemBuilder

• Small Business Specialists have expertise in marketing, selling, planning and implementing solutions for small businesses.

Small Business Specialist

ISV – Example

• James founded a 25 person software development shop about 7 years ago, based in Calgary, Canada, servicing enterprise and mid-market companies in the oil & gas industry. The company recently released a front-office solution based on Microsoft Dynamics CRM.

• Partner Level: Certified• Number of CRM Customers: 48• CRM Experience: Developing competency• Core Strengths: .Net development, oil & gas, back-office systems • Focus: Mid-market, enterprise, oil & gas

Amount (USD)

Oil and Gas Solution - 25 seats $55,000*

ISV Royalty Fees ($10,500)

Software maintenance & support

$11,000*

Implementation and training(100 hrs)

$20,000*

TOTAL: $86,000

Seats: 25Time To Implement: 1 month

Why James likes to work with Microsoft CRM:Great revenue and margin opportunities

– Attractive royalty schedule based on volumeSolid product

– Rich platform, takes advantage of .Net, Office Client and Server, SQL for reporting, and business intelligence

– Ease of development (Visual Studio, .Net, Workflow) – Flexibility of deployment (on-premise and hosted)

Great support – Training, certifications

*88% of revenue flows directly to ISV

PARTNER BUSINESS MODEL

Service Provider

Service Provider – Example

• Claus works for a 250 person infrastructure and application hosting company based in Denmark. His company hosts and manages email and business applications on behalf of companies based in Denmark, UK and the Netherlands. He partners with SIs for the consulting and customization work, as well as ISVs.

• Partner Level: Gold Certified• Number of Customers: 1,500+• CRM Experience: 4 years• Core Strengths: Infrastructure and application hosting, hosted

Microsoft Exchange, Microsoft SharePoint and Microsoft Dynamics CRM

• Focus: Mid-market, manufacturing, financial services

Amount

Private Label – 50 seats@€68 per seat, per month, 24 months contract

€81,864

Hosting Fees €42,978*

Microsoft SPLA Fees (€24,559)

Implementation and training by CRM Partner (200 hrs)

€27,288

TOTAL: €109,152Why Claus likes to work with Microsoft CRM:Great revenue opportunities

– Recurring fees from customers/private-label partners

Solid product– Built on Microsoft stack with multi-tenant capabilities– Common application platform for ISV solutions– Integration with SharePoint, Exchange

Great support – Large partner ecosystem, hosting documentation and tools

** In this example, CRM Partner sourced the deal, owns the customer and invoices them. CRM Partner pays the Service Provider a recurring monthly fee for hosting services.

Currency conversion rate of .6822 used on invoice example.

Seats: 50Time to implement: 30 days

Private Label Model**

Seats: 50Time to implement: 30 days

Amount

Hosted CRM – 50 seats@€68 per seat, per month, 24 months contract

€81,864*

Platinum support – 20 seats@€10 per seat, per month, 24 month

contract

€4,800*

Microsoft SPLA Fees (€24,559)

TOTAL: €86,664

Direct Model

*53% of hosting revenue flows to SP

*72% of hosting revenue flows to SP

Rapid implementation

Anywhere-access

Low, per user monthly fee

CRM Online

Control & ownership

Technology investments

Advanced integration

On-PremisePartnerHosted

Outsourced IT

Industry / Vertical configuration

Packaged solutions

The Power of Choice

Choose how you use itOutlook, browser, mobile

Choose how you get itSoftware or service

Choose how you buy itOwn it, rent it

Dynamics CRM: The Power of Choice

On-premise

CRM Onlin

e

Partner Hosted

Single code-baseacross all offerings!

CHANGE YOUR MIND AT ANY

TIME !

Microsoft Dynamics CRM Online

5 – 25 users 26 – 150 users 151 – 250 users

NO-IT Organizations

Workgroups

Departments

Small Businesses

Resource Constrained IT

Departments

Divisions

Mid-market Organizations

Resource Constrained IT

Departments

Divisions

Enterprise S+S Pioneers

Pilots

“Perfect Fit” “Great Fit” “Good Fit”

The Partner Opportunity

• Be part of the transition from on-site to S+S– Sell and service Microsoft CRM on-site while you

learn the new market for CRM Online

• Diversify Revenue Sources– Microsoft Services Annuity– Partner Services – Standard license margin for on-premise

The Partner Financial ModelAnnuity-based model for partners

• Partners will receive recurring annual

compensation for customers that they deploy on the

Live CRM platform

• Partners will receive 10% of the service revenue for

each user, with a special rate of 15% per user in

2008

• Payments will be made in advance on the first year

of 12 & 24 month contracts

• In addition, partners can also receive standard

software margin if the customer chooses to move

on-premise

Innovation, Investment & Partners

Microsoft Dynamics:• 291,000+ customers• 10,000+ partner ecosystem• Footprints in 132+ countries• 20+ years experience

Microsoft:• Three Aligned Business Units• Delivering Integrated Innovation• 57,000 Employees• 27,000 designers and developers• $7.6B in R&D• History of Pioneering Software Innovation

Microsoft Data Center

30 Day Free Trial of CRM Online

https://offers.crmlive.com/canadapromo

DEMO

The Power & Flexibility of the Dynamics CRM Platform

Thank you!