The customer relationship management landscape continued its rapid evolution last week, as vendors rolled out new and updated offerings designed to give enterprises greater control over their customer relationships.

Microsoft Corp. announced last week its long-awaited Dynamics CRM 3.0, which brings a hosted capability through partners, rounds out the suite with marketing capabilities, and adds new customization and integration capabilities that will allow Microsoft to sell into larger markets. And Salesforce.com Inc. will announce this week its Sandbox software, which provides on-demand testing capabilities for its AppExchange applications.

Microsoft is turning to partners to provide its Dynamics CRM 3.0 hosted services. However, what Microsoft provides to partners with Dynamics CRM 3.0 is a single-tenant model, which means upgrades come on a one-off basis, as opposed to the more common multitenancy model in vogue with most hosted software providers.

"Salesforce.com runs multitenancy where everyone is on the same code base, so when they do an upgrade, everyone gets the upgrade," said Liz Herbert, an analyst with Forrester Research Inc., in Cambridge, Mass. "For Microsoft, the plus is that partners can be hosting vertical solutions, so the buyer gets hosted, vertical offerings. The downside is that because everyone is running on their own code, when it comes to upgrades, [partners] need to distribute that upgrade or patch to all users."

Salesforce.com agrees with Herbert's assessment.

"If there's anything we've learned in doing software as a service, [it's that] you can't try and soft-host client/server applications and try and make it scale," said George Hu, vice president and general manager of applications at the San Francisco company, which Microsoft has vowed to beat. "That plays out a lot of ways in how well the technology scales. With single tenancy, you have to upgrade every single box."

For Microsoft, however, Dynamics CRM 3.0 is a "very, very major release," said Brad Wilson, general manager for Microsoft Dynamics CRM, in Redmond, Wash. "Up till now we haven't offered a full suite; it was missing one of the three core elements of a core suite," said Wilson. "At the platform level, we've done a tremendous amount of work to make sure you can build new [customizations] very easily by adding new system objects without writing new code. You can add system objects, define relationships [and] have Web services generated without writing any new code."

Sandbox, available for $25 per month for current enterprise CRM users, enables various components to be brought over from the test environment to the production environment. It works with any of the applications in Salesforce.com's AppExchange environment, the company's on-demand application marketplace. It will replicate any native application that Salesforce.com or its customers have created—with the exception of composite applications, Hu said.