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DALLAS—At its Convergence 2006 conference here, Microsoft has made few earth-shattering announcements around Software as a Service—thought by many to be a big topic at this customer-focused, business applications-based event.

That said, Microsoft gave a distinct nod to on demand software with the announcement March 27 of the next version of Dynamics CRM 3.0.

The upgraded suite brings two interesting enhancements: a new edition of CRM created for “hosters”—sort of—and a bevy of new adapters that bridge Dynamics CRM to BizTalk and then out to the rest of the ERP (enterprise resource planning) world.

The Dynamics CRM Professional Edition for Service Providers is “exactly the same as the Enterprise edition,” but has some extensions built in for easier deployment, according to Brad Wilson, general manager of Microsoft Dynamics CRM, based in Redmond, Wash.

“The extensions are [essentially] automated provisioning of servers for RAC-mounted CRM.”

The Service Provider edition is available to partners worldwide, with the idea that partners will implement the software and in turn offer hosted CRM to their customers.

The caveat is that this latest edition is still a single tenancy offering.

While opinions vary widely on the importance of single tenancy over multi-tenancy—there are those that sit firmly in the camp that software can’t be considered a service unless it’s delivered in a multi-tenancy environment, with lots of users on a shared infrastructure—Microsoft’s opinion is tenancy is of little consequence. At least for now.

“Tenancy doesn’t matter,” said Wilson. “The only place it does matter is how much money it costs to get service. The point is, a customer gets [CRM] out of a wire and that’s definitely software as a service.”

All protestations aside, Microsoft is planning a multi-tenancy version of its CRM software with the next major upgrade of the suite, dubbed Titan.

Click here to read more about Titan.

Due next year, Titan will bring three major upgrades, according to Wilson: Multi-tenancy capabilities; multiple languages on a single server; and “light up” capabilities with Office 2007 that take advantage of new business intelligence functionality.

Microsoft announced last week a delay in its Office 2007 release schedule—one that shouldn’t affect Titan, according to Wilson.

“CRM is not a snap purchase,” he said. “The vast majority of our customers are not upgrading on our cycle.”

The question is, with Titan taking on multi-tenancy, will the rest of Microsoft’s Dynamics ERP applications follow suit? Wilson seems to think so.

Read more here about Dynamics.

“CRM is a poster child for how Satya [Nadella, vice president of development, Microsoft Business Solutions] wants to deliver Dynamics,” said Wilson.

“But partner hosting is the core paradigm for how we will deliver SaaS.”

Just under a dozen partners worldwide have committed to this early edition of CRM for Service Providers.

As a group they’re taking a sort of hub and spoke approach to distribution, providing hosted services to their customers, as well as to other Microsoft CRM partners.

Separately, the connectors that are part of this CRM upgrade provide hooks across Microsoft’s Dynamics applications and into third party applications as well—specifically those from SAP AG, Siebel (now part of Oracle) and Oracle.

Available over the next year, the pre-built connectors, or templates, for integration into third-party ERP applications provides an adapter to BizTalk Server that defines the data mappings and process flows into and out of Dynamics CRM.

The concept of adapters into and out of Dynamics is not new—many exist currently.

The difference with this release, according to Wilson, is the inclusion of BizTalk, a platform that facilitates not only integration but process orchestration as well.

The Microsoft CRM adapter to Dynamics GP is available now, while two of the remaining three suite adapters—NAV and AX, are expected the first quarter next year.

The BizTalk Server integration with Siebel CRM is scheduled for the third quarter next year.

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