Microsoft Slashes Prices For Microsoft Dynamics CRMMicrosoft Slashes Prices For Microsoft Dynamics CRM

Microsoft took another step in its strategy Tuesday to gain share in the on-demand CRM market, announcing that it's slashing the license fees for Microsoft Dynamics CRM to resellers by 40%.

It's yet another sign of Microsoft's determination to go after market leader Salesforce.com.

Microsoft can't make real inroads, however, without the participation of its resellers. With the price reduction, resellers will now pay the company about $15 per subscription, providing them with potentially higher profit margins. Resellers offering Dynamics typically charge around $50 per seat for the basic package, although customization can drive up that cost to around $200 or so.

The move could prompt Saleforce.com to drop prices on the lower end of its product offerings. Gartner ranked Salesforce.com as the leader in the on-demand CRM market in a report issued earlier this year based on the quality of its software; Dynamics lacks some of the desired features in Salesforce.com that's allowed it to win more deals. But Salesforce.com's premium pricing of between $125 and $195 per user could create problems for the company as it faces increasing pricing pressure from Microsoft.

Microsoft also is working to get its first multitenant version of Dynamics -- version 4.0, also called Titan -- in the hands of resellers by year's end. With Dynamics 4.0, resellers can host multiple customers on one server, further driving down their operational costs for Dynamics.

At a Microsoft customer and reseller conference in Copenhagen Tuesday, Microsoft announced new European and Australian resellers for Dynamics that include EveryWare, Increase, JayThom, and Mondo.