Microsoft Dynamics CRM’s Q4 2011 Update Offers New Enterprise Options, a Mix of New Features

Microsoft wanted its partners at this week's Worldwide Partner Conference to know that all signs, both in company's actions through product releases and partner programs and in buyer trends, point to momentum in the Microsoft Dynamics CRM Online business.  Microsoft made the case this week for partners to join the push to cloud-based solutions, highlighting the product direction and new partner programs to facilitate the business transition.

In April 2011, 73% of Dynamics CRM seats were sold for CRM Online, according to Kim Smith, Microsoft Director of Cloud and CRM Partner Strategy at a WPC session this week.  And Microsoft officials pointed out more than once during WPC that Dynamics CRM Online trials convert 40% more frequently to paid subscriptions when they have a partner engaged in the process. 

Microsoft is also continuing to court partner sales of the subscription-based service by offering a 40% margin on Dynamics CRM Online subscriptions on the first year of many deals, compared to 12 to 18% normally, according to Jeff Edwards, director of channel strategy for Microsoft Business Solutions.

The strategic decision to begin offering Dynamics CRM Online with Office 365 will have a variety of effects on the products and the partners selling them.   Rob Helm, managing vice president of Directions on Microsoft, believes the connection between the offerings will bring in both partners and customers from both sides. "Partners are more likely to get CRM Online customers to sign up for Office 365, but customers of the combined offering will be added from both [the Office-focused and Dynamics CRM-focused VARs]," Helm said.                                                                                 

Helm sees the streamlined licensing of CRM Online with Office 365 as a tangible benefit in the upper end of the market.  "Before now, CRM Online hasn't been as generous for licenses that [enterprise customers] already own," says Helm. "So moving in the direction of the Office 365 approach will make it easier to move from on-premise [to the cloud].  With enterprise agreements, this will be the main vehicle for selling Office 365 - making it as seamless as possible to move from on-premise to Office 365 without feeling [like they] need to walk away from investments they've already made in Office licenses."

The latest release of Dynamics CRM, the Q4 2011 Service Update, previously known by its internal code name "R7", will be released first online, and then later for on-premise. The new release is most notable perhaps for its availability in combination with Office 365 for enterprise customers.  It also reflects the new release cadence of 6 month rates for minor updates with changes deployed online first.

Microsoft is introducing newly developed activity stream functionality for CRM users and entities in the service update, which was demonstrated earlier in the week on another addition, the new Windows Phone 7 mobile client. Despite their similiarity to existing add-on solutions for activity streams, the new stream features are not an acquisition of an existing add-on solution like Sonoma Partners' Vibe or Neudesic's Pulse; however, Dynamics CRM product manager Craig Dewar acknowledges that Microsoft consulted with these companies about their plans, and that while there are overlaps in features of these, he believes there are still opportunity for third parties to extend the concept.  Microsoft has no stated plans to extend the activity stream data beyond standard Dynamics CRM entities, Dewar added.

The service update also includes new enterprise-level  capabilities like single sign on through Active Directory Federation Services, improved disaster recovery capabilities (via more data centers coming online in each region), and new industry templates in areas including wealth management.

Other new capabilities of the Q4 2011 Service Update include BI improvements with new chart types for dashboards and the ability to handle multiple timelines in charts; enhancements to the dialog feature with new data types; and corrections to the data de-duping algorithm.

In all, Directions on Microsoft's Helm believes that the path of Dynamics CRM, in combination with Office 365, is an indication that Microsoft now gets it when it comes to cloud services for the enterprise  and that they have a model for delivering other Microsoft products. "It could be a prototype for other products in the years to come," Helm suggested.

About Jason Gumpert

As the editor of, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at

Prior to co-founding, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. Jason has also held consulting positions at CSC Consulting and Monitor Group.

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