For example, Salesforce.com, Microsoft CRM Live and a slew of other CRM cloud services are only one class of cloud applications begging for add-on services. Each of these has strengths and weaknesses and most are targeted at the core use cases specific to their horizontal solution space. Software product developers working in complimentary horizontal spaces, like Marketing Automation, or in verticals like Manufacturing, Professional Services, etc. are well positioned to tap into these enormous customer bases and offer their solution extensions if they can host them in a cloud of their own and integrate effectively.

At Technoligence right now we are working on a project that will use Azure to extend a CRM Live solution with a custom quoting and proposal generation engine. It looks something like this:

Similarly, some of the work our partners are doing with Marketing Automation could be implemented like this:

Why Azure?

So why do I think Azure is the right cloud platform to build these businesses on, as opposed to something like a hosted datacenter or clouds like Amazon EC2 or Google App Engine? Here are a few main reasons:

• Platform, Not Plumbing: Azure provides software developers a clean computing platform for implementing solutions without having to worry about the plumbing needed to get their solutions in place. The combination of Web Roles and Worker Roles provide a highly scalable container set for implementing workloads.

• AppFabric As The Bridge: A huge advantage that Azure has, especially as a compliment to many of the SaaS solution clouds, is the ability to deeply integrate into customer on-premise computing infrastructure through what Microsoft calls the AppFabric. This service bus allows cloud applications and on-premise platforms to easily and securely connect and interact.

• Codename "Dallas" Data Feeds: A very exciting component of the Azure platform that Microsoft is in the process of bringing online are the "Dallas" data APIs. Imagine having access to map, weather, traffic, AP news, financial data, etc. to draw on that a custom add-on solution can use to extend a core SaaS application. I think this is going to be a huge opportunity for complimentary services and mash-ups in the near future.

I’m compiling a list of add-on solutions that could be started today on SaaS platforms plus Azure. Let me know your ideas and I’ll write up a post listing the best.

First a definition of "cloud" in this context: There are various ways to virtualize platform layers in hosted internet services that can qualify as "cloud." You can virtualize the traditional infrastructure, the server hardware, and provide a virtual server environment hosted in an internet connected datacenter. Beyond that, you can move the level of abstraction up a layer and virtualize the application or solution platform as a service, and build custom solutions on it. While infrastructure virtualization is interesting, the development teams using it still need to configure or build the application platform plumbing. Greater value is provided by offering a cloud solution platform environment, as less plumbing needs to be implemented (even if it still does need to be considered.)

So what does Microsoft offer?

Windows Azure

Windows Azure is a complete set of custom application plumbing available as a cloud service. The core services are a layer above the idea of a virtual server, providing a scalable application platform for developers to build out custom solutions without having to worry (much) about platform configuration and scaling issues. Adjunct services of the platform provide SQL data services in the cloud as well as the ability to extend application integration to on-premise solutions.

While there is a cost to using application services like these, the benefits are often great and come in the form of reduced application plumbing complexity, faster time to market, better application/service scalability, etc.

However, Azure is merely a platform, similar to a .NET application server or a WebSphere server. It is up to application developers to build custom applications from the platform up. It’s on this point that CRMLive has something slightly different to offer.

Dynamics CRM Online and xRM

What Microsoft has provided with Dynamics CRM Online is a hosted version of their CRM solution. What has come along with that is the ability to customize the solution down to its roots, building completely new business applications, if desired, that may have no relation to CRM. Microsoft calls this customization xRM (where the "x" stands for whatever you want it to.)

In CRM Online the level of customization is slightly more constrained that in the on-premise installations of the product, but there are ways around that. Integrating additional application functionality from outside CRM Online (e.g. from a separate could based application service) can round out the customization possibilities. A custom engineering configuration and quoting system I’m working on now uses this approach.

xRM is great for entity relationship based custom business applications. Reporting, workflow, and business user customization are built into the platform. xRM doesn’t makes sense for a wide variety of custom services and solutions (where you would use something like Azure) but for the class of business solutions it does make sense for the benefits are huge. The strong business application framework is a whole additional layer of plumbing that is already done, allowing the architects and developers to focus directly on the business problem.

Microsoft seems to be downplaying the apparent strengths of the xRM solution approach from their initial marketing messages a year or two ago. I’d expect this is in an effort to not confuse their development platform messaging (which I may be doing right now.) However, I think the feasibility of xRM, especially in the cloud, is huge under the right circumstances.

Let me know if anyone needs more details and we can talk further on either of these or any other cloud computing  platforms.

Here is the text from the original invitation. Let me know if you have any questions:

Best Practice Webinar for MS Dynamics CRM

Integrating Marketing into your Dynamics CRM

As a Microsoft Dynamics user, you may be considering implementing a marketing solution/add-in product for your CRM deployment. Many companies are beginning to explore an integrated approach for marketing and sales that goes beyond simple email blast integration.

Join SalesFUSION and Technoligence for this valuable online web clinic that will explore the best practices leading companies follow for integrating demand generation, marketing campaign automation and lead management directly into their Microsoft CRM deployment. This session will feature real-world case studies and cover the hottest topics in Marketing for Microsoft CRM.

Session Topics Include

  Email Marketing for CRM – to movement to nurture marketing

  The growing importance of web visitor tracking

  Lead scoring defined and how to implement it without a PhD

  CRM data as a driver for nurture marketing

  Understanding the B2B lead life cycle

  Understanding where….and WHY to integrate marketing/sales data in CRM

About the Speakers

Kevin Miller serves as EVP Marketing & Sales for SalesFUSION and has over 17 years of retail and B2B database marketing experience as well as CRM experience. Kevin is a principle for SalesFUSION, a leading B2B demand generation platform that integrates marketing and sales for Microsoft CRM.

David Micksch is the VP Marketing/Sales at Technoligence, a software solutions company specializing in Microsoft Dynamics CRM. David has extensive experience managing complex B2B sales and currently specializes in working with organizations to improve their implementation of CRM to optimize their sales and marketing processes.

With this, I’ve had more than a few questions from customers and partners about what xRM is and what it might mean to their business. I’ll try to answer that here from a business perspective, saving the technical perspective for future posts.

Background

Microsoft developed their Dynamics Customer Relationship Management (CRM) sales software  from scratch with the first release coming in 2003. A few versions later the CRM product was really maturing and a strange thing happened along the way. Microsoft software engineers did such a great job building the software foundation and exposed enough of that software foundation for customization purposes that other software companies and partners started using CRM just for the sake of that foundation. The underpinnings of CRM, while great at managing Accounts, Contact and Opportunities turned out to be well suited for managing any manner of similar business entity. A robust system for managing business entities and object, relationships between those entities and workflow and reporting around those entities opened up huge potential for all kinds of custom business solutions.

xRM is the underpinnings of the CRM product adapted to manage whatever custom entities and business objects your business might need to build an application around. Microsoft has added the xRM branding seemingly after the fact but it’s just the CRM product being used to manage Property, Patients, People, Projects or whatever else a business needs similar to the way it handles Accounts, Contacts and Opportunities.

So what does this mean for business? Here are three perspectives:

CEO: xRM can offer fast access to custom enterprise tools that map directly to the unique competitive advantages of a given business. Capture, tracking and management of what matters most to your business can increase productivity and get more done with more customers. xRM also exposes a rich model of key performance indicators and metrics enabling CEOs to get answers to critical business questions fast and make better business decisions.

CFO: Investment in custom software solutions and custom reporting can be costly. Investing once in a platform that can be leveraged for multiple custom business solutions greatly increases the ROI of that investment. With xRM you invest in a solid core and can shift IT spend further towards specific business value and away from building and rebuilding the plumbing needed to get work done.

CIO: Best practices in IT management have always focused on solidifying core enterprise frameworks and technology and using that core to build out custom solutions more quickly. xRM as a platform allows IT to skew resources further towards satisfying the business and focus less on plumbing support. Rich data model and analysis support in xRM solutions also allow IT to offer key information back to the business in ways that would be either costly or not possible with traditional custom solutions.

We are building xRM solutions for customers now so feel free to forward any other questions you have and I’d be happy to talk more about it.

With that in mind, we were very pleased to have our assessments validated by the April 3rd publication from Gartner of their CRM “Magic Quadrant” for customer service contact centers. For those not completely familiar, Gartner has long been a thought leader in evaluating enterprise IT platforms and solutions. One of the key tools they use to evaluate markets of related solutions is their Magic Quadrant model which compares competing solutions against each other in reference to two key characteristics in a 4×4 graphical model.

This round, the market of CRM solutions was evaluated for fitness across 15 variables summarized in two major axis: “ability to execute” and “completeness of vision”. As you can see here, Microsoft Dynamics CRM has moved into the all important upper right quadrant.

This “Leader’s Quadrant” rating for Microsoft is a strong, independent validation that Microsoft continues to be on the right track with CRM. My personal assessment agrees and I continue to be amazed by the business value we are able to quickly deliver to the businesses we work with.

Congratulations to Microsoft and the Dynamics CRM team!

I expect to put together a few blog posts on CRM over the next few weeks and wanted to start with an overview and some pointers to great material out on the web for anyone not yet familiar with Dynamics CRM in general. Down the road I’ll probably drill into accelerators, custom reporting capabilities, and custom business solutions built on Dynamics CRM as a platform in more detail.

I’d be interested to hear what others are doing with custom solutions on top of CRM lately. Business frustrated with some of the limitations of ACT or SalesForce have been migrating lately and hearing the good, the bad and the ugly of these migrations would be great.

History

Microsoft release a humble initial version of CRM in early 2003. At that point it was targeted at small businesses and didn’t extend too much farther than account and contact management. One important feature from a business productivity perspective was the early integration with Outlook, which has only improved over time and continues to be a strength of the solution.

By 2005 Microsoft made some significant upgrades to the overall solution in the 3.0 release. It was then that CRM was moved under the Dynamics line of business products. Support for hosted CRM was also as significant addition in that timeframe and was offered through the partner channel.

In 2008, the 4.0 version of CRM was introduced. The significant improvements to both the feature set and underlying platform continued pushing Dynamics CRM into serious contention as a best of breed solution at the small business level and has started it knocking on the door of medium/large businesses as a possible solution.

Feature Highlights – My Top Five

Outlook Integration

As you might expect, a key feature that Microsoft has done really well is integration with Outlook. In addition to Outlook exposing the CRM interface, in either an online or online/offline synched configuration, a toolbar is provided that integrates the account management, activity initiation and communication tracking capabilities of CRM into your Outlook workflow.

Incoming emails/threads can be tracked in connection to contacts, accounts, opportunities, etc. Contacts are integrated into your Outlook contact list, but only to the degree you wish, with the ability to filter to subsets such as "My Contacts" or more complicated queries involving any contact field.

Dynamic Custom Reporting

In addition to standard canned reports, this video gives a great overview of the add-hoc and custom reporting functionality available in CRM. User configurable custom reporting is very flexible and relatively easy to use.

In advanced configurations the CRM reporting capabilities can be extended through integration with SQL Server Analytics and/or Microsoft Performance Point to get even more power in reporting and analysis.

Customization and Extensibility

The capabilities for customization of CRM are designed to provide flexibility at the user, business administrator and developer levels. Many typical customizations of views, fields, workflows, etc. are designed to be accomplished by non-developer power users/administrators. Further developer levels of customization are fully supported and typically are portable between installations and through upgrades.

If you can stand to click through 11 pages, this introduction to the various customization capabilities of CRM is a good overview.

Workflow

Imagine a marketing event generates a contact lead. As a follow, up you might want to send a custom email the next day and follow up a week later with a phone call by one of your account reps. This kind of dynamic workflow can be configured right in CRM. Further custom workflow activities can be added on to CRM to provide access to complex custom actions. More background on workflow is available here.

Accelerators

One of my favorite and one of the most interesting aspects of CRM customization available now are the "Accelerator" packages. Posted on Microsoft Codeplex with full source code, the Accelerators are fully supported custom add-on solutions for CRM. Advanced Analytics, Notifications, and Enterprise Search configuration are among the eight accelerators currently available. We’ve begun deploying these internally and for our customers with great success. You can find them all at: http://www.codeplex.com/crmaccelerators

What other highlights have I missed here? Anyone else doing interesting things with CRM right now?