Microsoft prices business software below rivals

SEATTLE (Reuters) - Microsoft Corp. said on Tuesday it will offer its new Web-delivered business software for tracking customers at below-market prices to catch-up with Inc. and other competitors.

The world’s largest software maker this quarter will make available Microsoft Dynamics Live CRM, the first version of its customer-relationship management software, which aims to tap into the fast-growing market for software delivered over the Web.

Microsoft said it will offer a professional version of its CRM Live software for a subscription fee of $44 per user per month although some companies will be able to get it free for 2007. An enterprise edition will go for $59 per user per month.

The software maker said its professional edition compares to a product that costs $65 to $75 per month from competitors, while comparable enterprise versions from its competitors cost about $100 per month.

Salesforce offers a professional version of its CRM software for $65 per month per user and $125 per month for its enterprise edition, but the company said it can’t determine if the prices from Microsoft are comparable until it sees what Dynamics CRM Live offers.

A pioneer in the Web-based software market, Salesforce is fending off challenges in the CRM market, or software that lets businesses follow sales leads and track inventory, from larger rivals like Microsoft, Oracle Corp. and SAP AG.

“I don’t think this is a battle that will be won on price alone,” said Bruce Francis, a spokesman for Salesforce.

The latest version of Microsoft’s Dynamics CRM software, code-named “Titan,” can run on a company’s own computer servers, on servers hosted by third-parties or on servers operated by Microsoft.

Redmond, Washington-based Microsoft will offer a free early access program for the professional version of CRM Live in 2007 to companies with five or more users. It will also offer the professional edition at a reduced $39 per month in 2008.

The enterprise edition, which allows people to access data even when the user is offline, will become available in the first half of 2008.

Shares of Salesforce were down 40 cents, or about 1 percent, at $44.05 on the New York Stock Exchange, and Microsoft was off 6 cents at $29.81.

Reporting by Daisuke Wakabayashi