Microsoft has previewed the next version of its CRM software, which is expected to reach customers by the end of the year. With CRM 3.0 will come a special edition for small businesses and a subscription-based license for hosting services.The decision to skip ahead to version 3.0 reflects the magnitude of the up-dates, said Brad Wilson, general manager of Microsoft CRM. Late last year, Microsoft had been preparing to release Microsoft CRM 2.0, but feedback from partners during the alpha period convinced Microsoft it should delay the software, IDG News Service reported. “A lot of what our partners had asked for were things that were already in our 3.0 road map,” Wilson said. “With this release, we really hit the vast majority of our goals that we announced a year ago.” The quick ramp up shows the importance Microsoft is placing on such business applications in a very competitive field with the likes of Siebel Systems, Oracle and hosted CRM vendor, salesforce.com.Microsoft is expecting these applications lead to other buys,” said Rob Enderle, founder of the Enderle Group. “This is a business-critical application that leads to other buys around it. If Oracle has the CRM business the vendor distributes the platform that goes around it.’The salesforce.com has also become important. “The pay-as-you-go companies operate extremely lean and they represent a significant risk (to Microsoft) and as a result, Microsoft has chosen hosting as part of its portfolio,” Enderle said. “They (hosted CRM applications) are particularly popular for mid-market companies.” Microsoft plans to demonstrate CRM 3.0’s new capabilities in Amsterdam at TechEd Europe, its conference for software developers, and at its Worldwide Partner Conference in the U.S., both later this week. The new version includes a treat for reseller partners: Microsoft said it will reduce the time and effort required to create tailored versions of the software for vertical markets, or to integrate it with other applications. Partners will be able to obtain the necessary software development kit for CRM 3.0 through the Microsoft Developer Network later this year. Customers will be able to buy and run the CRM 3.0 tool in two ways: either as a packaged product they run themselves, or as a hosted service they pay for through the new subscription-based license. They’ll be able to change their minds later, too, as the code for the hosted and on-site versions will be the same: only the license will change, Microsoft said. Microsoft has always made Microsoft CRM available for partners to offer as a hosted service, but that market has remained small.Analysts said the new version, which will begin going out to Microsoft’s partners this month, looks to finally make Microsoft’s features competitive with those of other midmarket CRM systems. “The new product has fixed a lot of the holes,” said Yankee Group Research analyst Sheryl Kingstone.One area Microsoft targeted for improvement was Microsoft CRM’s integration with Outlook: Customers said they preferred that the two programs look as much alike as possible, according to Microsoft’s Wilson. Kingstone said the user-interface changes look good. “It’s much more integrated and more familiar,” Wilson said. Microsoft has also worked to streamline the software’s deployment process, a change Kingstone expects to appeal to small businesses looking to support the software with minimal IT resources. Technology Industry