Microsoft  Tuesday plans to begin shipping Microsoft Dynamics CRM 3.0, finally releasing to customers the first major update to the CRM software Microsoft launched three years ago.

Microsoft CRM's 3.0 version fills in functionality gaps that had left Microsoft lagging behind its midmarket rivals. The update adds a marketing automation module for direct marketing and a service scheduling module to coordinate staff schedules. It also fixes glitches that had frustrated customers, such a problematic synchronization technology for remote users.

Microsoft partner Mike Snyder, the principal of Chicago services firm Sonoma Partners, cited improved Outlook and Office integration and the ability to add custom entities to Microsoft CRM as two of the most useful enhancements. Custom entities allow users to create parent objects to which customer entries can be linked. For example, a user can create an apartment building object and link to it profiles of the building's occupants. Previously, creating such objects required custom programming. Now it can be done by an administrator without any coding.

Microsoft CRM 3.0 finally brings to fruition Microsoft's long-promised seamless links between CRM and Outlook, Snyder said. Customizations made to CRM will now carry over into Outlook, and the two applications share a nearly identical look and feel, those who have seen early versions of CRM 3.0 said.

"You really can't tell where one ends and the other begins," said AMR Research analyst Bruce Richardson.

Customers who bought Microsoft CRM soon after its launch have had a long, often frustrating wait for substantive improvements. Microsoft put out a point release in December 2003 to fix glitches and add in a few new features, but it scrapped a planned 2.0 release to spend additional development time leaping straight to Version 3.0.

Door maker Designer Doors bought and deployed Microsoft CRM several years ago but put the software back on the shelf after running into a host of problems - most painfully, synchronization glitches that made the software impossible for remote workers to use.

"We had put a lot of effort into making this our centerpiece for sales and marketing. It's been expensive for us to find workarounds," said Michael Kruger, information systems manager for the River Falls, Wis., company.

The IDG News Service is a Network World affiliate.