If the cloud computing movement is about the shift in technology, then the social web revolution is all about the people and their new forms of behaviour. Sure, it’s powered by some tech innovations from Web 2.0, but it would be a stretch to claim that the source code behind services like Facebook or Foursquare contains the magic ingredients that have caused the eruption of the social media volcano. To prove my point, just take a look at the following slide:

This “social customer stack” is taken from the Deriving Value from Social Networks session by Nikhil Hasija and Paul Greenberg. It was the best 60 minutes spent during Convergence 2010, hands down (even better than The Return at Tabernackle or The Geeks Band at Hard Rock Café). One particularly great thing about it was that there were absolutely no sceenshots of Microsoft applications, like in all other Convergence presentations. No attempts to push products like the Social Media Accelerator or anything else MS branded. Everything was built around the core message: what has changed since the invention of traditional CRM and why the customer is now in charge.

Social CRM is of course not a brand new concept. Having said that, it’s still far from an established or clearly defined concept. The following presentation contains much of the content that Paul was presenting at Convergence, so flicking through these should give you a good idea of the what, why, how of SCRM:

Be sure to also read Paul’s blog post titled “Microsoft Convergence 2010. Finally Getting Rid of the But….?” on ZDNet.

Returning to the social customer stack, it was quite delightful to see that Microsoft has been able to grasp the fact that the future of applications needed for any company to adopt a holistic practice of SCRM activities is not something they alone can engineer by themselves at Redmond. Maybe this can be partially attributed to the phenomena uncovered by the recent study by NetProspex, which found that Microsoft employees were the most social media-savvy in the world. If the company is able to transform this savviness into products and services that encourage coexistence and integration of applications from outside the Microsoft stack, then all those hours wasted by MS employees in reading each other’s Facebook status updates may actually deliver a nice ROI in the long run. Heck, maybe they’ll even survive beyond the looming death of the desktop operating system.

What does it all mean for Dynamics CRM? Well, your guess is as good as mine, but I believe the business applications world will be moving towards the app store model that we’ve seen grow quite popular in the consumer mobile arena. In order to get there, it’s going to require a little bit of work from Microsoft to make this transformation possible, but I see them taking the steps into right direction. With the Solution Management features to be introduced in CRM 5.0 (edit: now branded as Dynamics CRM 2011), the possibilities for creating real application packages that a CRM using organization could easily consume will be at a whole new level. With its Azure platform, Microsoft has a natural expansion tank in place to facilitate the growth of its CRM customers’ solutions to become a network of applications.

Even though it is somewhat disappointing that there doesn’t appear to be any Chatter type of functionality built into the upcoming version of CRM (guess you’ll need to use SharePoint 2010 for that) to foster the social enterprise approach for transparency on CRM customer data, perhaps this isn’t the most important thing Microsoft to focus on. Social CRM will not be a module you can plug into your existing application, it’s about being able to support whatever new methods of communication and collaboration emerge “out there” between companies and their customers. Get the right pieces in there and the ecosystem may just invite you to be a part of the conversation.

As a final note from Convergence 2010 Atlanta, I want to touch one subject of far less importance than the cloud or the “SocialX” future, but something which relates to them quite closely. If there’s one thing that has changed in conference audience behaviour during the past couple of years, it has to be the explosion of mobile applications for social networks. Yeah, I’m talking about Twitter et al. The backchannel of tweets during the sessions is nowadays something you can expect to take place in any larger tech oriented event. Some people are even writing books about it and building applications targeted to amplify and leverage this phenomena.

I guess Convergence is nowhere near SXSWi in terms of mobile geek penetration rates (just watch this video), but it would have been awfully convenient if Microsoft had provided complimentary WiFi for all attendees, to facilitate the emergence of a proper backchannel. Perhaps the U.S. crowd didn’t have any problems utilizing their data plans, but for an overseas attendee the ridiculous WiFi rates charged by the Georgia World Congress Center for 24h access were a showstopper. Luckily there were plenty of CommNet terminals around, which weren’t locked to browsing only the Convergence site. Tweets thru SMS during the session and a quick review of updates with #CONV10 hashtag during the breaks managed to keep my social network addiction at bay.

Girish Raja showed a cool demo in his Azure themed session about using The Archivist to collect a database of tweets for analyzing trends and other kinds of data mining activities. Perhaps by Convergence 2011 we will hear how Microsoft has managed to make use of the backchannel analytics. I’ll see you in that session then!

First of all, getting to Convergence 2010 in Atlanta this year was not easy, as I’m sure many fellow Europeans noticed. No, the problem was not in acquiring tickets or hotel accomodation, it was in the physical act of getting to Atlanta through the volcanic ash cloud that paralyzed the airspace in most of Europe the week before Convergence was set to start. I was in Kuala Lumpur at the time of the eruption and had to re-route myself directly from Malaysia to United States, without visiting my home base in Helsinki. The one week trip in South-East Asia turned out to be a three week trip around the world, which was a bit of a rough ride, but I’m glad to have made it to all the meetings I had planned, attended Convergence for the whole duration of the event and returning safely back home (with a huge pile of laundry in my luggage).

The event took place in Georgia World Congress Center in downtown Atlanta. Even though there were over 8.500 attendees to this years Convergence, which is a huge event on my scale, it still felt like GWCC was half empty, which should give you an idea of the sheer size of the building complex (check out some fun facts here). This meant a lot of walking between the sessions, but a small exercise never hurts. Feeding all the thousands of people cannot be an easy task, but the organizers pulled it off quite nicely with the help of the gigantic buffet hall and of course a countless number of coffee and snack stands everywhere. All in all, great surroundings for the event, which is probably why it was announced that also Convergence 2011 will be held in Atlanta.

The opening keynote this year didn’t deliver anything spectacular. GP 2010 was announced, as was the upcoming global availability of CRM Online, but all of this was very much business-as-usual. Kirill delivered basically the same Dynamic Business message as he did in Convergence 2008 Copenhagen, with the added flavour of cloud computing. There was a nice R&D Labs demo of a product concept utilizing a touch screen overlay for a “65 screen from NextWindow and a business application that allowed touch-based adjustment of sales forecasts derived from fictional social network data analytics. While I’m somewhat sceptic about companies reaching that level of sophistication in mining the social buzz level around their product lines anytime soon, the in-store utilization of touch screen UI’s presenting unified product catalog data in both web stores as well as retail outlets may not be such a distant concept anymore. Expanding the usage of ERP data to the new retail use cases with direct customer interaction will surely require a whole new mindset in application design, something which is might be considered the ERP equivalent of the Social CRM movement (more on that later).

Click the image to access video clips from Convergence 2010 keynote

“We’re all in”, that is the primary message from Microsoft these days. The “in” is of course the Cloud, which MS is considering to be at least as big a shift for IT business as the invention of the graphical UI or the browser based Internet. I think many people in the audience were still cautious when estimating the impact of cloud computing for their own field of information management and application development, which is an understandable approach at this early stage, when the hype surrounding the cloud is still at such a peak level. Nevertheless, everyone needs to keep their eyes open and observe what is going on in the world around them. For example, I guess almost all of the CRM related sessions at Convergence 2010 were using specifically CRM Online for the demos (except for a few local virtual machines that were probably needed in some cases). The big shift is that the Online offering has taken the center stage in Microsoft’s CRM product message, with the on-premises version slowly but surely becoming an option that is still available. Will we eventually see MS CRM going 100% hosted á la Salesforce.com?

A good example of the benefits of running your Dynamics CRM in the cloud instead of your own server behind the firewall are the recently announced portal accelerators for CRM Online. The package that initially includes Event, eService and Partner Management accelerators is presumably going to offer a full Portal Development Toolkit (see the MS Partner Network presentation for May 2010 release). What you effectively get is a CMS system for building websites with dynamic content straight out of your Dynamics CRM Online database, with out-of-the-box content hosting and CRM integration running on Azure. There have already been products like this offered by ISV’s like Adxstudio before (who, I believe, are also behind the portal accelerator development), but providing it as an extension to CRM Online can lower the barrier to such a level that I’m sure many customers cannot resist the temptation to try it out. Considering that there is no External Connector license model for CRM Online (like there is for on-premises installations), the total cost of having the basic web + CRM functionality could potentially be highly attractive for many SMB’s.

Since the Office 2010 wave of products was released very recently, there was of course some promotion of SharePoint 2010 and how it can be “better together” with CRM. On a practical level there wasn’t too much to show about the synergies, as the demos were along the lines of showing SharePoint search results in an account form iFrame. Useful, but hardly revolutionary. Many vendors are promoting their automatic document library integration products, but if you want my opinion, I’d say you should wait to see what CRM 5.0 (edit: make that Dynamics CRM 2011) will offer on that front before committing to ISV add-ons. All in all, the best demos related to Office 2010 were actually the PowerPivot examples of building dynamic data cubes directly on the client PC instead of relying on SQL Server Analysis Services. Very cool stuff, wish I could convince our corporate IM department to upgrade my Excel so I’d be able to try some of that “personal BI” magic…

That’s it for the first part of the article. Check out Part 2, where I’ll be discussing how the word “social” is changing the world around CRM and Microsoft.