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An Elixir for Outlook Users?
By Susan Kuchinskas

January 9, 2006

Lots of business people say they “live” in Outlook. Microsoft’s (Quote, Chart) Elixir is designed to make Siebel CRM seem homey to them.

Microsoft’s 17,000 employees using Siebel sales force automation make it one of the world’s largest global deployments. But Microsoft sales staff saw entering data into the Siebel application as extra work, so they tended to use it as little as possible.

Redmond’s internal customers wanted a CRM system that integrated with Outlook, capturing information in Outlook and feeding it into Siebel. So, in 2002, Microsoft began a 32-month project to upgrade to Siebel 7.5.3 while creating a plug-in to unite Siebel with Outlook.

The result is Project Elixir, an add-in that gives users access to Siebel and other sources of customer data via Outlook 2003. After rolling it out internally in October 2004, Microsoft made sample code and resources public on Monday.

“Microsoft did an internal project to use Outlook as a customer relationship management client, they learned a few things on how to program Outlook 2003, and now they’re pushing it out to the world,” said Directions on Microsoft analyst Rob Helm.

Project Elixir uses a service-oriented architecture to transfer customer data among disconnected enterprise systems. An enterprise-wide service layer called Alchemy exposes the functionality of Siebel and other systems through a set of reusable Web services. Customer Explorer, the smart client part of Elixir, moves data in and out of different systems by connecting to the Alchemy service layer.

The features and benefits sound similar to what Microsoft is planning for Windows Vista, the next version of Windows expected to ship by the end of 2006. For Vista, Microsoft is touting the ability to easily share data and files among applications accessed by the smart client.

Office 12, the next version of Office that was released in beta on January 4, is an integrated set of applications, servers and services. Outlook 12, part of Office 12, will have improved access to SharePoint information, and the ability to automatically import tasks stored in other Microsoft collaboration applications, such as OneNote and Windows SharePoint Services.

RedMonk analyst Stephen O’Grady said that overlap among Microsoft projects is inevitable.

“But Outlook is a client with a massive footprint and an interface that lots of enterprise users are quite familiar with,” O’Grady said. “That’s why you’ve seen RSS aggregators like Newsgator focused on integrating RSS into Outlook simply because it’s the preferred interface for business users. I view this as a continuation of that trend.”

The timing of the release of an application built on Outlook 2003, just as Microsoft’s marketing is gearing up to push upgrades to Vista and Office 12, is odd. Helm said, “The Office development strategy hasn’t gelled yet, so they’re trying a lot of things and seeing what sticks.”

He pointed out that many businesses haven’t upgraded to Office 2003 yet, and Elixir could encourage them to move forward, while helping to lock in existing Office 2003 customers. Moreover, although he hadn’t seen Outlook 12, he said he expected Elixir would apply to it as well. “They’re not making massive changes to Outlook 12,” he said.

Microsoft said it spent a total of around $1.7 million to date on Elixir, on top of $40 million to upgrade Siebel. The company said it expects to get a full return on that investment within a year after it’s fully rolled out.

Microsoft expects that other companies will need to build similar applications from scratch, rather than using Microsoft’s code. In addition to sample code, it also made available a case study, guidance and a set of best practices for developing such an app.

While overlap with other Microsoft products might not be an issue, both analysts saw problems for partners.

O’Grady wouldn’t comment on whether Microsoft’s case study complaining that employees would only use Siebel for the bare minimum of data would offend the major CRM vendor. But he said, “Overlaps within Microsoft are one thing, overlaps with other partners is another matter. It remains to be seen how they react to this. For vendors that sell client/server tools rather than do CRM functions, this can and probably will be viewed by many as an incursion into their territory.”

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