By BUILDER Magazine Staff. Current expert predictions are that sales of customer relationship management (CRM) software will grow anywhere from $29 billion to $49 billion per year over the next few years. Much of the demand will come from small- and medium-sized businesses. With that kind of market potential, it was just a matter of time before Microsoft got into the business. That time has come, and home builders will be a targeted user group.

Early next year, the Redmond, Wash., giant will release MicrosoftCRM for companies employing 25 to a few hundred employees. While MicrosoftCRM is aimed at general business, BuildersCRM ( new company that plans to launch its own CRM software at about the same time--will customize Microsoft's offering for home building. Builders-CRM principal Mike Farrar, a former marketing director with Shea Homes, says his product will focus on mid-market builders with a volume of 300 to 500 homes per year.

Current vendors may have cause to be nervous. Bob Chatham, an analyst with Forrester Research in Cambridge, Mass., who wrote a recent report on the CRM market, predicts that Microsoft will be one of the top three CRM vendors in five years.

Farrar isn't putting all his bits in Microsoft's cache. He says that builders planning to integrate their CRM data with scheduling or other programs will want the Microsoft version. But the standalone BuildersCRM product will be more than enough for those who just want sales and marketing support.

Photo: Young-Min Yoon

Pricing for both versions will differ from that of other CRM vendors: Builders will pay a fee only after making a sale. Farrar also wants to offer a Web-based version by partnering with, a San Francisco-based company that hosts CRM software for access over the Web. Microsoft has been named as a potential competitor to, but Farrar says that Microsoft won't offer a hosted application for at least two years. The new company will also offer CRM management consultations. "CRM is not just a technology," says Farrar. "It's a business philosophy."