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Microsoft will on Tuesday make another effort to reinvigorate its slow-growing business applications division, Microsoft Business Solutions, with the launch of a new version of its customer relationship management software.

By tying the software closely to Outlook, the e-mail and calendar software included in Office, the launch also marks a new attempt by Microsoft to win over more users by drawing on the broad use of its desktop software.

However, the factors that have held back Microsoft’s growth so far in the applications business, where it competes with giants such as SAP and Oracle, could continue to hamper it, according to observers

“Microsoft’s biggest problem is its [sales] channel,” said Bruce Richardson, chief research officer at AMR Research.

Since it sells mainly through partners, the company does not have the close links with customers that rivals enjoy, he said, adding: “The good news is, it has a lot of people selling software; the bad news is, it loses its relationship with the customer.”

Revenues at Microsoft Business Solutions, one of the company’s seven business divisions, grew by only 5 per cent last year, to $793m, or 2 per cent of the company’s total revenues.

The former head of the unit, Doug Burgum, was moved to a new position as chairman of the division last week, and Microsoft said it was searching for a new executive to run the business.

The new CRM software – used by companies to manage their sales and marketing functions – has been closely linked to Office, which has 400m users around the world, said Brad Wilson, the Microsoft general manager responsible for the product. “All CRM users spend half their day in Office and Outlook,” he said

“It will appeal to anyone who wants to use CRM software but doesn’t want to learn anything beyond Outlook,” said Mr Richardson.

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