Wow. I anticipated some level of technical difficulty when integrating with Microsoft CRM (support for which we recently announced) but didn't anticipate any significant legal issues. Apparently, Microsoft CRM 3.0 requires the licensing of something called an External Connector for each web server integrated with Microsoft CRM and I'm not the first to be confused about the applicability of this license in a Web-to-Lead, customer portal, or partner portal context.

The connector is about $15,000 USD, and amortized over 5 years comes to $250 per month. I *really* hope Microsoft CRM Live modifies this license to be more inline with current subscription-based expectations. Just getting SMB customers to try on-demand, loss leading features for $95 per month can be difficult enough. Don't make partners start that far in the red. They'll never adopt the platform.

Will the partner/ISV absorb the cost of externally integrating with MS CRM Live? Will the end customer? Answers to these questions are still not clear as we enter the 11th hour prior to Microsoft launching their on-demand CRM Live solution.

My suggestions:
* Implement a variable, value-based external integration licensing model. Not a "one size fits all" license.
* It still remains to be seen if Salesforce.com's 10% referral program is the right model to attract and retain partners, but it is more closely tied to value on a per customer basis.
* License the XML web service gateway separately from the core CRM application per external end-point. Implement a SOA friendly model that encourages Microsoft CRM customers to purchase additional web service connectors for multiple end-points at $750 per year (This is where I think Salesforce has missed a tremendous opportunity to license their API to Professional Edition customers and is the most griped about integration topic).