Microsoft appears eager to take the battle to Salesforce.com and Oracle with regard to leadership in the fast growing CRM market. Microsoft Dynamics CRM, having achieved parity with both competitors in the eyes of the technology analyst community (see Forrester Wave below), has grown twice as fast as media favorite Salesforce.com over the past twelve months and recently crossed the one million user mark.

To “celebrate”, Microsoft announced, several weeks ago, a new promotion targeting current Oracle and Salesforce.com online customers with an offer of free Microsoft Dynamics CRM Online service for up to seven months for switching from their existing service provider. The seven months includes Microsoft’s standing offer of 30 days free service plus the new promotion of an additional six months.

Though the string attached to the offer is a commitment to a 12-month contract for Dynamics CRM Online, the savings on the first six months of the contract can be quite significant, meaning Microsoft is clearly smelling blood and playing to win in the customer care space.

While already considered to be the more cost-effective alternative among its peer group, Microsoft Dynamics CRM also owns the advantage of flexibility, at least against Salesforce.com, since Dynamics CRM is offered in both an on-demand and an on-premise model. Additionally, Dynamics CRM’s ability to easily integrate with Microsoft Dynamics NAV and AX, as well as Office and Outlook, delivers a productivity edge that is difficult for either of the other CRM platforms to claim.

Excepting the anomaly that is the 2009 market, most analyst estimates for CRM market growth remain in the 10%+ range for the near future. With that kind of opportunity at stake, it will be interesting to monitor how pitched this battle becomes.