Microsoft announced the availability of a new version of its Microsoft Dynamics CRM services, which now integrates social collaboration tools in the cloud.  The Microsoft Dynamics CRM November service update, which will be available for free to existing customers, will add Microsoft Office 365 experience and enhancements.

Along with the social collaboration capabilities, upgrades to the CRM tool also includes a more “transparent” user experience with Office 365, as well as improvements in the cloud for enterprise customers, says the software giant.

“What we had prior to now is separate environments for billing and provisioning of CRM Online and Office 365,” said Brad Wilson, general manager, Dynamics CRM product management group. “But now customers will be able to order the application within the Office 365 experience.”

With the new features, you can post questions, comments, suggestions and status updates.  The Automated Updates Activities, based on configurable event rules, allows Microsoft Dynamics CRM to publish information directly to the activity feed.

Microsoft has also added of micro-blogging capabilities that let clients access status updates and notifications regarding events and corporate actions, as well as accounts, opportunities and other CRM system records.  This feature will be available on Windows Phone 7, Outlook and through IE. With such social perks, Microsoft’s looking to be more competitive with the likes of Salesforce, which continues to grow its market share in the social enterprise CRM sector.

“Across Microsoft, we deliver social capabilities that help customers and businesses build more productive relationships,” said Wilson. “By bringing together new social collaboration capabilities in Microsoft Dynamics CRM with familiar collaboration technologies such as Office, SharePoint and Lync, businesses will be able to expand their relationships with customers and gain even deeper insight and understanding.”

Oracle, an existing Microsoft rival, is looking to ramp up its CRM offerings as well.  It acquired cloud based customer service software provider RightNow earlier this week, opening the door for Oracle to gain access to a more cost effective CRM platform and would provide opportunity to increase its presence in the SaaS market, particularly with small businesses.

Microsoft recently announced its Q1 results and Dynamics CRM revenue grew 17 percent during the same quarter. A leader in desktop OS, office products, Microsoft never evolved as a challenger for CRM and ERP players.  But the continuous rise of the Dynamics CRM Online and the just released new version of Dynamic CRM with social cloud based features has positioned Microsoft to better compete with Oracle Fusion CRM, SAP Sales on Demand and Salesforce.