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ChannelCRM connects to Office365 (and Microsoft Office) i two areas
•Via Office365 Exchange Connector, capable of tracking mails, synkronize calendars and transfer contacts as a background job. Even without you opening Outlook nor ChannelCRM.
•Via ChannelCRM AddIn for Office, which adds CRM functionality within the Outlook, Word and Excel applications.
These connectors are setup on your demand. It's perfectly doable to use ChannelCRM without these connectors, but many find them of great benefit. And they are included in the ChannelCRM standard license.