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                                    Thursday, December 13, 2012

                                    Four Needs Pushing Microsoft Dynamics into Large Enterprises

                                    Early in November, I attended a series of analyst briefings offered by Microsoft Business Solutions (MBS), outside of Seattle. The briefings and interviews with MBS executives  provided an opportunity to catch up on where Microsoft is going with its Dynamics line of business applications. Coming away from the event, I was impressed with several overall trends that are encouraging Microsoft to move up-market, into territory that for many years has been dominated largely by SAP and Oracle.

                                    I recently developed these thoughts more fully in a new research report at Computer Economics, Microsoft Dynamics Stepping onto Enterprise Turf. This post provides a brief introduction.

                                    Evolving Market Solutions

                                    In the early 2000’s, Microsoft jumped into the business applications market by making acquisitions that brought Great Plains, Solomon, Navision and Axapta into its product portfolio. These products, aimed at small and midsized businesses, established the perception that Microsoft was aiming its business applications primarily at smaller companies. When it came to enterprise applications for global organizations, Microsoft was viewed as out of its league. Those were markets for players such as SAP, Oracle and other vendors with multinational capabilities.

                                    But the market landscape is changing. Over the past year, the Microsoft Business Solutions (MBS) division has been demonstrating that it is capable of delivering two of its business applications—Microsoft Dynamics AX (the descendent of Axapta) and Microsoft Dynamics CRM—to large and multinational organizations. Moreover, Dynamics product enhancements now rolling out will accelerate this trend.

                                    Four Needs Encouraging the Up-Market Move

                                    There are at least four customer needs that create an opportunity for Microsoft to move up into larger enterprises, as shown in the figure nearby.
                                    • Multinational localizations, formerly a requirement only for large companies, are being are increasingly demanded even by small businesses.
                                    • The desire of organizations large and small to manage their people, facilities, and equipment as one global resource pool.
                                    • The continuing pursuit of improved productivity and tighter control, through worldwide business process consistency. 
                                    • The need of global organizations to have operating systems that are appropriate to serve the needs of both their large and small operating units.
                                    The MBS division continues, of course, to offer software that is aimed at small and midsized businesses (SMBs), those with single-site operations or with limited international presence. Microsoft reseller and systems integrator partners often introduce Dynamics NAV (formerly Navision), Dynamics GP (formerly Great Plains), and Dynamics SL (formerly Solomon) in these situations, sometimes in combination with Microsoft Dynamics CRM for customer relationship management.

                                    Nevertheless, larger enterprises can now take Microsoft Dynamics under consideration when selecting a vendor for its enterprise business applications. In the large company market, it is Dynamics AX along with Dynamics CRM that form the solution offering. Although MBS is seeing success with large organizations in several industries, the retail sector appears to be particularly receptive to Microsoft's move up-market.

                                    Although the Tier I ERP providers--SAP and Oracle--are well entrenched in the world's largest corporations, if Microsoft is able to compete effectively at this level, it will give enterprise buyers additional choice and options that they have not had in the past.

                                    My full report discusses in detail the four customer needs that are driving Microsoft Dynamics up-market and three ways in which Dynamics now has become capable of serving these large organizations. Challenges facing Microsoft in gaining market share among larger companies are also discussed. The report concludes with examples of customers that illustrate the move of Dynamics into the enterprise market and recommendations for large enterprise buyers who are considering Microsoft Dynamics.

                                    Related Posts

                                    Microsoft Dynamics ERP on Azure: What Are the Benefits
                                    What’s new with Microsoft Dynamics AX 2012

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