How Far Can Microsoft Go?

Source: Optimize By
Josh Greenbaum, principal of Enterprise Applications Consulting,

It’s still dancing with SAP but there’s no telling how long the music goes on

Microsoft’s enterprise software business unit – recently rechristened Dynamics – is still small potatoes compared to the rest of the Redmond giant’s product offerings. But competitors – and CIOs – are starting to take notice. The big issue – which has cropped up every few months since Microsoft began its enterprise software march in 2000 – is how far up the software food chain does the company want to go?
In other words, will Microsoft be content to just sell its former Great Plains, Navision, Axapta, and Solomon products – as well as the new upstart, MS CRM – to the mid-market? Or will Dynamics start knocking on the doors of the Global 1000 in an attempt to usurp SAP, Oracle, IBM, and others at the top of the food chain?

If you’ve been confused by the signals from Microsoft about its intentions, join the club. The last time I asked Jeff Raikes, the lord and master of Dynamics and the Office business unit as well, I got the standard reply: Dynamics will sell to the subsidiary and smaller business units of the Global 1000 in addition to its traditional mid-market customers.

But when I checked in with Microsoft’s competitors, what I heard was a vastly different story: Microsoft is starting to compete head to head with the big guys on some very big deals, and everyone anticipates that more is on the way.

Meanwhile, Raikes and SAP’s Shai Agassi recently shared a virtual podium to tout the wonders of Mendocino, a joint project that is positioning Microsoft’s Outlook as a strategic interface for some of SAP’s latest and greatest offerings. That love-fest seemed at odds with the fact that Microsoft has been positioning Outlook as the strategic interface for some of its latest and greatest offerings.

And so on.

All this confusion begs a simple answer, so let me give you one. Microsoft would like your business, no matter how big or small you are. And they’re willing to be very competitive about it.

Of course, such a simple answers requires some clarification.

There are two reasons why this “we’ll work with anyone” position is still not for public consumption. The first is that Raikes would love to avoid a public dust-up with SAP over the top end of the market. It’s better to let field sales duke it out, while the bosses cozy up to each other and tout the synergies of the relationship.

The second reason is that Dynamics isn’t yet organized to take on a really large, global installation. There are few if any partners that could handle such an implementation, and there are serious gaps in coverage for some of the features that a big deal would probably require.

But “yet” is the operative word. Microsoft will figure that out, just like they figured out how to take SQL Server from a desktop database to a serious competitor to Oracle and IBM. And once that happens, expect a call from your local Dynamics partner, if you haven’t gotten one already. Microsoft Dynamics is on a roll, and they’ll soon be rolling to a bidding war near you.