Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Thursday, March 13, 2014

Microsoft Broadens Dynamics CRM, Moves Up-Market

With three strategic acquisitions, Microsoft Dynamics CRM can now be considered a complete offering for sales, marketing and customer service. In addition, Microsoft’s CRM offering is showing its ability to move up-market into large enterprises.

These were two points that I took away from the Microsoft Dynamics Convergence conference last week in Atlanta, GA.

By way of history, Microsoft introduced its Dynamics CRM product in 2003, its first Dynamics product written from scratch, though it did not experience significant market uptake until several years later. Until the past year or so, Dynamics CRM was largely a salesforce automation system, with a bit of case management on the service side. As such, it was not well positioned against the CRM offerings of SAP and Oracle, which offered complete solutions. Though Salesforce.com also started as a sales automation system, over the past few years it has also built out its capabilities for marketing and customer service.

I saw the deficiencies of Dynamics CRM up close in 2010, when my consulting firm, Strativa, facilitated a CRM selection for a midsize high tech manufacturer. The company had actually implemented Dynamics CRM but decided to abandon it for lack of customer service functionality. In another CRM selection deal, in 2012, we didn’t even short list Dynamics CRM because of its lack of support for marketing and customer service.

Filling out the Footprint

But now, as the result of three strategic acquisitions, the picture is completely different:
  • Marketing Pilot: Acquired in 2012, Marketing Pilot is the basis for the newly announced Microsoft Dynamics Marketing. Product capabilities include campaign management, content management, approval workflow, media planning, email marketing management, and integration with sales force automation. The product also supports multichannel marketing, with social media management (e.g. automated posting to Facebook and Twitter) and digital advertising (e.g. integration with Google Adwords). With the latest version of Dynamics CRM, the product is completely integrated, with a consistent user-interface.
  • NetBreeze: This acquisition by Microsoft in 2013 allows organizations to monitor social media conversations of interest to the organization’s brands. It also provides “sentiment analysis” on social media conversations. In other words, are people speaking positively or negatively about the brand?

    Microsoft executives claim that Netbreeze is the only provider that does such sentiment analysis in native languages (five, at present). This, they say, is in contrast to competing offerings, which have to translate tweets (for example) into English, and perform the sentiment analysis on the translation. Anyone who has attempted to use Google Translate or Bing's translation engine to communicate in a foreign language knows the dangers of relying on machine translation. Netbreeze now forms the heart of the newly announced Microsoft Social Listening.
  • Parature: This most-recent acquisition, in 2014, brought a complete customer service solution into the Dynamics CRM product set, addressing a deficiency I wrote about last year. Parature, built exclusively in the cloud, supports customer self-service, knowledge management, issue management, and service workflow. The product is built with multi-channel in mind, with support for call center, web self-service, text chat, and social media channels.

    Parature is the basis for Microsoft’s newly announced Unified Service Desk. In a subsequent interview with Microsoft’s Bill Patterson, who has now been named Senior Director over the Parature operation, he indicated that Parature really doesn’t need much help to build out more functionality or even to integrate it with Dynamics CRM. The focus, he said, will be more on execution, raising its profile in the market, scaling its business operations globally, and training partners to sell and support it. Interestingly, Microsoft currently has no plans to migrate Parature from Amazon Web Services to its own Azure cloud. The product will interoperate with the rest of Dynamics CRM, no matter if the customer is running on premises or with Microsoft or partner hosting.
These capabilities fill out Dynamics CRM into a complete offering, although there are still partner products needed in some cases, for example, for field service, which Microsoft views more as an ERP function than a CRM function. Partner solutions are also needed for configuration, pricing, and quoting (CPQ).

Competing on Value

Although Dynamics CRM can now position itself well in terms of capabilities, there is also an economic angle to its market strategy. Microsoft is simplifying licensing for Dynamics CRM and releasing much of the new capabilities at no additional charge. Specifically, for Microsoft-hosted deployments, which comprise the majority of new deals for Dynamics CRM:
  • CRM Online Professional, priced at $65 per user per month for customers with 10 or more Professional users, will give users access to Social Listening at no additional charge. For on-premises customers (the minority of new sales), there will be a $20 per user per month charge. 
  • CRM Online Enterprise, priced at $200 per user per month, essentially delivers the whole enchilada: the core sales functionality, plus Dynamics Marketing, Social Listening, plus the new Unified Service Desk.

It will take one or two actual CRM deals to see how the new pricing and licensing works in practice, but as it stands it appears to be quite competitive. Buyers may find the pricing attractive against a similar bundle from Salesforce.com, where costs can rise quickly as Sales Cloud, Marketing Cloud, and Service Cloud are priced separately. Throw in a few AppExchange solutions and the total price can be quite steep. Of course, large customers can and do negotiate significant discounts. Still, Microsoft’s offer of a complete CRM solution at a reasonable price should work to limit the premium pricing ambitions of Salesforce as well as Oracle and SAP. And, that’s good for buyers.

A more complete run down on the CRM pricing and licensing can be found in a Microsoft blog post by Paco Contreras. 

Moving Up-Market

The expanded CRM footprint will certainly help Microsoft compete for CRM deals in larger enterprises. However, Dynamics CRM was already moving up-market even before these most recent announcements.

During Convergence, I had a chance to sit down with Patrick Berard, Senior VP Southern Europe at Rexel France. Though not a household name in the US, Rexel is a $18 billion distributor of electrical supplies, operating in 30 countries worldwide. Starting three years ago with its operations in France, Rexel implemented Dynamics CRM to provide a 360 degree view of its customers. It may not sound exciting except that Rexel, having grown through many acquisitions in various markets, has dozens of ERP and other transactional systems that contain customer information, in multiple languages. Bringing this information together for the first time in a single view was no small feat.

Rexel’s approach was not to disturb these transactional systems but to pull information from them into Dynamics CRM and make it available for real time display on desktops and mobile devices and to use it for sales force automation. The company also leverages Microsoft Lync and Yammer to create communities of interest around this customer information.

As good a case study as this is, Rexel may not be finished implementing Microsoft Dynamics. With Microsoft building out its CRM footprint, Berard plans to look at Dynamics Marketing to see whether it would provide a way to better manage technical specifications and other content. Finally, some of the ERP systems in Rexel operating units are “sub-standard” and candidates for replacement. Microsoft Dynamics AX may be a good fit for these divisions, which may lead to an even broader commitment to Microsoft throughout Rexel.

For a system that was only born 10 years ago, Microsoft has made great progress in building out a complete CRM offering. It positions well against SAP CRM as a smaller-footprint alternative. Against Oracle, Dynamics CRM has a simpler story to tell. There’s no doubt that Oracle has deep CRM capabilities, but they come in a variety of acquired products, such as Siebel, Rightnow, and Eloqua, as well as Oracle-developed products, such as Oracle Fusion CRM.

Against all competitors, including the market leader, Salesforce.com, Microsoft is signaling that it is willing to challenge their premium pricing.

With Microsoft now offering a complete CRM solution and demonstrating that it can scale up-market, there are few situations now where Dynamics CRM does not deserve consideration.

Related Posts

Microsoft Dynamics Move Up-Market: What's Missing? 
Four Needs Pushing Microsoft Dynamics into Large Enterprises
Computer Economics: Microsoft Dynamics Stepping onto Enterprise Turf
Update on Microsoft Dynamics Products and Plans

Labels: , ,

by Frank Scavo, 3/13/2014 08:35:00 AM | permalink | e-mail this!

 Reader Comments:


Dynamics CRM, moving up-market, I see akin to back-fitting business models with the ability to create certainty of demand.

Similar to how digital marketing driven businesses populate and mine alternative databases operating Hadoop to target customers with a blunderbuss.

It surprises me that after 40 odd years, we are not connecting the core MRP engines to customers direct demand and intentions?

"You can always count on Americans to do the right thing - after they've tried everything else." - Winston Churchill


Post a Comment

Powered by Blogger

(c) 2002-2018, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo, at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

My IT research firm, Computer Economics provides metrics for IT management, such as IT spending and staffing benchmarks, technology adoption and investment trends, IT management best practices, IT salaries, outsourcing statistics, and more.

Go to latest postings

Search the Spectator!
Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed RSS News Feed

Computer Economics
IT Spending Ratios by Industry and Company Size
IT Spending as a Percentage of Revenue by Industry, Company Size, and Region
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report


2014 Best Independent ERP Blog - Winner 2013 Best ERP Writer - Winner Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs

Key References
Strativa: Business strategy consulting, strategic planning
Strativa: IT strategy consulting
Strativa: Business process improvement, process mapping, consultants
Strativa: IT due diligence
Strativa: ERP software selection consulting and vendor evaluation
Strativa: CRM software selection consulting and vendor evaluation
Strativa: Project management consulting, change management
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Enterprise IT News: diginomica

Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
September 2015
October 2015
November 2015
February 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
January 2017
February 2017
May 2017
June 2017
October 2017
January 2018
April 2018
May 2018
January 2019
February 2019
Latest postings