Microsoft Business Solutions: Not Just For SMBs

As Wall Streeters gather this week at Microsoft's headquarters for the company's annual financial analysts meeting, it's becoming clearer that Microsoft Business Solutions (MBS) is extending beyond its original target of small- and mid-size businesses.

Though Redmond, Wash.-based Microsoft has always acknowledged that its CRM and ERP offerings would find their way into enterprises via subsidiaries or departments, the enterprise attack now appears to be for real. That's partly because, as MBS Senior Vice President Doug Burgum and other company executives acknowledge, Microsoft Dynamics CRM 3.0 is much more scalable and capable than previous versions.

Forty percent of Microsoft's second-half CRM revenue was in the enterprise, Burgum told CRN. "Our overall revenue increased, and the percentage of CRM going into large companies also increased," he said.

"I'd say we're letting the lid off CRM in terms of larger customers, in terms of number of seats. It's faster there than on the ERP side, but both are moving upward," Burgum added.

Microsoft said it added 50,000 new CRM seats in its fourth quarter ended June 30. Other company executives say the CRM takeoff mirrors SQL Server growth and think the Dynamics CRM product could become Microsoft's next billion-dollar product.The leading indicator is that Dynamics CRM 3.0 seems to be the darling of Microsoft COO Kevin Turner and Simon Witts, corporate vice president of Microsoft's enterprise and partner group. At the company's recent partner conference, Turner put a stake in the ground for Dynamics CRM: He said he does not enjoy writing checks to Oracle for Microsoft's internal Siebel CRM implementation.

"It burns me to have to pay Oracle for something that doesn't work," Turner told a gathering of Microsoft Gold partners at the conference. "I don't believe in paying the competition. Right now, it's the sales tool we have to use. But it won't be the sales tool of the future."

Burgum is pleased about Turner's support. "One thing that's great about Kevin Turner is that he was CIO at Wal-Mart before he became president of Sam's Club. And when he says stuff like that, he's not just a sales guy. He understands people need systems to be productive."

Some Microsoft partners concur. "Turner will clean up Microsoft's back-end systems. The dirty little secret is those systems are a mess," said one longtime East Coast Microsoft partner.

But Burgum reiterated that no Siebel customer--including Microsoft--can rip out legacy systems willy-nilly. "We see a lot of Dynamics CRM implementations occurring across the company. But like most organizations, the things sometimes called Siebel that's used by 30,000 people has a massive amount of customization. [Applications] like SAP and Siebel have been customized for so long that they're sometimes a more custom app than Siebel."As for ERP, Burgum said the ideal is to find opportunities inside large enterprises. "We're not saying, 'Let's go replace SAP at GM,' " he noted.

Still, at the Microsoft Global Sales meeting last week, the company celebrated head-to-head wins against Oracle and SAP in subsidiaries, he said. And many partners say the recently shipped Axapta 4.0--aka Dynamics AX 4.0--is the Microsoft ERP entry that's best able to compete with SAP in enterprise accounts.