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Microsoft Dynamics Lines Up Against SAP, Oracle, And Salesforce

The vendor has hit its stride on the technology front and now must worry about how to compete in the channel.

I've just returned from the Microsoft Dynamics' Convergence conference, where the news about Dynamics' progress in the enterprise software market can be summed up as follows: The company's two flagship products--its Dynamics AX ERP system and Dynamics CRM--have reached a functional level that basically places them on par with the best of their respective categories.

This leveling effect not only puts Microsoft in elite company comparable in many ways to SAP, Oracle, and, but also effectively takes technology and functionality off the table with respect to its three largest competitors, at least today. This means that in all but the very largest enterprises--where only Dynamics CRM plays--Microsoft will win and lose deals based on the quality of its partner channel and their ability to provide support for local and micro-verticalized extensions of the Dynamics product line. The idea that Dynamics needs to play catch-up with its bigger brethren is no longer on the table.

That's good enough for now, but in a couple of years the playing field will shift even more, potentially giving Microsoft an important advantage. Dynamics' promise--laid out in keynotes and one-on-one meetings over the course of the conference--to fully support on-demand, on-premises, and hybrid deployments of AX, CRM, as well as GP and NAV, means that, starting approximately in 2013, only Microsoft will be able to offer pretty much any possible deployment model of its software from a single code-base.

This is an important distinction that may be hard for its competitors to deal with. SAP, Oracle, and won't be able to offer customers the choice of running their deployments on premises, in the cloud, as a managed service, or as a hybridized mix of the above across their core products--never in the case of Oracle and, and not for a while in the case of SAP.

While each of Microsoft's competitors has plans for a mix of on-premises and on-demand products, the breadth of choice they can and will offer will be much less clean. Oracle's Fusion will be deployable in a similar fashion to AX, with two powerful limitations: There are no plans to sell Fusion as a suite, nor will it in the conceivable future have the broad industry coverage that Oracle's eBusiness Suite offers (or AX, for that matter). There's also the question of when Oracle will actually release Fusion into general availability; the official word is that there's no official word on when, leading to considerable speculation about the company's commitment to what was to be its flagship, post-acquisition binge product.

The impact on Salesforce will be harder to gauge: The on-demand market leader has tremendous momentum as the original go-to company for on-demand CRM, and its pure play strategy will appeal to on-demand purists. But as multimode deployment options gain ground, it will be harder for Salesforce to insist that on-demand is the only way to offer rapid deployment and a means to shift the CRM budget from capex to opex.

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