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Microsoft Acquires Midmarket ERP Products

The software giant wants to pick up divisional business from large companies standardized on Oracle or SAP ERP.
Gartner calls it more scalable than NAV (Navision), GP (Great Plains), or SL (Solomon), the other Dynamics offerings that also came through acquisitions and are primarily sold to small companies and the lower end of the midmarket.

In the past few years Microsoft has gotten more aggressive about working with partners to develop industry-specific software to run on AX, and Gartner counted more than 300 partner-provided products for AX. Yet with the software product acquisitions, Microsoft clearly wants a more refined strategy on how to bring those vertical offerings to market.

For example, companies classified as manufacturers can be quite diverse, from food companies to equipment makers, Hertogh noted. Microsoft's plan is to offer a key product that can be used by all manufacturers, and then let smaller partners build add-ons specific to the food or equipment industry.

By gaining better control over the vertical strategy, Microsoft can better position those products for global rollouts (partner products tend to have only a local or national reach, Gartner noted in its report). Another problem, Gartner noted, has been partners' tendency to overly modify Dynamics AX, which has made upgrades difficult.

"Microsoft Dynamics AX's business functionality and industry strategy relies almost completely on partners," wrote the Gartner analysts authoring the report, and that's clearly something Microsoft is looking to change.


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