Microsoft Dynamics’ Answerable Questions

After I wrote the previous post lambasting Microsoft Dynamics for not being forthcoming with hard data about how its business is doing, I began a mind-numbing series of meetings with various members of the Dynamics team. Towards the end of the day the issue of how much Dynamics contributes to the larger Microsoft revenue picture was brought up by Mike Ehrenberg, who holds the distinguished, and well-earned, title of distinguished engineer at Microsoft. While Mike wasn’t able to be specific about dollars and percentages, he gave me some excellent color to why Dynamics is increasingly important to Microsoft.

The first and perhaps most salient point is that, now that the Dynamics portfolio is deeply integrated to the rest of the Microsoft stack, a Dynamics sale invariably pulls along SQL Server, Sharepoint, Office, Workflow, and, of course Vista. Even more to the point, these products are often licensed at the premium, enterprise level, meaning of course greater revenue for Microsoft than the standard user editions (and greater functionality for the customer, bien entendu.)

Another value-add by Dynamics comes from the additive effect of a greenfield win by the Dynamics team. In these cases, the sale of a Dynamics ERP product  can bring the full Microsoft stack into a company that was probably using Windows and some Office, but wasn’t using SQL, Sharepoint, and the like. Again, in many cases these are premium licenses that tend to make the rest of Microsoft pretty happy that they bought those Great Plains, Navision, and Axapta guys back a few years ago.

A final point is that more and more new products and services, from Azure to a pending process modeling environment demoed this week at Convergence, are being built with solid input and influence from the Dynamics team. Considering this is where much of the enterprise knowledge resides in Microsoft, particularly with respect to the business processes that define what process modeling needs to be able to do and what Azure needs to be able to support,  Dynamics’ contributions make tremendous sense.

So, while real hard data is hard to find, the point that Dynamics is increasingly valuable to Microsoft has been made. And it’s an important point. Only two years ago many inside and outside Microsoft were wondering what Dynamics was doing as a part of Microsoft, despite (or perhaps because of) the enormous investment Microsoft had made in buying its way into the enterprise software market. This increasingly important role for Dynamics should be a reassurance to customers and partners, and a warning to competitors, that Dynamics is leveraging the biggest partner a software company could have, and getting recognition for how much that partner is leveraging Dynamics as well.

Now if I could only get them to give me some revenue numbers……