How Important is the Dynamics Business for Microsoft, Anyway?

This article is adapted from the annual WPC 2011 Business Report by Dynamics consultancy TerDege.

When it comes to actually delivering measurable business value to customers around Microsoft Dynamics and its integration with traditional products, Microsoft is doing a better and better job of realizing its own potential. The Dynamics products clearly play a crucial role in this strategy, but Dynamics turnover currently accounts for no more than around 4% of Microsoft's total sales. Microsoft views its investments in Dynamics as being long-term. Or, as Doug Burgum, former Vice President MBS once put it so aptly: "For Microsoft, ERP and CRM are marathons, not sprints."

Nevertheless, some doubt still had crept into the partner channel recently. Was the Dynamics unit growing quickly enough? Was the profit contribution, indeed, as expected? The increasing pressure on budgets, the cancellation of Convergence EMEA in the fall of 2011 and the downsizing of the Dynamics teams in various countries were all things that reinforced those doubts. So WPC 2011 was therefore eagerly awaited. Well, the Dynamics partner channel enjoyed a particularly pleasant WPC! This began on the first day when Steve Ballmer discussed the Dynamics situation extensively. On the second day, Kirill Tatarinov, VP of Microsoft Dynamics, made his debut in a keynote presentation to the plenary sessions. Last year he was only a "value keynote" speaker, i.e. a lower level. And Michael Park and Doug Kennedy came with good news and powerful messages, too.

In his keynote, Ballmer looked back with satisfaction at exactly 10 years of business applications at Microsoft. In 2001, Microsoft made its entry into the ERP world with the acquisition of Great Plains. Ballmer said he was pleased with the growth that ...