Microsoft Dynamics ERP Edging Ahead In The Downturn, Study Says

In the current economic downturn, the market share of Tier II smaller ERP providers has risen significantly while those of ERP heavyweights SAP and Oracle have dropped proportionately and Microsoft Dynamics edged slightly ahead.

According to a 2010 survey by vendor-neutral ERP consultants Panorama Consulting Group, the market share of Tier II ERP vendors grew from 23% to 30% last year while ERP leader SAP dropped from 35% to 31% and Oracle from 28% to 25%. Microsoft Dynamics held its own, growing slightly from 14% to 15% during the same period. Panorama's 2008 survey was based on 1,300 respondents worldwide from 2005 to 2008 while the 2010 survey was tallied from 1,600 participants last year.

Panorama President Eric Kimberling said the market changes reflect that small- and medium-sized companies have been moving ahead with ERP implementations in the downturn while larger firms have been holding back on upgrades and modifications.

"Microsoft is a better fit and more appealing in a downturn," Kimberling said. "It has a much lower cost and is very predictable (in implementation)."

Even though the rise in Dynamics' market share is slight, it is still significant in light of the declines for SAP and Oracle, he added.

The 2010 survey also ranked Microsoft Dynamics No. 2 behind SAP on ERP vendor short lists by prospective buyers and seventh of the top 10 in selection.

In its 2008 report, the Denver, Co.-based consulting firm pointed out that the cost savings for Microsoft Dynamics is great, with an SAP implementation averaging $16.8 million in total costs compared to $12.6 million for Oracle, $2.6 million for Microsoft Dynamics and $3.5 million for Tier II applications.

In that detailed study, Panorama concluded that Dynamics was gaining in popularity because of its markedly lower pricetag; Dynamics was favored by users, who like ...