Microsoft Dynamics Lines Up Against SAP, Oracle, And SalesforceMicrosoft Dynamics Lines Up Against SAP, Oracle, And Salesforce

SAP has a much broader shot at competing with Dynamics' vision, though its Business ByDesign and forthcoming Sales OnDemand have no on-premises deployment model, nor do any of the on-demand products under development at SAP that I am aware of. The larger Business Suite may someday become available in the cloud, but plans for that haven't been shared publicly. In short, SAP, which I believe has much a more solid cloud strategy than Oracle, won't be supporting the level of deployment choice that Microsoft has in mind.

There are many who think providing the breadth of deployment options that Microsoft has planned isn't all that strategic. A pretty formidable cast of pundits say this level of choice is either unnecessary or heretical or both. Time will tell, but I'm in the camp that believes that customers will prefer the multimode option for many of their deployments if given that option, and Microsoft's plans to offer a supreme breadth of options is the right one for the foreseeable future.

And that choice effectively starts now--or rather later this year with the full release of AX 2012. Microsoft has promised that this version, while not the Azure-ready, dual-mode version that offers multimode deployment out of the box, will be readily upgradeable to the multimode version when it's available, effectively letting customers buy an on-premise ERP system today and have the option to move it to on-demand at the next revision cycle. For the customer who prefers to sit on the fence and keep his or her options open, AX 2012 is looking good.

This in no way wipes Business ByDesign's prospects off the map, nor does it obviate the fact that SAP has a strong product set for the mid-market--All-in-One, Business One for the on-premises customer, and Business ByDesign for the on-demand customer--that competes well against Dynamics. There's still considerable customer choice for SAP's prospects; multimode deployments are possible, though from different code bases. And SAP's willingness to fight aggressively with its direct sales approach against Dynamics' partner-driven model is a distinct advantage that one day Microsoft must do something about other than take the hit and live to fight another day.

The bottom line is that Dynamics has really hit its stride on the technology front and now needs to worry about how to compete in the channel. The problem with using an indirect sales approach against competitors like SAP and Oracle that deploy direct sales forces against Dynamics in the upper mid-market and lower echelons of the large enterprise market will someday have to be addressed head-on, in my opinion. There are already Microsoft teams that call on large accounts, and then bring in partners to close the deal. That may need to change as the capabilities of AX 2012 and beyond make it clear that Microsoft can play a stronger role at the top end of the market. At which point it may need a top-end sales strategy to match its technical prowess. That's the price Microsoft will pay for growing up so well.

Josh Greenbaum is principal of Enterprise Applications Consulting, a Berkeley, Calif., firm that consults with end-user companies and enterprise software vendors large and small. Clients have included Microsoft, Oracle, SAP and other firms that are sometimes analyzed in his columns. Write him at [email protected].