Microsoft CRM Brings in a Billion, but Trails Salesforce

Gartner Inc. today released details from a report on the customer relationship management software market, showing Microsoft Dynamics CRM in fourth place., SAP and Oracle all led Microsoft, according to the report, "Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012." Salesforce's No. 1 standing is the key finding of the report because the SaaS CRM vendor displaced SAP as the global CRM leader for the first time in 2012. Salesforce took $2.5 billion of the worldwide, all-vendor total of $18 billion in revenues. SAP sits at second place with $2.3 billion. Gartner placed Oracle third with $2 billion.

Microsoft has been at the CRM game for more than a decade, so its fourth-place position is bad news for the company. The good news for Redmond is that Dynamics CRM hit Microsoft's billion-dollar-businesses club in calendar-year 2012. Gartner put Microsoft's CRM revenue at $1.1 billion, up from $900 million in calendar-year 2011.

That's a sizable bump. As of May 2012, Microsoft was only claiming that all of Dynamics, which includes Microsoft's established ERP products as well as CRM, amounted to $1 billion in annual revenues. Meanwhile, one of the few public pieces of data in the past -- an IDC report from 2010 (and admittedly an apples-to-oranges comparison) -- had Dynamics CRM revenues at $214 million.

Microsoft's growth rate, according to Gartner, was 26 percent from 2011 to 2012. That's an impressive pace, no question. It could help Microsoft gain ground on SAP, which saw flat revenues, and Oracle, which increased revenues by just under 8 percent.

But it won't be enough to gain on market leader, which also grew revenues by 26 percent in the same period.

Meanwhile, IBM is nipping at Microsoft's heels in Gartner's estimation. Big Blue's CRM effort leapt 39 percent from 2011 revenues of $465 million to 2012 revenues of $649 million.

That CRM appears to be outperforming ERP within the Dynamics suite for Microsoft fits with overall market dynamics that Gartner analysts are seeing. Joanne Correia, vice president at Gartner, said in a statement that market growth for CRM in 2012 was three times the average for all enterprise software.

Dynamics CRM also appears to be on the right side of another trend documented by the market researchers -- an increasing appetite for SaaS CRM among customers. Gartner says customer interest in SaaS has driven cloud versions to 40 percent of overall CRM revenues in 2012. That's a trend that favors, certainly, but it also validates Microsoft's increasing emphasis on Dynamics CRM Online.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.


  • Microsoft Releases Windows 10 Version 1909

    Microsoft on Tuesday announced the release of Windows 10 version 1909, a new operating system product that's also known as the "Windows 10 November 2019 Update."

  • November Microsoft Security Bundle Addresses 75 Vulnerabilities

    Of that number, 13 vulnerabilities are rated "Critical" to patch, while 62 vulnerabilities are deemed "Important."

  • The Future of Office 365 Pricing

    With a raft of new Office 365 features in the pipeline, Microsoft also seems ready to change the way it bills its subscribers. Will it replicate Azure's pay-per-use model, or will it look like something else entirely?

  • Microsoft Offers 1 Year of Free Windows 7 Extended Security Updates to E5 Licensees

    Microsoft is offering one year of free support under its Extended Security Updates program to Windows 7 users if their organizations have E5 licensing.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.