Microsoft Finally Thinks Small(er) with Dynamics
"You wouldn't know a diamond if you held it in your hand."
-- Steely Dan, "Reelin' In the Years"
Have you ever really gotten into a TV show, or maybe even a movie, and just
had a terrible sense of foreshadowing that the whole plot was about to go down
in flames like the Philadelphia Eagles on Monday Night Football? (Sorry, we
really tried to avoid the sports reference there, but your editor really enjoyed
watching his Dallas Cowboys win that game. Look at it this way -- we've officially
jinxed the Cowboys for the rest of the season. You're welcome.)
Anyway, you know what we're talking about here. It's the moment when your favorite
show jumps the shark -- and we're very sorry for the tired, late '90s reference
there, but if Microsoft can dredge up Jerry Seinfeld, we can get the ol' shark
reference back out. Maybe an actor leaves, or a key writer quits, or -- worst
of all -- a character gets pregnant, meaning a baby is on the way who will
magically be seven years old the next season. It's just a sad, frustrating feeling,
that sense of dreaded inevitability.
Well, that's the feeling a lot of folks have had for Microsoft regarding Dynamics,
Redmond's enterprise software entry. There's just so much potential there, but
Microsoft keeps messing with it -- not seeing, in the eyes of some, the diamond
it holds in its bejeweled, exquisitely manicured hand.
First, Dynamics was going to be about simplicity, ease of use and, most importantly,
cheapness -- if that's even a word. It was going to sweep into the enterprise
resource planning market from the bottom up, giving hope to those mid-sized
companies that trembled in the presence of monster ERP systems from SAP and
Oracle (although, to be fair, both companies do have mid-market offerings of
Then, somebody in Redmond -- keep in mind that the Dynamics leadership keeps
changing -- got the notion that Microsoft could go up market with its ERP
applications, and the big global systems integrators started sniffing around
in territory where previously smaller partners had ruled. Right there, Microsoft
began to approach the shark, as if to jump it; complicating Dynamics and jacking
up its price tag would have killed much of its appeal and alienated its most
potentially fertile market, mid-size businesses.
Well, according to RCP columnist, ERP guru and friend of RCPU Josh Greenbaum,
folks in the Pacific Northwest have apparently come
(back) to their senses and backed away from the shark again. Microsoft is
taking Dynamics back down-market, where Redmond hopes that its massive partner
army will crush the more direct-sales-oriented approaches of SAP and Oracle.
Greenbaum likes the move, and so do we -- especially from the partner perspective.
The global SIs haven't completely disappeared, and goodness knows there was
enough conflict in the Dynamics channel without them. But, with Microsoft mostly
backing off of the Fortune 500 with Dynamics, at least smaller, regionally and
vertically oriented partners will be back on the front lines of selling and
customizing the applications -- and companies will have an attractive, simpler,
lower-cost ERP alternative from a major (maybe the major) software vendor.
In other words, it's back to square one for Dynamics, strategically speaking -- back
to the first season (to continue the TV metaphor) when the concept was unique,
the writing was witty and the characters were engaging. Let's hope it stays
What's your take on Microsoft's Dynamics strategy? Tell us at email@example.com.
Posted by Lee Pender on 09/17/2008 at 1:22 PM