Bekker's Blog

Blog archive

Microsoft CRM Is Now a Billion-Dollar Business

Detailed estimates of Microsoft's CRM market share don't pop up every day. Usually it requires imaginative tea-leaf reading to figure out how the Dynamics CRM business, which is so important to a lot of Microsoft partners, is doing compared to rivals.

Which is why a new report from market researchers at Gartner is a welcome bit of data. Gartner today released excerpts from its "Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012" report.

Where Microsoft stands is in fourth place, trailing Salesforce.com, SAP and Oracle. Salesforce's No. 1 standing, actually, is the main headline of the report, since 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 places Oracle third with $2 billion.

That's the bad news for Microsoft, which has been at the CRM game for more than a decade. The good news for Redmond and its partners is that CRM officially joined Microsoft's billion-dollar-businesses club in calendar 2012. Gartner puts Microsoft's CRM revenues at $1.1 billion, up from $900 million in calendar 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 Salesforce.com, 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 Salesforce.com, certainly, but it also validates Microsoft's increasing emphasis on Dynamics CRM Online.

Posted by Scott Bekker on April 29, 2013


Featured

  • Microsoft Offers Support Extensions for Exchange 2016 and 2019

    Microsoft has introduced a paid Extended Security Update (ESU) program for on-premises Exchange Server 2016 and 2019, offering a crucial safety cushion as both versions near their Oct. 14, 2025 end-of-support date.

  • An image of planes flying around a globe

    2025 Microsoft Conference Calendar: For Partners, IT Pros and Developers

    Here's your guide to all the IT training sessions, partner meet-ups and annual Microsoft conferences you won't want to miss.

  • Notebook

    Microsoft Centers AI, Security and Partner Dogfooding at MCAPS

    Microsoft's second annual MCAPS for Partners event took place Tuesday, delivering a volley of updates and directives for its partners for fiscal 2026.

  • Microsoft Layoffs: AI Is the Obvious Elephant in the Room

    As Microsoft doubles down on an $80 billion bet on AI this fiscal year, its workforce reductions are drawing scrutiny over whether AI's ascent is quietly reshaping its human capital strategy, even as official messaging avoids drawing a direct line.