RCP Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.

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 at 11:58 AM


comments powered by Disqus