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Microsoft Dynamics Partner Armanino McKenna Extends CRM Practice with Gateway Buy

Looking to boost its customer relationship practice, Armanino McKenna LLP this week said that it has acquired CRM specialist Gateway Solutions Inc. for an undisclosed amount.

The deal is noteworthy because Armanino McKenna is one of the largest Microsoft Dynamics partners on the West Coast of the United States, and it coincides with apparently growing demand for Redmond's CRM offering (see also "Microsoft Revs Its CRM Engine"). The deal also expands the regional coverage of Armanino McKenna, which is based in San Ramon, Calif. Gateway is based in Portland, Ore.

Founded 11 years ago, Gateway started out as a general CRM consultancy and in more recent years narrowed its emphasis to offering CRM solutions from Salesforce.com and Microsoft. Since Microsoft has moved Dynamics CRM to the cloud with its current release, Gateway has focused on that offering, given that it is less expensive than Salesforce.com's combined CRM offering. Also Dynamics integrates better with Microsoft's existing products, Gateway founder Larry Betz said in an interview.

Betz

Larry Betz

"It was tough to sell Salesforce.com at $125 a user when we had a comparable Microsoft CRM offering at $44," said Betz, who will assume the role of managing director of CRM at Armanino McKenna. "We were able to knock down some pretty substantial deals in the northwest and that got us as a priority partner with Microsoft." Gateway and Armanino McKenna are on Microsoft's CRM Partner Advisory Council.

With the growing desire by customers to add CRM to their ERP platforms, Armanino McKenna last year stepped up its CRM practice by hiring specialist Scott Mangelson as its CRM practice leader. "We have seen a continued requirement for unified enterprise application solutions. And that includes both the front office, which is CRM, and the back office, which is ERP," Mangelson said in an interview. But as it became evident that Armanino McKenna needed to scale its CRM practice, Mangleson said he reached out to Betz.

Armanino McKenna is a certified public accountant (CPA) firm, which also offers business and IT consulting services. As a result of its combined services, the firm engages with CFOs when assessing integration of ERP systems as it relates to compliance, forecasting and revenue recognition, Mangleson explained.

Mangleson

Scott Mangelson

"When we sit down with a VP of sales or a VP of marketing, not only do we just tell them about CRM, but we discuss how that CRM impacts the entire business process of their organization and there are some other best practices that they might consider when they're looking at CRM," Mangleson said. "That's a real differentiator for us because now we have brought in Gateway with such strong CRM capabilities, and now we can use that to leverage all the other management and advisory and information technology consulting that we have as a firm."

As for Microsoft's Dynamics CRM offering, both Mangleson and Betz are seeing continued growth thanks to the pricing and new features coming in the Q2 Service Update due next quarter, which will add improved mobile and social networking support, cross-browser compatibility and better integration with SQL Server, which provides the ability to provide better dashboard and reporting services.

Sixty percent of Armanino McKenna's Dynamics CRM sales are now online, up from just 10 percent two years ago, Mangleson said. The 60 percent figure is consistent with what Microsoft is reporting in terms of its overall Dynamics CRM sales to date.

"Microsoft CRM Online is growing over 50 percent a year, so [it's] taking huge market share from the other options," Mangleson said. "It's really coming down, in my opinion, to a two-horse race between Salesforce.com and Microsoft. But while [Microsoft is] smaller, [it's] gaining market share very quickly. The functionality is very much the same."

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About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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