Microsoft’s ERP and CRM Re-Org: What Will the Impact Be?

Microsoft announced their annual re-org last week that included a repositioning of Microsoft Dynamics business unit within the organization. The previous Microsoft Dynamics leader, Kirill Tatarinov, will be departing the organization – part of both changing how products are managed and a continued move to the newer business models. I don’t think anyone in the Dynamics community expects this change to have any material impact on what we do.

As a Dynamics partner – the promise of One Microsoft has been our mantra and holy grail for a good while – all of the Microsoft solution stack fully leveraged to deliver optimum benefits for the ERP user community. This was held back by the old Balmer product models – where every group was out for their own success first regardless of the overall solution. The rumors and the stories about Satya Nadella – the new CEO – are all about impediments to internal cooperation and coordination being removed. All of the organization and product changes are moving in the right direction.

I ran across Mary Jo Foley’s insightful analysis on TechNet today, titled “How Microsoft’s latest reorg will affect Dynamics CRM and ERP.” As usual, Foley does a great job of pulling all of the details together, and it is easy to agree with her.

For example, she identifies this question regarding the re-org: “Why is Dynamics moving to Cloud and Enterprise (C+E), rather than the Applications and Services Group (ASG)?” And, she offers the “official response” from Microsoft:

“Moving Dynamics to the Cloud and Enterprise team enables Microsoft to accelerate its ERP and CRM work even further and mainstream those efforts as part of its core engineering and innovation efforts. C+E will work closely with ASG to ensure the end-to-end experience is cohesive across communications, collaboration and business processes.”

For folks not steeped in Microsoft organizations – the Cloud and Enterprise group includes Azure (cloud platforms) and cloud products (like O365 and PowerBI) – while the ASG group builds Microsoft Office. Both of these groups are key to the fully developed final solution.

She closes her article with this thought: “It’s not a stretch to see how Dynamics CRM and ERP fit into CEO’s software and services-focused Microsoft. But it will be interesting to watch how Microsoft balances its newfound love for partnering with CRM and ERP rivals (hello, Salesforce) with its stepped-up focus on its own enterprise applications business.”

My educated (after years of being a Microsoft Partner) guess is this is a nod to the partner community for Microsoft products. Most of us are unsettled by change – and what the new Microsoft leadership is doing is driving the needed change to make them a bigger and better player in the cloud and in ERP. The fact that most other cloud ERP or CRM companies want to partner with Microsoft for O365 integration (Office Online) and PowerBI integration (online analytics) just shows me the potential and the power of the full stack. Maybe in Silicon Valley we are more accustomed to the relentless pace of change and the power of competing and partnering with the same companies.

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