Microsoft Dynamics is a sophisticated business software suite that helps businesses track customer information, sales pipelines, and

allocate resources efficiently based on internal processes. Under the Dynamics business suite, Microsoft mainly sells Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) software. Dynamics is part of Microsofts broader Microsoft Office productivity business which we estimate constitutes about 30% of Microsofts stock. Microsoft Dynamics competes with software products from SAP (NYSE:SAP), Oracle (NASDAQ:ORCL), Infor and Sage. Microsoft has recently gained share in the CRM market, but has lost share in the ERP market. Its CRM market share increased from less than 3% in 2006 to around 7% in 2009, while its ERP market share declined from more than 4% in 2006 to less than 3% in 2009. However, Dynamics revenues associated with Microsofts CRM market share increase has more than offset ERP revenue decline for Microsoft, and resulted in a net increase of revenues from $0.92 billion in 2006 to $1.25 billion in 2009 for the Microsoft Dynamics segment.

Two Reasons for Growing Dyanmics Revenues

Below we explain the reasons why Microsofts gains in CRM market will offset losses in the ERP market, resulting in increased Microsoft Dynamics revenues. 1. Increased SaaS offerings will help Microsoft gain CRM market share Microsoft has benefited from an increase in its CRM On-demand or SaaS offerings. SaaS CRM market segment has seen faster growth of around 30% in the past few years. We expect the SaaS CRM market will continue to gain higher adoption, and will grow at a faster rate than the traditional on-premise CRM market. 2. Competitive pressures will lead to ERP market share loss We expect Microsoft to lose further share in the ERP segment because of the competitive pressures from smaller players like Infor and Sage and bigger players like Oracle. Although Microsoft has lost share in the ERP market, it has benefited from an increase in Global ERP market. Overall, its revenues from ERP segment declined from $740 in 2006 to $570 in 2009, while its revenues from CRM segment increased from $180 million in 2006 to $680 million in 2009.

Microsoft Dynamics Revenues Expected to Surpass $2 billion by 2016

We believe Microsoft will continue to increase its CRM software revenues by increasing its share in the ever increasing CRM market. We also expect it to more than offset any revenue loss experienced from ERP software sales.

MARKET SIZE

They group ERP vendors into 3 : Tier I, Tier II and Tier III as you can see in a table below:

Sample Vendors Tier I SAP Oracle Oracle eBusiness Suite Oracle JD Edwards Oracle Peoplesoft Misrosoft Dynamics Tier II Epicor Sage Infor IFS QAD Lawson CDC Software Tier III ABAS Activant Solutions Inc. Bowen and Groves Compiere Exact NetSuite Visibility CGS Hansa World Consona Syspro

Small companies which usually have less than 30 users and less demanding needs prefer using Tier III software. Mid-size companies (with less than 100 users) that have outgrown Tier III packages often become Tier II clients. They usually have just a few localized sites and prefer short-term investments. Tier I software is targeted for large enterprise company. Here is the ERP market share at 2009 between Tier II and top 3 Tier I vendors.

According to the chart above, SAP is still top leader with 31% market share. However, in 2005-2006, based on AMR Research, SAP market share was 47%, Oracle 25% and Microsoft was only 3%. Microsofts market share increase from 3% to 15% while SAPs market share decrease from 47% to 31%.

GROW RATE(GLOBAL AND DYNAMIC)

PLAYERS STRENGTH AND WEAKNESS

Compare Oracle with Microsoft Dynamics
Three reasons to switch from Oracle to Microsoft Dynamics
Making the decision to change your company's business management system is a process that requires research and foresight. Here are three top reasons why businesses using Oracle applications, including PeopleSoft, JD Edwards, and E-Business Suite solutions, have decided to make the switch to Microsoft Dynamics.

Microsoft Dynamics can scale with your business. Microsoft Dynamics provides affordable scalability for your growing businesses. With benchmarked performance up to 1,000 users and beyond and rich functionality across financials, supply chain management, and customer relationship management, you can be confident in the ability of Microsoft Dynamics to meet the needs of your growing business. Integrate your Microsoft Dynamics business management solution with Microsoft SQL Server and enjoy enterprise-level reporting, flexible decision-making support, and timely, relevant business insight at a low cost with significantly high usability and flexibility. Microsoft Dynamics provides a low cost of ownership. Microsoft Dynamics is engineered to costeffectively support the changing requirements that are frequently necessary for customers to adapt, grow, and maintain a competitive edge in their business. Independent research has demonstrated that, on the whole, Microsoft Dynamics offers a higher return on investment (ROI) and lower overall costs than other major competitive offerings. Microsoft Dynamics licensing is designed to be cost-effective. It is based on concurrent users versus named users and has no imposed user minimum or maximum, so it evolves with you for the life of your business. Microsoft offers an industry-leading vertical partner ecosystem. Microsoft is in a position to deliver vertical solutions to hundreds of different industries on a local basis; it can bring these solutions to market on a local level. Microsoft's Certified for Microsoft Dynamics programme offers solutions designed to meet the needs of specific industries. It can provide customers with the benefits of a rich portfolio of tested, reference supported solutions developed by ISVs that have met Microsofts highest solution and organisational certification standards.

Products

QuickBooks Peachtree MAS 90/200 NetSuite

QuickBooks

Replacing QuickBooks Brochure 10 Signs You've Outgrown QuickBooks QuickBooks has standard accounting functions, but Microsoft Dynamics GP, offers the ability to remain on one product for the entire lifecycle of your company. Microsoft Dynamics GP grows with your business and is designed to have your company up and running quickly, without a huge hit to your companys budget.

Twice the built-in functionality than QuickBooks Enterprise Advanced reporting and decision-making tools that integrate with Microsoft Office Run multiple departments and companies Maintains years of history allowing you to make more accurate forecasts. Advanced inventory management to keep your customers happy. Financial visibility across your entire organization through the structured chart of accounts. Personalized home pages allow your employees to work with the information and tasks most relevant to their jobs. Microsoft Dynamics GP offers rich functionality for financials, and supply chain management, along with real-time access to integrated information from all areas of your business.

Peachtree

Has Your Business Outgrown Peachtree? Reasons to Switch from Peachtree Replacing Peachtree Brochure Peachtree is another accounting package designed for smaller businesses with a limited set of features and standard database functionality. Its a good starting place, but as your company grows, limitations affect the progress of your business. Four signs your business has outgrown Peachtree:

Your companys transaction volumes are increasing and straining the capacity of the Peachtree database resulting in performance problems due to the time consuming task of navigating across different menus and screens and print reports.

Your company is growing and you need for more than five users to access the accounting system at the same time.

Your companys operations are becoming more complicated and you need a system that offers advanced functionality. You have to compile data from several different applications because Peachtree does not off the range of financial, supply chain, and even HR functionality that your company needs. Microsoft Dynamics GP offers rich functionality for financials, and supply chain management, along with real-time access to integrated information from all areas of your business.

MAS 90/200

Outgrowing Sage MAS 90/200 Although Sage Group has a large install base of small businesses they have undergone significant changes that leave many users uncertain of the products future. Some limitations include:

MAS 90 has limited scalability especially for more than 10 users Very limited multicurrency, multi-national functionality Proprietary technology can make integration difficult Weakness in workflow control, security and compliance Microsoft Dynamics GP offers rich functionality for financials, and supply chain management, along with real-time access to integrated information from all areas of your business.

NetSuite

SMB Suite vs. NetSuite Microsoft Dynamics GP vs. NetSuite Key Reasons Microsoft Dynamics GP May Be a Better Fit for your Business NetSuite offers a web-based solution for midsize businesses that integrates Accounting/ERP, CRM, and collaboration tools, but there are several areas where NetSuite falls short compared to SMB Suite:

The upfront cost of NetSuites software does not include the services component. Service thresholds and per-module pricing escalate the overall cost. NetSuite's usability, add on costs, deployment, customer support and features limitations can rise potential customer concerns. NetSuites interface lacks the guided, step-by-step nurturing found in SMB Suite, which could increase initial training time. NetSuites contract management, telephony integration, and comprehensive workflow are very weak compared to the SMB Suite. NetSuites CRM solution has a fairly easy to use marketing campaign function as does SMB CRM, but NetSuites progress metrics lack luster and detail. NetSuite stores their customers data in only one data center which is located in a seismic area, and has no back up facility. Limited extensibility: few ISV (Independent Software Vendor) applications available

Missing many functional capabilities, such as extended HR (e.g. recruiting and performance management), materials management, supply chain, etc. NetSuites local accounting support limited to the U.K. and USA.