A New Market for Microsoft
Dynamics Marketing marks a formal entry into a market where Microsoft previously had no presence and is now doing so on a broad front. At Convergence, Microsoft demonstrated not only the revamped MRM functionality it inherited from MarketingPilot, along with the "Social Listening" capabilities it acquired from NetBreeze, but also many brand new marketing automation features, primarily around email and social campaigns, with mention of landing page/ web triggers being available in these campaign workflows.
In terms of market share, Microsoft currently lags slightly behind Salesforce.com, SAP and Oracle, but it shares the same strategic aim of adding line-of-business specific functionality to its customer relationship management (CRM) platform. The new Dynamics Marketing follows a functionally similar path to that of the other “Marketing Cloud” offerings from Oracle, Adobe and Salesforce.com, only different in choosing to largely build it itself over their competitors multibillion dollar acquisition sprees.
The Microsoft Dynamics CRM ecosystem has garnered considerably less attention than Salesforce.com’s alternative platform -- in part due to the fact that Microsoft hasn’t made anywhere near as much noise around the buzzword compliant areas of cloud and mobile. In spite of this, the company indicates that it has seen 80 percent year-on-year growth in its Dynamics Online subscriber base, with 90 percent of all new Dynamics customers opting for the cloud. That’s pretty impressive growth, however you look at it.
But it is not this breadth of technological approach that is the most significant thing. That Microsoft sees Dynamics Marketing as suitable for all and scalable for its largest customers is an approach that might be familiar to those who recall its entry into the ECM market in 2001 with SharePoint. Not many people outside of Microsoft would consider SharePoint -- even in 2014 -- in any regard "Best of Breed," yet data suggests that 75 percent of Fortune 500 companies have some SharePoint located somewhere in the organization. Projects often resonate with “can’t we just use SharePoint for this?" given that for many use cases it provides “just enough” to enable a result. Many an existing Marketing Automation sales cycle will now be interrupted with a similar refrain: “We should first look at what Microsoft is doing here.”
Why the Competition Should Pay Attention
Dynamics Marketing’s mere existence is disruptive in and of itself. It provides an opportunity for Microsoft’s extensive direct and indirect sales forces to butt into any digital marketing related conversation in a way that previously could only have been achieved through third party technology partners.
More worrying for its competitors is that for all the current talk of the platform being available as “stand-alone” from Dynamics CRM as a separately licensed product, Microsoft is the king of product bundlers. For example it recently added an OEM for InsideView’s customer intelligence data as a part of the base platform, and it is likely to add other similar fold-in technology features in time too. Dynamics Marketing will be viewed as part of a battle for marketshare, not for top-line revenue (let alone anything on the bottom-line).
That fact alone gives Microsoft a flexibility on pricing that Salesforce.com -- still yet to turn any real profit in its 14 years of existence -- must envy. And an entrant into an uncertain market the size of Microsoft, whose direct interest is not in seeing digital marketing as a profit center, but simply an opportunity for subscriber growth -- that can price bundle accordingly -- is the last thing that many competing vendors needed as they puzzle out this conundrum. Indeed the noisy market for digital marketing suites in general has obscured the fact that in the main, few on the vendor side have yet figured out how to actually generate any real profit -- which brings into question whether marketing automation really has a future as a stand-alone business.
Title image by Konstantin Sutyagin (Shutterstock)