Microsoft Cant Fail in Marketing

Microsoft 'Can't Fail' in Marketing

4 minute read
Dom Nicastro avatar

Microsoft Dynamics Marketing is like a baseball team holding a 7 to 1 lead in the final inning. Throw strikes, worry about the batter only and make the routine plays.

That's all the team in the field needs to do to win the ballgame. And its all that Microsoft has to do to win in marketing when it takes the field this quarter, according to an industry analyst.

"If it carries through on the execution of getting Dynamics Marketing to market, packaging it wisely in bundles with Dynamics CRM and enabling its channel to sell it, it almost cannot fail to succeed," said Matt Mullen, 451 Research's senior analyst with the social business practice.

Simply the Best?

Mullen's claim is not, however, that Microsoft is automatically bound to be better received or better equipped than competitive products in this space, he said.

customer experience, With Planned Execution, Microsoft Can't Fail in Marketing

However, he added, "it will be just present in many organizations, most of which are in that yet-to-be-addressed CRM market. Dynamics Marketing will be the path of least resistance, just as SharePoint was before."

How does Microsoft's play into marketing compare with some other big fish? To position itself, Microsoft acquired MarketingPilot in October 2012. Last year, Oracle bought Responsys, Salesforce acquired ExactTarget and Adobe's big get was Neolane.

Acquisitions Examined

Who "won" in this acquisition battle? Or who will win?

"I think 'winning' isn’t the right way to look at it," Mullen told CMSWire. "The various big spenders of late, Oracle, Salesforce and Adobe, have made bets for differing reasons. With Microsoft, they’ve chosen to go down the route of taking a small acquisition and folding it into a larger, in-house development project, which it announced back in March as ‘Dynamics Marketing.'"

Oracle and Salesforce don't see their 2013 bets necessarily paying off now with direct revenues, Mullen said, but rather to help them protect their ongoing revenues for their respective CRM platforms.

Look at it this way, as Mullen pointed out: their combined spend over the last 18 months on marketing automation vendors is north of where Mullen's organization currently sees the total revenue level of that market come 2018 ($4.73 billion)

Learning Opportunities

"Microsoft is coming at it from a similar angle: giving the Dynamics CRM platform a better line-of-business alignment around marketing," Mullen said. "But it doesn’t face the pressure of Salesforce toward its bottom line, or Oracle toward its Enterprise Applications top line." 

What's Next?

For Microsoft, the big win according to Mullen would be an increase in CRM market share, and, along with it, an increase in uptakefor the online version of the CRM.

"They see digital marketing as a good conduit to that right now," Mullen said, "not forgetting they’re beginning to build out around customer service, too, with the acquisition of Parature earlier this year."

As for selling marketing automation as a standalone, we've seen that happen already. Responsys was modestly profitable prior to the Oracle acquisition, Mullen said. Marketo, too, has gone through a successful IPO, roughly doubled in market cap since that point and passed $80 million in revenue but is still yet to turn that into any sort of a profit.

"If you look at adoption of marketing automation technology and compare it to the CRM install-base, there is plenty of addressable market yet to be hit," Mullen said. "Yet, the real long-term value for the technology is where it forms part of a revenue-generation machine; it is only one part of a larger story."

Microsoft, Oracle, Salesforce and Adobe have a far greater share of that revenue machine, Mullen added, and have all taken their stakes though varying levels of acquisition and some organic development to do just that.

"There’s probably only one or two more big M&A deals out there in the short term," he added, "and that’s when we’ll start to see whether the more recent entrants start to grow into the space that these acquisitions have left for the independent vendors."