Project Green Makes Way for a Titan and Duet is Really a Threesome

Posted on March 13, 2007
Filed Under Uncategorized |

Microsoft’s move into enterprise software was viewed as an unavoidable eventuality by SAP, but while it was convenient to use Microsoft as a cause to stimulate a sense of urgency, the fact is that the Microsoft threat was always viewed as a manageable one.

As this piece in eWeek reveals, given the maturity of these products it is less about the process of creating the applications and more about dealing with the complications that customers on many versions of the products, and partners who have built literally thousands of add-on products.

Munkhold Elsberg said that the decision to scale back on the single code base plans outlined in Project Green (later renamed Dynamics) was an evolutionary one. By one estimate there are 1,500 NAV products alone built by partners—99 percent of them are localized geographically, and verticalized—and some 5,000 partner applications all tolled. By moving to one product, Microsoft’s Dynamics partners who have built their offerings around a single product line lose out.

The fact remains that Microsoft spent $7 billion acquiring and then attempting to rewrite these products which have a collective customer base more or less unmotivated to go throught the expense and hassle of upgrading. This should be the lesson for anyone considering making a major move on the M part of SMB. The two strategies most likely to succeed for these markets:

  1. Start from scratch and give yourself a decade. This is what Salesforce.com did and now they have about 35,000 buying entities and about 620,000 users in one app category. (This is just back of the envelope math, please correct me if these numbers are wrong.)
  2. Acquire large slow movers and slash-and-burn your cost structure. The customers won’t be going anywhere regardless of how poorly you support them and the expectation of major upgrades, i.e. investment, is very low. Sage took 5 years to upgrade Peachtree and they still have a huge customer base.

However, as Dennis Howlett points out, there is a lot of coherence in this product line:

“What’s the upside? Putting Office at the centre of its client side access strategy and confirming continued development of the main product lines is good business”

At any rate, SAP’s strategy was to play the Office group against Microsoft Business Solutions using Duet. If Microsoft was generating a good return from Duet there would be intense pressure within Microsoft to steer clear of SAP with Dynamic Snaps. Microsoft is also fighting a two front war in the CRM space and having significant difficulties getting a product out that is marketplace competitive.

The problem is that MBS seems to have learned a lot from their counterpart’s strategy and is now copying it. How better to create a competitive activity than with a parallel action designed to be disruptive as opposed to displacing.

And then there is Oracle… feeling a little neglected this week would be my assessment. I wonder if Wookey stuck out his tongue and made a silly face during this interview.

“Duet? We did all that five years ago,”

I am also interested to see how Microsoft Titan plays out, even if the release did get pushed back, as it does look like the table stakes for the online CRM game just went up.

Titan, which will probably be officially known as Dynamics CRM 4.0 will be the first Microsoft CRM release based on a multitenant architecture and using a single code base to support three types of usage — on-premise, hosted by partners or Microsoft. The Microsoft-hosted offering will be called Dynamics Live CRM, the third member of the vendor’s growing Live “

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