In the fifth installment of our series, Guy Weismantel, Microsoft’s Director of ERP Marketing, talks about the changing competitive dynamics for “two-tier” ERP opportunities. Guy explains how SAP and Oracle’s introduction of mid-market offerings has created new opportunities for Microsoft in these large, distributed accounts.
Tune in tomorrow when we ask: “Is the ERP Software Market Rebounding?”
Video Transcription
Don Fornes: So, one of the big opportunities for Microsoft Dynamics ERP has been in these two-tier deployments, where a large corporation will have say Oracle E-Business Suite or SAP at the enterprise level but different plants or business units will have a more traditional mid-market solution. And often that’s Microsoft Dynamics. Now, SAP has made a bunch of moves down-market with Business One, Business All-in-One and now with Business ByDesign. Then Oracle with JD Edwards is a traditional mid-market solution, although at the higher end of the mid-market. How have those moves changed the opportunity for Microsoft Dynamics in two-tier deployments?
Guy Weismantel: They’ve really helped focus the opportunity quite frankly. In a lot of cases, you have these companies, that at the division or subsidiary level have increasing amounts of autonomy to go ahead and make the best IT purchase decision for them and for their business, as long as it connects back in and the kind of the administrative ERP is getting the information it needs to do its statutory reporting for instance.
And with that kind of breaking, where there’s been a realization that one size does not fit all at the headquarters and down at the division level, that has opened the flood gates of companies who have said, “Okay great, let me find something that actually fits my business. I have my own budget here at the division level which is going to be less than you did for the big SAP or Oracle implementation at Headquarters, that means I have less time, that means I have less resources, that means I have less interest in the complexity that comes along with many of those multi-year implementations.” So that’s opened up the opportunity for us. The fact that we have a product and in some cases products that very much fit the business processes of these divisions and subsidiaries, it means that we’re getting a seat on the short list.
The fact that you have things like analyst ratings in Forrester and Gartner, and some of the folks that do the Magic Quadrant and the Waves that rate our products quite highly gives customers a confidence to say, “Okay, I don’t want to just invite Microsoft in because, I have all these other things from Microsoft, so let’s see what Microsoft has,” that does happen, but increasingly it’s because of the functionality that we can provide to them, the costs that we can provide to them and I think most importantly, the time-to-value that we can provide to them.
If you’ve architected something to fit their industry, if you have a partner that has that industry expertise and you lower the cost of implementation and the time to actually flip on the switch, that is something that people at these division levels are really, really interested in.
So, the SAPs and the Oracle are starting to come downstream. We expected that they would. They have a lot of unused software down at the division levels that they want to try to get and that makes sense, but still given the cost and some of the challenges that these large ERP systems have, and even if they renamed it and rebranded it and have put a new front end on it, are still quite cost prohibitive. And so that presents us with an opportunity now, it’s our job to take advantage of it.