Microsoft reorganization leaves Dynamics in a sweet spot

Analysts: The Dynamics business application family has emerged as a conduit to push Microsoft's other technologies into enterprises

Microsoft's sweeping company reorganization may have some insiders feeling jittery about the future, but it's doubtful that the vendor's Dynamics business applications division or its customers need to worry.

While Microsoft CEO Steve Ballmer didn't expound on Dynamics at length in a memo about the changes released Thursday, what he did say was telling.

Ballmer's plan calls for "one Microsoft" focused on "shared goals," with engineering divided into four categories: operating systems, applications, cloud and devices.

However, "we will keep Dynamics separate as it continues to need special focus and represents significant opportunity," Ballmer added.

Ballmer also maintained Kirill Tatarinov, executive vice president of Microsoft Business Solutions, as head of the Dynamics business.

The only significant structural change for Dynamics will involve "dotted line," or secondary reporting relationships between Tatarinov's team and higher-level executives. Specifically, Dynamics product executives will also report to Qi Lu, head of applications and services engineering; its marketing head will report to Tami Reller, who now leads marketing for Microsoft; and its sales chief will report into chief operating officer Kevin Turner's group.

"I don't think the dotted-line relationships imply any lack of confidence in [Tatarinov]," said analyst Frank Scavo, managing partner of IT consulting firm Strativa. If there had been, the reorganization would have been a natural time to make a leadership change, he said.

If anything, the reporting change will only help Dynamics better align itself with the broad strategy Ballmer is trying to execute, said analyst Michael Krigsman of consulting firm Asuret.

While there have been rumors of Microsoft selling off the Dynamics unit because it wasn't a large enough business, with Thursday's announcement "it's clear the business apps market remains important to Microsoft," Krigsman said.

And that's not just because of the potential for growth in Dynamics product sales alone, according to Scavo.

When it comes to products such as Windows Server, Office or Microsoft Exchange, "those deals are all basically inside the IT organization," Scavo added. "The salesman is lucky if he talks to the CIO let alone the CEO."

It's only with Dynamics' ERP (enterprise resource planning) and CRM (customer relationship management) software that Microsoft can "get into more strategic conversations with the customer," particularly with chief financial officers, chief marketing officers and CEOs, Scavo said.

Microsoft's stated goal, even before Ballmer's reorganization plan, was to bring Microsoft technologies such as Yammer and Skype together with Dynamics.

To this end, expect Microsoft to also use Dynamics as a "rallying point" for selling a wide range of its technologies to customers, from Office and SharePoint to Windows Azure said analyst Ray Wang, CEO of Constellation Research.

Krigsman echoed the idea. "Dynamics will be a conduit for all four engineering areas into the enterprise," he said. "From that point of view, it's a very smart strategy."

Moving forward, Dynamics could also play a key role in growing the vendor's ecosystem, having emerged as "a test bed to show how partners can better leverage the rest of Microsoft's portfolio," Scavo said. However, the onus is on Microsoft to do a good job of this, he added. "If Microsoft can't do it, how can they expect ISVs to?"

Ultimately, if these predictions play out, Dynamics customers may be subjected to more sales calls, but also see Microsoft end up increasing the amount of research and development money devoted to the Dynamics product lines.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags enterprise resource planningMicrosoftbusiness issuessoftwareapplicationsCustomer Relationship Managementrestructuring

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?