Dynamics 365 – A SMB Silver Bullet?

When it comes to Business Applications, like CRM and ERP, Microsoft has but a handful of competitors in the Enterprise space. The competitive landscape in the SMB space, on the other hand, is the Wild West.

The SWOT Analysis

A SWOT analysis is a study undertaken by an organization to identify its internal Strengths and Weaknesses, as well as its external Opportunities and Threats. I have no doubt, the Dynamics 365 team does this analysis on a continuous basis. A key component of this analysis is comparison to your competition. After all, a strength is only a strength, because it is a weakness in others. At the Enterprise level, with a handful of competitors, it is pretty easy to put everybody on a spreadsheet and compare attributes line-by-line. But what if there are a hundred competitors?

Back to the Wild West

The more complex the challenge, the fewer the people who will attempt to solve it. Clearly, Enterprise business challenges are complex. While far from simple, SMB’s challenges are orders of magnitude less complex than Enterprise. Enter the opportunistic entrepreneur. Probably one of the best known examples is Quickbooks. Quickbooks does not even come up in the enterprise ERP conversation as an option, but it dominates in SMB. While QuickBooks has an “Enterprise” labeled version, it is clearly targeting the Midisized in SMB.

On the CRM side, there have historically been a few players; Act, Goldmine, Commence, etc., but recently this space has exploded. There are probably more than a hundred SMB focused, generic CRM options out there today… all SaaS… all cheap. How will Microsoft fit?

Namely Name

There is no denying it, Microsoft is a very strong brand. Like any strong brand, it has its detractors, you can’t have been around that long, and engaged with so many people, without ruffling some feathers along the way. Still, in 2016 it is #3 on the Forbes list of most valuable brands. That provides a lot of fire-power and is clearly their biggest asset in the SMB space when compared to the hundreds of no-names out there.

Microsoft’s Foothold

I doubt that there are any SMBs out there who are not already engaged with some Microsoft products. Office 365 is vacuuming up SMBs, and passed Google quite a while back, to become the number one productivity solution for SMB. There is still a lot of runway left for Office 365 in SMB too. So even if Microsoft focused its Dynamics 365 Business Edition efforts solely on SMBs who already have, or soon will have, Office 365, that is a huge market.

Microsoft has already started this… “approaching existing customers first” plan, with Business Edition Financials, by suggesting to GP customers that it might be a good alternative. While this is good and will probably have some effect, it is also cannibalizing existing revenue. Granted it is not the kind of revenue that Microsoft wants today, but it is still existing revenue. Where Microsoft needs to make hay, is with competing solutions; NetSuite, QuickBooks, Insightly, et al. Their existing foothold is what they can, and will, leverage to do exactly that.

The Better Together Story

In addition to being the title of a Jack Johnson song, “Better Together” will be getting a lot more traction in the Microsoft Go-to-Market plans for Dynamics 365 Business Edition. If I were a competing SMB provider, I would be nervous about Microsoft’s apparent recent discovery of the SMB customer; the customer that has been more than right under their nose, but is actually already up their nose with other products. (Ah, see… I took that metaphor one step too far, but I am too lazy to think of another one).

The groundwork for the Better Together story, has been ongoing with Microsoft’s integration efforts across the stack for a while now. Yes, I know, I often call these “shiny objects”. But most of these will each have a place with different customers. While having an App on my phone that would raise and lower my car antennae is indeed an “Integration”, thankfully, even those Microsoft integrations that I consider shiny objects, are not that frivolous. Okay… maybe a couple.

What Works… and for Who?

While Microsoft is not going to sneer at you for taking existing CRM or ERP on-premise customers to one or more of their cloud alternatives, those folks were coming eventually anyway. What will endear you to Microsoft, is taking that Salesforce customer, and moving them over, or winning that NetSuite compete opportunity. These are the “top of the pyramid” opportunities. Most partners however, will probably start with the base of the Pyramid, moving current users to cloud versions. This is, after all, the lowest of the low hanging fruit.

As a “Born in the Cloud” partner, we don’t have the luxury of moving a bunch of our existing on-premise customers to the cloud, we never had any of those. Sure we inherited a few along the way, but there is no there, there. We will have to focus on the higher branches, “steals and competes”. You can bet, the biggest tool in our arsenal will be the “better together” story. It is unassailable, and it transcends price… to a point. Now we just have to wade through the features to find those that actually support that story, rather than distract from it.

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