Business Solutions History

In order to maintain growth, in 2000 Microsoft decided to move up the food chain from the platform (Operating System and Database) to Business Applications for the mid-market. This market with lots of small providers was ripe for consolidation and just as amenable to the software development model of using huge resources to develop superior products to be sold globally in large quantities at lower price. The strategy was also to develop applications that integrated more closely with the Microsoft technology stack and with Office, thus driving adoption of the latest versions of these products.

At that time, Great Plains (formed in 1981) was the global leading supplier of financial management software to the mid-market (5 million to 500 million) corporations. They were a visionary company led by Doug Burgham, who had bet the company on Windows NT by starting development (1993) from scratch of a true 32-bit windows accounting system long before Window NT (subsequently Windows 2000/3) became a success. Also they had optimised their software for Microsoft SQL Server database, again long before the runaway success of this product.

In April 2001 Microsoft acquired Great Plains. They chose to acquire rather than develop, because Great Plains had already established such a lead with their true 32-bit Windows SQL business applications. Great Plains was dominant in the US and strong in English-speaking countries. They had not however established a strong presence in mainland Europe. Microsoft, being a truly global organisation, decided to also acquire Navision, the next most successful, mid-market ERP vendor (who were well established in mainland Europe). This was completed in July 2002.

The Microsoft business division, headed by Doug Burgham, was created from Great Plains and Navision. In addition to this Microsoft developed from scratch a new .Net Dynamics CRM application.

Microsoft has been investing over US$2 billion per annum in the Business Solutions (Dynamics) division over the past few years: a dramatic figure considering this is around 30% of the total R&D budget compared to sales being only 2% of total Microsoft sales. So the R&D intensity for Business Solutions is over 15 times that for mature divisions, such as Windows client. This we believe clearly demonstrates Microsoft's commitment and indicates where future growth is expected.

Future

For future direction of Microsoft with Business Solutions (Dynamics) please refer to the Product Roadmap section of this document.