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Dynamics 365 Helps Microsoft Penetrate the Applications Market

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Dynamics 365 is a fast-growing business for Microsoft

Another important business for Microsoft is Dynamics 365, which is an integration of customer relationship management (or CRM), enterprise resource management (or ERP), the Azure IoT platform, and other business productivity applications. The Azure IoT (Internet of Things) platform is a hub used to connect and manage billions of IoT applications.

Dynamics 365 is a cloud-based application tool that Microsoft launched in 2016. The product has seen very healthy growth since its launch, and its revenue rose 51% year-over-year in the last quarter. Microsoft expects revenue of more than $1.25 billion from Dynamics 365 this year. In the last quarter, the company launched Dynamics 365 AI, an AI application that makes sense of data. During its most recent earnings call, Microsoft mentioned that companies Chevron (CVX), ZF Group, and European clothing retailer H&M are already using it.

CRM ERP Market

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Microsoft is looking to become a bigger player in the lucrative CRM and ERP markets

Microsoft has also partnered with Adobe (ADBE) and SAP (SAP) to provide its customers with a one-stop solution with insights related to transactional, operational, financial and behavioral data. By providing an integrated solution, Microsoft enables cost savings for its customers who otherwise have to deal with disparate solutions. By integrating the CRM and ERP applications, Microsoft is eyeing these lucrative markets.

According to Gartner, CRM is the largest of all software markets and overtook the database management systems market by the end of 2017. CRM became a $39.5 billion market in 2017, which is why players such as Oracle (ORCL) and Microsoft are looking to grow their shares in this market.

Similarly, the ERP market was worth $31 billion last year, according to Gartner. Again, this market is dominated by players such as SAP and Oracle, but Microsoft is looking to become another important player in the market with Dynamics 365.

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