Microsoft vs. Salesforce – There is a new leader
A new leader has been named for 2017
In the Microsoft vs Salesforce war, there is a new leader. I have been in the Microsoft Dynamics CRM/365 space for over 14 years. Ever since I can remember Salesforce led most analysts’ reports on CRM/Sales Force Automation. There are a few key reasons why:
- Salesforce.com was launched in 1999, Microsoft released Dynamics CRM in 2003. This allowed Salesforce.com to build market share and product maturity which Microsoft has struggled with ever since.
- Early versions of Microsoft CRM were clunky, difficult to use and lacked key functionality. The user interface was challenging in versions 1.2, 3, 4 and 2011, it was finally overhauled in version 2013.
- Salesforce built Force.com, a platform as a service that allows developers to develop add-on applications that integrate with Salesforce.com. In 2013 Force.com had 1.4 million registered developers and a full library of add-on solutions. Microsoft has struggled to compete with Force.com.
- Salesforce launched AppExchange in 2005 which is an application marketplace for 3rd-party applications that run on the Force.com platform. AppExchange has over 3000 applications and has had over 2.8 million installations of apps.
- Market Share – Salesforce.com has been the clear leader in market share (somewhere around 45% vs Microsoft’s 10% (Source: 2016 CRM Market Share report by CRMsearch).
About a year ago I mistakenly ended up sitting in the private analyst seating area at a very large Microsoft conference. I heard some talk about “leap frogging” and had a conversation with two industry analysts. They predicted that Microsoft would leapfrog Salesforce.com within a year. They felt that the pace of innovation on the Dynamics 365 platform and Microsoft’s faster machine learning and artificial intelligence go-to-market would propel them to the lead spot. They were spot on as Forrester names Microsoft the leader in Sales Force Automation (July 2017).
First let’s cover why Forrester awarded Microsoft the top spot then we will cover a much more “street-level” view of why Microsoft is propelling in the market.
Forrester gave Microsoft Dynamics 365 the highest score in “current offering” combines with the highest possible score in “product vision”. Forrester notes in their report “Microsoft is building out its intelligent offerings and unifying its SFA solution with its larger portfolio”. They go on to mention that the transition to Dynamics 365 (from Dynamics CRM) in 2016 brought a heightened focus on seller productivity and deep integrations into Office 365 and Outlook. Forrester also noted that Microsoft has delivered very strong analytics capabilities, machine learning and artificial intelligence offerings.
Let’s now look at it from more of a “street- level”. Many times analysts look at the market from an Enterprise perspective. What’s important to very large organizations can be markedly different from the SMB perspective. In Forrester’s case they hit the bullseye citing innovation that is applicable to both Enterprise and SMB.
The CRM space has changed significantly over the years. When I began offering CRM related products and solutions it was all about sales force automation, having a sales based system for managing prospect/customer information and tracking activity. Around 1995 CRM became the buzzword. In the late 1990’s Mobile & Software as a Service (Cloud) was popular then came social selling. The current trend and focus is on machine learning (ML) and artificial intelligence (AI). To take that one step further the future is smart business applications and leveraging ML and AI to increase user productivity and efficiency. Until the last few years there was still a large element of management reporting in CRM initiatives. Sales people used CRM in a lot of cases because they had to not because it was necessarily helping them do their jobs better. This is changing as CRM becomes a valuable tool for users to gain actionable and automated intelligence making salespeople more successful every day.
Let’s look at a few key real-world use cases that illustrate this change in purpose for CRM technology:
- Leveraging data – With the change in marketing effectiveness from “outbound marketing” to “inbound marketing” there is a need to improve the use of data (see our video on inbound marketing vs outbound) For example rather than sending mailers or cold-calling a list (outbound marketing) companies are finding much more success in social selling (LinkedIn, blogs etc.). We have also found a lot of success harvesting data from visits to company websites (See our video How to turn website visitors into customers)
- Help Sales by providing actionable intelligence – With Machine Learning built into Dynamics 365 we are able to analyze large amounts of data and learn from it. For example, we can take several years of sales history from a customer’s accounting/ERP system and analyze it – learning things like seasonality, sales history by industry/customer segment, average spend etc. With this intelligence we can drive actionable activity to the sales team to pursue opportunity that would likely otherwise not have been discovered.
- Social – This is not a new trend but the gamechanger is Microsoft’s acquisition of LinkedIn. Imagine what Microsoft can do by marrying Dynamics 365 and LinkedIn, endless possibilities. Imagine being alerted when a key prospect posts on LinkedIn and being able to reach out to them from within Dynamics 365.
- In-Depth Built-in Functionality – I wrote a separate blog titled The days of expensive, complex CRM implementations are coming to an end In that article I point out the correlation between the increase of built-in functionality and the reduction in cost to implement Dynamics 365.
- Integrated Systems – The average small business uses 11 or more software systems making it very challenging to manage end-to-end business processes, analyze data and perform effective marketing. Dynamics 365 is integrated with Office 365. It offers a Financials app and for larger businesses a full ERP system and enables other systems to be seamlessly integrated reducing the amount of disconnected systems.
In the Microsoft vs. Salesforce competition Microsoft is winning on several fronts – artificial intelligence, machine learning, driving behavior to users and social with the integration of LinkedIn.
Want to see for yourself why Microsoft has taken the lead? Schedule a FREE demonstration of Dynamics 365.