Microsoft let down some of its smaller partners in North America during the rebranding of its business applications, according to Doug Burgum, senior vice president of Microsoft Business Solutions.
“We inflicted some partner pain,” Burgum said. “We effectively went dark on advertising sub-brands.” He was speaking during a question-and-answer session with financial analysts Monday at Microsoft’s Convergence business software user conference in Dallas, which was also Webcast.
Unlike rivals Oracle and SAP, Microsoft sells its business applications through partners.
Microsoft’s smaller partners had been very strongly focused around individual applications, such as Microsoft’s ERP, product lines, according to Burgum. Those partners got left behind in September when the company grouped its business software under the Dynamics brand.
Burgum said the issue was limited to North America where all four Microsoft ERP product lines jostled for attention, compared to other parts of the world where only one Microsoft ERP product line played. As of Monday, Microsoft embarked on a major advertising campaign in 11 countries around the Dynamics brand that Burgum hopes will remedy the situation. By Microsoft’s Worldwide Partner Conference in Boston in mid-July, he hopes the company’s partners will “feel better,” he said.
Microsoft expects its business applications partners to differentiate themselves by concentrating on vertical markets. Craig Bruya, CFO of Microsoft Business Solutions, also on the Webcast, gave the example of an unnamed Microsoft partner that has focused exclusively on meeting the needs of lettuce growers looking to replace AS/400 J.D. Edwards ERP implementations.
Bruya pointed to a recent milestone for Microsoft, the first profitable quarter for its business applications division. “It won’t be our last although there may not be two in row,” he said.
Limiting factors on growth include the nature of the ERP business, according to Bruya. “The biggest reason companies don’t change their ERP systems is that whatever they have isn’t bad enough yet,” he said. “If the thing you have isn’t crushing your business, you have a lot of inertia saying don’t do anything.”
Microsoft is making a number of investments aimed at growing its business applications business, Bruya said. For example, it is spending money on localizing its Dynamics software into languages such as Chinese, Japanese and Korean, as well as on providing more technical support to its partners.
