Sorting out Microsoft's Dynamics CRM revenue

Microsoft's CRM revenue appears to be growing at a 26 percent clip for a 2012 grand total of $1.13 billion according to Gartner, but the numbers may not be what they appear.

Ray Wang, principal of Constellation Research, noted in a blog post that Microsoft's CRM figures may not pass the sniff test. Here's the chart in question from a Gartner press release:

The issue? A year ago, Microsoft said Dynamics via Redmond Magazine, including ERP and CRM, had about $1 billion in revenue. Now Microsoft's CRM business has offset any decline in ERP and then some.

Wang said Gartner's stats, if correct, raise the following issues:

• For Microsoft to show Gartner's CRM growth the Dynamics ERP business had to slow with CRM blowing out sales. Wang noted:

Even if Microsoft’s Dynamics ERP acquisitions performed in the single digit growth range, $750M in ERP revenue added to $1.135.2B in CRM revenue would have the Microsoft Dynamics business near $2B. Did Microsoft Dynamics really generate under $2B in overall revenue for 2012? If this was true, I doubt the Microsoft Business Solutions team would want to hide this major accomplishment.

• Microsoft's body language and reports from the field indicate that the company's ERP business hasn't stumbled so bad that CRM would look that much better.
• Previous assumptions about Microsoft's CRM revenue could be off.

In any case, it's unlikely that Microsoft has $2 billion in Dynamics revenue, which would be needed to justify Gartner's CRM figures for the software giant.