Sorting out Microsoft's Dynamics CRM revenue

Summary:Do Gartner's CRM growth figures for Microsoft's CRM revenue hold up? Probably not.

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:

gartnercrmdata

 

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.

Topics: Enterprise Software, Microsoft

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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