Sorting out Microsoft's Dynamics CRM revenue

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:



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

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  • I don't get it...

    Where's the substance? All I read was a lot of ifs.
  • Plenty of substance

    CRM revenue is part of overall ERP revenue, which includes Axapta , Great Plains, Navision (or whatever they're calling these things now), etc.
    Since these other products account for a significant part of ERP revenue, CRM might (charitably) be 50% of MS's total ERP revenue, which would put it at $500M a year.
    Now CRM *alone* is generating over $1B? That means it went from $500M to $1B in a year, and assuming that the other ERP products generate revenue too, the total ERP revenue should be much higher.
    Reading between the lines: someone (Gartner or MS) got confused about the numbers and is giving CRM credit for ALL Dynamics revenue, even though it accounts for only a portion of it.
    Al S Cook-4ec56
  • CRM Revenue vs. CRM Market Share

    Beyond all this, revenue is not necessarily the most accurate indicator of actual buyer intent and therefore of ultimate product adoption, as CRM is sometimes folded into a bundle of software offerings from a vendor that has a wide range of offerings.

    Sometimes, companies will "buy CRM" as part of a suite of offerings or as part of a master license agreement -- whether or not they actually end up deploying the CRM component or maintaining the the CRM component, if deployed, for the long haul.'s revenue numbers are probably most reflective of buyer intent, as virtually all of their buyers are explicitly buying only CRM.

    We wanted to get a read of market share based on what people say their companies are actually using for CRM as opposed to what revenue numbers say, so we ran a survey [for the U.S.] -
    Steve Chipman