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On Microsoft’s Jan. 24 earnings call, Microsoft CEO Satya Nadella said his company’s Dynamics 365 business apps are “gaining share.” It’s growing much faster than Microsoft.
For the quarter ended December 31, Microsoft said Dynamics 365 revenue increased 21%. Microsoft doesn’t disclose Dynamics 365 revenue, but hinted a few quarters ago that the annual run rate exceeded $2 billion. Dynamics 365’s 2022 calendar revenue is estimated at approximately $3.4 billion.
Nadella said by phone:
However, when comparing the growth rates across the major providers of enterprise apps, Dynamics 365’s 21% growth rate is not much compared to the growth rates of its two major competitors.
- Oracle SaaS Revenue increased 40% to $2.8 billion in the quarter ended November 30.
- SAP SaaS Revenue increased 31% to $2.33 billion in the quarter ended December 31 (slide 6/33).When
- Microsoft Dynamics 365 Revenue increased 21% in the quarter ended December 31 (amount not disclosed).
So perhaps Nadella was referring to other app vendors. It could be Workday competing with Dynamics 365 for finances, or Salesforce competing with Dynamics 365 for service and customer experience. Let’s take a look at that set of comparison results.
- Workday subscription Revenue increased 22.3% to $1.43 billion for the quarter ended October 31.
- Salesforce app Revenues were up about 15% in the quarter ended October 31 to about $5.5 billion (slide 7).When
- Microsoft Dynamics 365 (As noted above) revenue increased 21% in the quarter ended December 31 (an undisclosed amount).
Looking at these numbers, there’s no question that Dynamics 365 grew significantly faster at the end of the year than the comparable Salesforce app. So perhaps Nadella’s “getting his share” comment was directed at Marc Benioff’s company.
Nadella also builds end-to-end processes, visibility, and data flows to deliver point solutions that are less appealing to business executives striving to meet the demands of digital business here. It could also have been a reference to a small software vendor that accelerated economy.
final thoughts
Achieving 21% growth for a multi-billion dollar business like Dynamics 365 is never a bad thing. But if Microsoft and Nadella prominently claim that Dynamics 365 is “gaining share,” I would argue that cloud his vendors (at least for now) are a little more transparent and We intend to provide reliability.
Because one thing is certain. They are far behind the major players Oracle, SAP and possibly Workday.
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