Acquisitions Expand Microsoft Dynamics AX's Vertical-Industry Capabilities

Tuesday Microsoft will disclose that it has acquired software technology in process manufacturing, professional service and retail management and is offering those capabilities as part of Dynamics AX, said Crispin Read, general manager of Microsoft Dynamics ERP, in an interview.

Customers today are increasingly looking for vertical-industry solutions, rather than general ERP applications. That means more development work for the 7,000 ISVs and resellers that work with Microsoft's ERP applications, customizing the software and developing capabilities for specific industries on top of those apps.

With the new technology Microsoft is adding to Dynamics AX, channel partners can spend less time and resources developing those functions and concentrate instead on providing value-added services and developing application features for specific customers, Read said.

Dynamics AX is targeted toward larger midmarket customers while Microsoft's Dynamics GP and NAV ERP application suits are sold more to SMB customers.

Microsoft focuses its Dynamics ERP sales on five markets: retail, distribution, manufacturing, professional services and the public sector. Read said Microsoft has been building common functionality across those verticals, such as resource management and accounting, and the recent technology acquisitions take that effort to the next level.

Microsoft acquired process manufacturing software from Fullscope, a Microsoft channel partner in Athens, Ala., and the professional services software from Computer Generated Solutions, a New York-based solution provider. It acquired the retail software from two companies: LS Retail EHF, a Microsoft channel partner in Reykjavik, Iceland, and To-Increase B.V., a Microsoft ISV partner based in The Netherlands.

In all cases Microsoft acquired the intellectual property relating to the software functionality, not the companies themselves, Read said. Terms of the acquisitions weren't disclosed.

These are the kinds of things we need in the core plumbing of the product," said Dan Fine, managing partner of Fine Solutions, a Seattle-based Microsoft partner that sells Dynamics AX to professional services companies. "I think having it all in one spot will make it easier for everyone."

The added capabilities will reduce the need for solution providers like himself to bring additional software vendors into deals to provide needed functionality, a move that can complicate customer relations, Fine said.

The process manufacturing and professional services capabilities are available immediately on the Microsoft Dynamics price list, Microsoft said, while the retail software will be available at a later date.

Microsoft has been recruiting solution providers with a greater focus on vertical industries, Read said, and the increasingly vertical focus of the Dynamics AX software will help it do that. The vendor is also focusing its partner certification efforts around specific "competencies" -- including expertise in vertical industries -- under its revamped Microsoft Partner Network program unveiled at the Worldwide Partner Conference in July.