Microsoft’s Latest Acquisitions: Who Benefits?

Microsoft recently acquired four vertical solutions that target process manufacturing (Fullscope Inc.), professional services (Computer Generated Solutions Inc.), and retail industries (To-Increase and LS Retail ehf). 

These acquisitions are no different from any other software industry vendor acquisition, as each player in the enterprise resource planning (ERP) space is trying to expand its reach of features and functions in a  variety of vertical industries. 

What’s different here is that Microsoft Dynamics’ aim is to not  only capture the vertical markets, but also to work with  partners to increase Dynamics AX penetration by enhancing current functionality with more micro-level, industry-vertical-specific features and capabilities—without the big additional price tag. 

What caught my attention was the reasoning behind Microsoft’s acquisition of the Retail Chain Manager (RCM) solution from To-Increase, a partner and independent software vendor (ISV) based in the Netherlands. RCM has an extensive base of functionality for point-of-sale, merchandising, advanced supply chain management, and automated inventory control and warehouse processes. 

The current capabilities of RCM will be embedded into the MS Dynamics AX application, and are allowing Microsoft partners to put more emphasis on their specialized vertical industries.

Vertical-specific specialists (such as To-Increase) have extensive experience and specific knowledge that they can bring to bear on the creation of business-relevant applications and best practices. When I interviewed  To-Increase CEO Cornelis Bosch recently, here’s what he had to say:

“This agreement fits well with the To-Increase strategy. Microsoft will focus on the core retail capabilities for Microsoft Dynamics AX, while To-Increase and its partners will continue to focus on vertical-specific solutions, such as fashion retail.”

Retailers with end-to-end business solutions ought to be able to make effective use of such software functionality as category management, supply chain management, point of sales (POS), and merchandising. Industry-specific functionality should help organizations improve their operational efficiency, and obtain clearer insight into business deliverables based on changes in the market and customer behavior. 

Erik Hoiden, To-Increase’s VP of Sales, added this:

“Most retailers have worked with several ERP applications and understand the difference between configuration and customization. Forward-thinking ISVs… must provide solutions that enable retailers to upgrade easily and to adjust their solution to changes in the market without changing code in the application.”

In my opinion, this acquisition is going to benefit all parties involved. As the intellectual property is embedded into Dynamics AX, the retailers currently using or planning to buy the solution will have access to retail-specific functionality and expertise. 

As far as I understand, process manufacturing functionality will be available immediately to customers of AX, but retail functionality will be integrated into the next version within the next six months (but in the meantime is available on the pricelist as RCM). Oh, and an important detail for customers and buyers of Microsoft’s ERP products: these industry-specific functionalities are only applicable to the Dynamics AX product, as Microsoft Dynamics’s main focus is on becoming the leader in the upper mid-market ERP space.
comments powered by Disqus