Microsoft's recent release of Dynamics AX 2009 brought a somewhat-overhauled ERP offering to the midmarket at a time when many midmarket CIOs could be looking to refresh their ERP systems.
According to research firm ChangeWave, a subsidiary of InvestorPlace Media LLC, sales of ERP packages have waned in recent months as midmarket companies slash their software budgets. Still, if you are in the market for an ERP upgrade, now is the time, says Forrester Research Inc. principal analyst R. "Ray" Wang.
Companies whose ERP systems are nearing 10 years old are likely to need new ones. For growth companies, older ERP offerings just don't get it done anymore.
"Your systems are failing you at this moment, and you're probably looking at upgrades," Wang said.
That said, the timing of Microsoft's new ERP system could be quite serendipitous for Redmond.
Targeted at companies with up to 7,500 employees, Wang said a number of Forrester clients have expressed interest in the AX 2009. It is so robust, he said, that even a handful of enterprise-size companies will implement it in subsidiaries and business units.
June 2 marked the official release of Dynamics AX 2009. In a report reviewing the entire Dynamics ERP line, Wang credited Microsoft's business solution division with getting its act together following a rash of key departures and the abandonment of Project Green, an ambitious but ultimately unsuccessful effort to merge its family of business software applications onto a single code base.
But the shifted focus to existing ERP products resulted in a number of significant updates to Dynamics AX 2009.
Kees Hertogh, a director of product management at Microsoft, touts AX 2009's integration with Microsoft SQL
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Server 2005, claiming an ability to compress a database by as much as 60%. Dynamics also runs with Oracle Database 10g.
For the user, Microsoft is continuing to make Dynamics products look like some of its more familiar programs. Dynamics AX 2009 takes its navigational cues from Microsoft Internet Explorer and incorporates the menu strip from Microsoft Office 2007 products.
"We're really blurring the lines between an Office user experience and an ERP user experience," Hertogh said.
Wang said the other major selling point for Dynamics, beside usability, is cost. Generally speaking, businesses working with Cambridge, Mass.-based Forrester have seen cost savings using previous versions of Dynamics, he said. Because AX 2009 was just released, Wang did not know if those savings would continue but guessed they would.
New features Hertogh championed include a "compliance center" meant to simplify compliance management around the globe. Also new is a "role center" of customized dashboards that push data to users based on job title. Wang called this "pretty cool."
If Wang is right about the "upgrade cycle," Microsoft might take on new customers with Dynamics AX 2009, but it won't be for lack of competition. And that doesn't just come from the traditional ERP powerhouses of Oracle and SAP, where the focus is still heavily on enterprise-sized customers.
A Forrester survey of 105 Dynamics users found that 75 of them considered an ERP system from The Sage Group PLC before ultimately deciding on Microsoft. Sixty-three considered Epicor Software Corp., 54 considered Infor Global Solutions Inc., and 49 considered software from CDC Corp.
Let us know what you think about the story; email: Zach Church, News Writer
