Microsoft Among HCM Top 500

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Microsoft Strengths, Domain Expertise, and Key Differentiators

Microsoft has extended its lead in the Cloud apps market by aggressively migrating its existing customers and signing new ones to its array of Cloud applications from Office 365 to Dynamics 365. Dynamics products and cloud services have witnessed a more than 10-point jump in revenue growth in recent quarters buoyed by resellers and partners that succeeded in migrating legacy Dynamics AX/GP/NAV customers to Dynamics 365. In the Infrastructure As A Service space, Microsoft has been smart enough to adapt by playing to its strengths among developers, despite its stumbles in the mobile phone market. Now the No. 2 player, Microsoft Azure has continued to deliver robust results. Over the past five quarters, Azure and other cloud services have logged at least 45% quarterly growth. One key driver has been winning contracts from large enterprises that plan to migrate their SAP workloads onto Azure for better Cloud accessibility as they adopt a hybrid cloud strategy.

By wresting control of the all-important Cloud applications market from Salesforce, Microsoft shows no signs of slowing down. Microsoft acquired Ally.io, a software service that helps companies measure their progress against OKRs (objectives and key results), a common way that management measures both individual and company progress. Microsoft also acquired Clear Software, a provider of iPaaS and business process solutions with strong connectivity into SAP and Oracle. Clear Software’s API access and system knowledge will strengthen Microsoft Power Platform’s integration with outside systems and accelerate how customers leverage data and processes that reside beyond Microsoft first-party services.

In October 2018, Microsoft’s LinkedIn acquired Glint for employee engagement applications. The deal, which reportedly was worth more than $400 million, underscores Microsoft’s desire to further grow its presence in the HCM applications market. That was followed by its $7.5 billion purchase of Github, another major source of strength for Microsoft to cement ties with Cloud applications developers. Github, an online coding, learning and collaboration community with 28 million developers, is now part of Microsoft Cloud + AI operations.

The increased momentum is a vindication for Satya Nadella, who headed Microsoft’s Cloud and Enterprise group before becoming its chief executive officer in 2014. Since then, Nadella has successfully steered its transformation from one steeped in the Windows environment to everything revolving around the Cloud. Shortly after Nadella was named to be the third CEO in Microsoft’s history, he rallied the troops by committing to invest more than $10 billion in Azure data centers. The Azure Cloud infrastructure now spans 60 regions and 140 countries, or 72% of the countries recognized by the United Nations. In October 2019, Microsoft won the US Defense Department to become its Cloud infrastructure provider in a deal worth as much as $10 billion over the next 10 years. One significant aspect to the contract is that when different US military branches are migrating their legacy office applications to the Cloud, Microsoft stands to reap tremendous benefit.

Microsoft Recent Developments

For the third year in a row, Microsoft surpassed Salesforce to become the No. 1 Cloud applications vendor. After buying LinkedIn in 2016 for $26 billion to increase its Cloud applications recurring revenues and leapfrogging Salesforce, Microsoft is in the process of acquiring Nuance for $16 billion. The proposed deal will add about $100 million in Cloud subscription revenues, enriching its collaboration product portfolio with natural language processing and interactive voice response applications from Nuance. Today, Nuance banks on its Cloud hosting business to help hospitals and physicians incorporate voice recognition apps for transcription and IVR, a potential bonanza for Microsoft in the post pandemic era as telemedicine becomes mainstream. Meanwhile, Microsoft has extended its lead in the Cloud apps market by aggressively migrating its existing customers and signing new ones to its array of Cloud applications from Office 365 to Dynamics 365, aided by growing use of LinkedIn among recruiters and marketers for its HCM and CRM capabilities. The all-encompassing packaging of Microsoft has also helped the vendor expand into the Cloud collaboration apps market with over 145 million daily active users running Teams now bundled into Microsoft 365 apps.

Microsoft Mergers and acquisitions (M&A) Activities

Microsoft is in the process of acquiring Nuance for $16 billion. The proposed deal will add about $100 million in Cloud subscription revenues, enriching its collaboration product portfolio with natural language processing and interactive voice response applications from Nuance. In October 2021, Microsoft acquired Ally.io to improve employee experience and engagement for its burgeoning HCM applications led by Viva, an extension of Microsoft 365 to boost enterprise collaboration that became generally available in November 2021. Microsoft also acquired Clipchamp for video editing in September 2021.

Microsoft Customers in ARTW Customer Database

Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying Microsoft applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Microsoft and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Microsoft Dynamics 365, Microsoft Dynamics AX, Microsoft Dynamics CRM Online, Microsoft Dynamics NAV, Microsoft Dynamics SL, Office 365, Linkedin customers.

Microsoft Key Cloud and HCM Applications

Microsoft Dynamics 365, Microsoft Dynamics AX, Microsoft Dynamics CRM Online, Microsoft Dynamics NAV, Microsoft Dynamics SL, Office 365, Linkedin

Microsoft HCM and Cloud HCM Applications Revenues, $M:

Type/Year20202021YoY Growth, %
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* HCM Applications Revenues = License + Support & Maintenance + SaaS ( Hardware and Prof. Services are Excluded )
** All revenue figures are estimates based on public records, Cloud and Non-Cloud business models in Apps Run The World's vendor database, and annual survey results including vendor feedback.

Microsoft Revenue Breakdown by Type:

TypeLicenseProf. ServicesHardwareSupport & MaintenanceSaaSPaaSIaaSOther (Non Enterprise Application Revenues)Total
% of Total Revenues Subscribe Subscribe Subscribe Subscribe Subscribe Subscribe Subscribe Subscribe 100%
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Microsoft Total and HCM Applications Revenues by Region:

Region% of Total Revenues2021 Total Revenues, $M2021 HCM Applications Revenues, $M
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APAC Subscribe Subscribe Subscribe
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Microsoft Direct vs Indirect sales

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Microsoft Customers - Breakdown by Geo, Size, Vertical and Product

List of Verified Microsoft Customers


No. of Microsoft Customers: 250000

No. of Microsoft HCM Applications Customers: 250000

No. of Microsoft Cloud HCM Customers: 20000

No. of Microsoft Cloud HCM Subscribers: 120 million


Microsoft Dynamics 365 Finance, Supply Chain Management and Commerce has 4500 customers, while Microsoft Dynamics AX - 24000 customers, Microsoft Dynamics NAV - 124000 customers, Microsoft Dynamics SL - 13000 customers, Microsoft Dynamics GP has 51000 customers.

Office 365 Commercial revenues continued to post high double-digit growth, with Office 365 consumer subscribers increasing to 34.8 million, up from 31.4 million a year ago. In addition, more than 90 million monthly actively devices are running Office, suggesting that the productivity suite is making significant inroads into the mobile world.

A growing number of large organizations such as City of Chicago, San Diego County Regional Airport Authority and Toyota have adopted Office 365. Microsoft also said more than one million workers were running Office 365 in federal, state and local government agencies. Microsoft Teams service has more than 13 million daily active users, and 19 million active users on weekly basis.

Microsoft Market Opportunities, M&A and Geo Expansions

The pandemic has bode well for Microsoft Cloud business as it capitalizes on the massive amounts of digital transformation and Cloud migration projects undertaken by companies big and small. In recent quarters, Microsoft has tried to tamp down the expectations by suggesting the law of big numbers as well as contract variability especially among Azure accounts. Still, Microsoft's biggest opportunity remains increasing its wallet share among its installed base of millions of Office, Windows and other knowledge workers now finding it increasingly difficult or simply impossible to leave the wall garden of Microsoft Cloud. Another battleground lies in the HCM market where Microsoft is beginning to flex its muscle with Viva, a souped-up Office 365 with heavy emphasis on employee collaboration and engagement. The acquisition of Ally.io for employee experience may well be the precursor for Microsoft to expand further by building out best-of-breed HCM apps.

Microsoft has managed to drive more Cloud applications revenues by successfully converting many of its on-premise customers to its Cloud releases of Office 365, and Dynamics 365. That was further compounded by the continuous growth of LinkedIn, which led a number of HCM market segments including Sourcing, Recruiting, Candidate Relationship Management, as well as the overall Talent Acquisition category. With the $26-billion purchase of LinkedIn, its largest in its history, Microsoft now owns more than a quarter of the talent acquisition market, which topped nearly $7 billion in 2018.

Microsoft’s outlook looks favorable. If one simply compares the fiscal year revenues of Microsoft and Salesforce, the delta between the two widens, resulting in a 23% advantage for the former. That does not even take into account the Cloud Applications revenues from its Office 365 Consumer product, which derives revenues from small businesses as well as individuals. In October 2019, Microsoft announced that Office 365 Commercial now has more than 200 million monthly active users and Office 365 Consumer has 36 million, compared with 155 million and 33 million a year ago, respectively. In 2016, Microsoft had 85 million subscribers for Office 365 Commercial and 24 million subscribers for Office 365 Consumer.

In 2020, Microsoft released Dynamics 365 Commerce—built on the proven Dynamics 365 Retail capabilities—delivers a comprehensive omnichannel solution that unifies back-office, in-store, call center, and e-commerce experiences to provide a delightful shopping journey for consumers across the different touchpoints. Dynamics 365 Commerce enables customers to deliver better business outcomes.

Microsoft Risks and Challenges

Although Microsoft has done exceptionally well in both Cloud apps and infrastructure markets, the next five years will be marked by its ability to navigate the ISV and partner crosscurrents that now pervade in every market segment. Microsoft is adamant about its commitment to the channel, but how it executes the customer lifecycle will be the key. Whereas Microsoft partners would bring the business to the Microsoft platform in the past, recent licensing changes now enabling Teams users to have free access to Dynamics 365 data underscore Microsoft's desire to exert account control, prioritizing Teams over Dynamics because of the strategic importance of Teams in competing with Zoom, G Suite and others in the Collaboration apps market. The question is whether Microsoft is willing to continue to add value to Teams by making it even more competitive against Zoom and G Suite, perhaps devaluating Microsoft Dynamics 365 in the process.

The conundrum for Microsoft is not to treat its Cloud applications business distinct and separate from its Azure infrastructure, which requires support from other parts of Microsoft as much as it gets from third-party vendors like Salesforce and Oracle. For Microsoft, growing its Cloud applications business and Azure in tandem will inevitably bruise some egos along the way.

The rivalry between Microsoft and Salesforce in the Cloud applications market will intensify given their trajectory with both wanting to make people more productive, whether they are knowledge workers or customers. The remaining question is whether Microsoft needs Salesforce more or the other way around as the former aims to loosen the stranglehold of Amazon and Google in Cloud infrastructure and search, respectively.

Microsoft Ecosystem, Partners, Resellers and SI

Microsoft primarily works with its ecosystem of 640,000 Microsoft Partner Network partners including many involved in its Office apps and business tools like SQL Server. Microsoft Dynamics software offerings are licensed to enterprises through a global network of resellers, managed service providers and ISV partners that develop and market vertical solutions and specialized services.

Few years ago, Microsoft announced it is doubling its investment in free software, cloud services, and platforms for partners over the next year, giving partners the tools needed to build innovative solutions on top of Microsoft technologies. The number of Microsoft partners has remained fairly static given the sluggish sales of Windows through the OEM channel, while the Nokia purchase and its eventual spinoff yielded little benefits for its ecosystem or its partners.

Currently there are 10,000 Microsoft Dynamics partners including 2000 CRM VARs (value added resellers), 100 ISV (independent software vendor) partners and hundreds of hosting partners in 85 countries. Microsoft Dynamics 365 is supported in Southeast Asia by a network of global consultants and system integrators including Avanade, HP Enterprise Services, Hitachi, Logica, Ciber, Infosys and HCL.

Microsoft Cloud Platform (PaaS) and Infrastructure (IaaS) Details

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Research Methodology

Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.


Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).


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