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Microsoft Says Its New Business Apps Are Smartest in the Land

October 11, 2016, 1:37 PM UTC
Photograph by Getty Images

Last week, Salesforce pitched its sales, marketing, e-commerce, and customer service software as a treasure trove of smarts because of the artificial intelligence it is layering across that portfolio.

This week, it’s Microsoft’s turn to claim the better and smarter mantle with the official launch of Dynamics 365, a previously announced suite of business applications for handling front- and back-office processes. Actually the applications, already announced this summer, were reannounced Tuesday, with availability slated for November 1. Stay tuned for what will likely be another announcement at that time.

Dynamics 365 offers features and functions previously found in a bunch of separate products—including Dynamics CRM and at least three enterprise resource planning (ERP) software applications—in what it says is a new, single code base that also incorporates AI features. Microsoft’s pitch is that while Salesforce is adding AI cobbled together from a set of acquisitions over the past year, Microsoft is “building in” technology that it’s been working with for years, much of which was built in-house. ERP software is used to manage inventory, manufacturing processes, and finances. It’s complicated and critical to how companies operate.

The new Dynamics 365 software runs atop Microsoft Azure cloud. The offering includes functionality that once was found in several product lines including Dynamics AX (for Axapta), Dynamics GP (for Great Plains), Dynamics NAV (for Navision)—all products acquired by Microsoft more than a decade ago—but the service builds mostly on the latest AX code.

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Analyst Joshua Greenbaum, principal with Enterprise Applications Consulting, cautioned against focusing too on much on rhetoric since nearly every software company is making its software smarter—meaning that apps are capable of delivering recommendations or predicting what someone wants to do based on the user’s past actions.

“Both Salesforce and Microsoft are doing the same thing. Whether you’re a customer or a software vendor they are providing a rich palette of tools to offer a customer experience that is like the Amazon recommendation world,” he noted. Ah yes, Amazon (AMZN).

In this context, Amazon is the online retailer that offers a recommendation engine that suggests what consumers might be interested in buying based on what they have already bought (or looked at online) and what like-minded people have bought (or looked at).

Despite all the high-faluting talk about AI, probably the biggest change for Dynamics 365 is pricing. With this iteration, each user pays $70 per month for a wide range of sales, customer service, and field service applications. Salesforce offers separate software “clouds” that offer systems for those processes. It sells low-end bundles starting for less than $70 per user per month, but the most popular version of Salesforce Sales Cloud carries a list price of $150 per user per month. Discounts may apply.

For more: How Linkedin could finally make Microsoft Dynamics a big deal.

What the Dynamics 365 release really shows is that these business applications are finally strategic to Microsoft after years of existing almost an afterthought to the company’s Office and Windows cash cows. That means Microsoft will compete more rigorously with Salesforce, SAP (SAP), Oracle (ORCL) and the other leaders in business applications.

For more on Microsoft LinkedIn deal watch:

Microsoft’s yet-to-close $26 billion acquisition of LinkedIn (LNKD) could also be a huge boon to the company’s ambition of making its customer relationship management and business applications smarter. If you’re a sales person working on a bunch of prospects, imagine having those 4 million or so LinkedIn listings of people’s titles and corporate affiliations at your fingertips. That’s why Salesforce chief executive Marc Benioff has been complaining about the acquisition, and about Microsoft’s “monopoly power.”

Note: This story was updated with a better description of Dynamics 365 and how it relates to Microsoft’s previous product lines and again to reflect that the Salesforce pricing Microsoft refers to is list price and thus does not reflect potential discounts.