Microsoft spends big on vertical ERP software

Microsoft has acquired the software IP of North American manufacturing software specialist Fullscope and professional services ISV Computer Generated Solutions, as well as retail ISV partners LS Retail from Iceland and Columbus IT Partner from Denmark.

The IP from all four of the acquisitions will be baked into one of Microsoft's ERP (enterprise resource planning) suites, Dynamics AX.

Dynamics AX is essentially the Axapta product, which Microsoft acquired from Danish vendor Damgaard in 2002.

Brian Holder, sales director of Microsoft Dynamics in Australia, said the acquisitions have been in the planning for some months, but were announced together to paint a clear picture of Microsoft's ERP strategy.

Software products from the four ISV partners were already on the Microsoft price list, he said, and will remain so.

The difference is that now Microsoft "takes ownership of the IP as it stands and we create a roadmap to develop incremental functionality over time."

The major advantage for customers, he said, is a "heightened degree of certainty over future development of these products."

Holder said the Dynamics AX suite - and indeed some of the acquired technologies - are commonly used in Australia.

Devendra Ladva, national accounting manager at P&N Beverages Australia said the company uses Dynamics AX and the Fullscope process manufacturing solution in its business today.

"We've found running the system is easy and users like the familiar Microsoft interface which means they can be up-and-running quickly, while minimising our training costs," Ladva said.

Still room for vertical partners

Holder insists that the acquisitions were made with channel partners in mind. Microsoft sells 100 percent of its Dynamics software through the IT sales channel.

Holder said Microsoft will bake the acquired IP into its 'industry platform', but allow customers to tackle the "very specific and niche vertical expertise customers are looking for."

The retail solutions, for example, will be baked into the Microsoft Dynamics AX platform, but partners might deliver a product lifecycle management module on top specifically for the fashion trade, for example.

The only difference sales partners will notice, Holder said, is that certain "industry components are written into the product" rather than being "provided as apps on top of it."

"It will be so powerful and flexible - by sitting within the product, that software is immediately available to other projects in the Microsoft stack," he said.

Holder said no other ISV partners that have written applications around manufacturing, retail and professional services should find themselves off the Microsoft price list as a result of the acquisitions.

"Everything else that exists now will still be on the pricelist," he said.