Microsoft Dynamics AX6 - SAP-Killer?

(C) Microsoft Dynamics

(C) SAP

The Microsoft Dynamics AX Technical Conference 2011 is here, and many are touting it to be the best release of Dynamics to date, which is actually quite an accurate analysis. “The Microsoft Dynamics AX team has been hard at work developing the most sophisticated, innovative release to date.” (Microsoft Dynamics AX Technical Conference 2011 webpage)  – I have been a very, very small part of that team and it has given me the opportunity to experience the features of AX6 first hand. But the question is – even though AX6 is far superior to previous versions of Dynamics AX, is it the “SAP-Killer” that some people refer to it as?

TOMA
I will not go into the Functional and/or technical side by side comparison of what makes SAP or AX6 better. AX6 with its innovative and exciting new features is maybe better than SAP, in fact I’ll stick my neck out and say that AX6 is way better than SAP – any flavor of SAP. Having said that, try mentioning ERP to your average business professional, CTO, CEO, Director of IT, software engineer, banker, engineer, doctor etc. and ask them what product comes to their mind, 8 times out of 10, SAP will be the answer, 1 will probably say Oracle and the doctor will say “what’s ERP?”. This is Top of the mind awareness (TOMA) test, a fairly simple concept, Marketing 101. It also makes selling the underdog brand all the more difficult. Except for the CTO, Director of IT, the others are not your typical ERP customers; however, your customers will come from within these groups, their decisions might also be influenced by these groups. This makes selling AX6 harder than SAP. You have to create awareness amongst your potential customers first.

Microsoft Dynamics AX6 – the SAP-Killer?
To me, saying that AX6 is a SAP-Killer is like saying that one of the models of Toyota is a BMW-Killer. No matter how good a Toyota Corolla, Corona, Crown, Mark X is, it can never compete with a BMW, in the minds of the potential customers that is. BMW has built the perception of the “ultimate driving machine” over the years – it has been there for almost a 100 years, a head start definitely counts. SAP is nearly 40 years old, which when converted to IT years is probably more than 100. In IT, it has been observed that once a brand occupies the top spot in the customers’ mind, it is very nearly impossible to replace it with another brand – Windows, Google, Office, iPhone, Facebook, Twitter are all evidence of this.
Does that mean that AX6 is forever doomed to a place of obscurity in the customers’ mind?

Lexus
Not really. Toyota could never take on BMW, but Lexus did. It will come as no shock to anyone when I state that Lexus is actually Toyota – they created a whole new brand to take on luxury cars and their strategy has been quite successful. BMW is the “Ultimate Driving Machine”, but Lexus in its “Pursuit of Perfection” have given BMW a run for its money. Numerous studies have been conducted on how Toyota/Lexus did it. There are other examples of underdog brands replacing the top brand with brilliant marketing strategies.

Can Microsoft achieve this with Dynamics AX6 and replace SAP as the top ERP? Maybe a re-branding of Dynamics AX6 with less focus on the name “Dynamics” is in order. Among other things, the marketing strategy will have to be something special, the effort herculean. Microsoft certainly has the tools, the resources and the people to do this. Current market shares show SAP as holding 31% of the market, Oracle 25% and Dynamics 15%. Considering that 5 years back, SAP was 47% and Dynamics 3%, this is quite an achievement. The trends favor Dynamics. With the launch of AX6 on the horizon, and a host of established Microsoft products (Windows, SQL Server, Office, SharePoint, .NET, Azure) supporting it, AX6 is well poised to go for Gold.