InspireSmart Microsoft Dynamics Nav - Navision

 Microsoft Acquires Navision, Expands Global CRM Presence By Erika Morphy

May 7, 2002 11:00AM

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The driving factor behind the Microsoft acquisition of Navision is expanding market share in Europe. ‘Navision has an incredible partner channel in Europe,’ Microsoft general manager of global CRM David Thacher told CRMDaily. ‘They can provide us with an excellent foundation to bring our CRM product into this market.’

 Ending industry speculation about a pending deal, Microsoft announced it will acquire Navision, a Danish software vendor, in what is the Redmond, Washington-based conglomerate’s second largest acquisition.

Assuming final regulatory approval is granted. the deal — valued at US$1.3 billion — is expected to extend Microsoft’s market share throughout Europe.

The rationale behind the acquisition has been to enlarge the markets of two companies that offered complementary products, but were very different in terms of geographic reach, David Thacher, general manager of global CRM for Microsoft, told CRMDaily.com.

Navision includes CRM products and tools as part of its business applications. For its part, Microsoft is set to release a small and mid-market CRM application later this year.

Staying on Top

Once the acquisition is complete, Navision will become part of Microsoft’s Business Solutions division.

Navision’s corporate headquarters in Vedbaek, Denmark, will become the center of development and operations for Microsoft in Europe, the Middle East and Africa — the largest product development center Microsoft has outside the United States, the company said.

This deal is Microsoft’s second largest, topping even the purchase of Great Plains. Microsoft’s biggest purchase was Visio, a software graphics company.

European Footprint

The driving factor behind the acquisition is expanding market share in Europe.

“Navision has an incredible partner channel in Europe,” Thacher said. “They can provide us with an excellent foundation to bring our CRM product into this market.”

Currently, Microsoft derives 80 percent of its business applications revenue from the United States, he said. By contrast, Navision gets 86 percent of its applications revenue from Europe.

“I would characterize the Navision move as a smart strategic move for Microsoft,” Pivotal CEO Bo Manning told CRMDaily. For all practical purposes, Navision is the ‘Great Plains’ of Europe. Its bread and butter are tens of thousands of small businesses that primarily use their accounting software.”

Through the CRM Door

The acquisition will, no doubt, further increase rampant industry speculation about the size and shape of the CRM market, once Microsoft enters with its application.

In February, the company announced it would be releasing a CRM application, its first since acquiring Great Plains. It is also the first Microsoft application built on .NET.

Many have wondered if Microsoft has been positioning itself to dominate the CRM market place. Corporate executives have countered that the company’s focus is firmly fixed on the small and mid-size market.

That CRM market has hardly been penetrated, Thacher said.

“Existing solutions haven’t been scaled properly and do not have many channels to offer support. This will be a fun market for us to ride,” he added.

Other industry watchers second this view of Microsoft’s CRM game plan. “They have been clear about their strategic intent from the beginning,” Manning said.

According to Thacher, development for Microsoft’s CRM application is on track. “We rolled out several phases of alphas, and at the end of the month we are rolling out betas and training.”

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