Microsoft Inks Six-Year Deal With HP Inc. For Dynamics CRM

Microsoft notched a big win in the CRM wars Monday by confirming it had signed a six-year Dynamics deal with HP Inc., one the software giant said will help HP "transform its sales and partner environment."

HP's adoption of Microsoft's cloud-based CRM will position the vendor squarely in the camp of Microsoft customers, as the Palo Alto, Calif.-based company already uses other Microsoft cloud services including Office 365 and Azure.

A Microsoft blog post said that through the deal HP is moving to a "more integrated sales experience for both HP sales reps and the channel partner community." Neither company provided additional comment on how deploying Dynamics was expected to impact the way HP engages its partners.

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In a prepared statement, HP Chief Operating Officer Jon Flaxman said: ’We have chosen Microsoft Dynamics as our CRM solution for our direct selling, partners and services. This brings us a cloud-based solution that delivers a more effective and efficient collaboration engine across our business.’

Chris Pyle, president of Champion Solutions Group, a partner of both Microsoft and HP based in Boca Raton, Fla., told CRN he doesn't expect HP's selection of a new CRM platform to greatly affect how HP partners bring to market the vendor's solutions.

Pulling the trigger on Dynamics was a decision probably had a lot to do with HP "running Windows on their laptops," Pyle said.

Microsoft, Redmond, Wash., declined to comment on whether the HP deal went through its own channel or was closed direct.

The deal comes roughly three months after Microsoft unveiled plans to acquire LinkedIn, a move hailed by Dynamics resellers for its potential to bolster Microsoft's customer-facing product portfolio. Around the same time, Microsoft introduced a new version of Dynamics, called Dynamics 365, combining the CRM and ERP components into one integrated offering.

Hewlett Packard, before its split in two, was known to be a large Salesforce customer, and the tech giant used a partner portal called Unison tightly integrated with the Salesforce platform.

Reed M. Wiedower, chief technology officer at New Signature, a Microsoft partner based in Washington, D.C., said there are probably a couple of reasons HP opted for Dynamics.

Deploying Microsoft's CRM, which will likely be the Dynamics 365 version by the time of the rollout, ensures the best integration with Office 365 and extends into ancillary products such as PowerBI as well, New Signature's Wiedower said.

"We’ve seen large enterprises frequently desire a level of integration capabilities out-of-the-box without the need for lengthy implementation projects," Wiedower told CRN. "By having a single vendor in place, it makes that process much easier."

In addition, Microsoft is making a clear investment in its Dynamics business.

"The launch of Dynamics 365 is just the beginning of this process and every statement [Microsoft CEO] Satya Nadella makes about how critical it is to Microsoft’s future growth gives customers confidence that Dynamics is the future of the organization," Wiedower told CRN.

It was only a few years ago that many industry observers thought it likely Microsoft would spin out Dynamics into a separate business, Wiedower said.

But Microsoft has clearly "mainstreamed" Dynamics of late, and customer concern has subsided, allowing improvements in Microsoft's core product suites to help drive higher sales targets.

"We’ve seen it in the Microsoft field and partner organizations," Wiedower said. "Those without Dynamics practices are scrambling to hire folks or internally gain skill sets to be able to cover the rapidly increasing customer desire."

Another factor is the existence of an established base of organizations that have shifted from on-premises Exchange and SharePoint implementations to Office 365, and typically discovered within the first year that they enjoyed a superior experience in the cloud, he said.

"Microsoft's success in the cloud productivity space has helped larger organizations recognize that if Dynamics, as a platform, is today at the same point where Office 365 was a year or two ago, that it makes sense to get on to it as soon as possible and to stop spending time and money keeping disparate, legacy sales, marketing and customer service systems running," Wiedower said.