For most enterprise applications, Microsoft has typically targeted the mid-market rather than the large-enterprise segment. Exhibit A for this playbook is the CRM space, where Redmond's Dynamics CRM caters to medium-sized enterprises. But notions of "CRM" have expanded, and Microsoft's chief competitors here have also built or (more commonly) acquired MarTech solutions as well.

Microsoft has not been idle here.  Historically, the Dynamics portfolio also consisted of Dynamics Marketing for marketing automation. As Microsoft aggressively "cloudifies" its solution portfolio though, we're witnessing some major changes happening to the product line. Our brand new evaluations stream on CRM describes this in greater detail, but in the meantime it's important to understand what's going with the marketing automation module.

What's going on with Dynamics Marketing?

Let's recount the key details:

• Dynamics Marketing was released in 2014, after a lengthy refactoring of the Marketing Pilot product, which was acquired in 2012
• As of Q4 2016, Microsoft stopped selling new licenses for Dynamics Marketing. Existing licensees will be supported for 3 years until 2020
• As part of Microsoft's new cloud strategy, all products of Dynamics CRM, including Marketing, are getting major updates
• Dynamics CRM is now rebranded as Dynamics 365 and comes in two versions - the enterprise edition and the business edition
• Not surprisingly, Dynamics 365 checks off the latest buzzwords: Artificial Intelligence, Chat Bots, and more. Integrations with the acquired LinkedIn have also started appearing in the various component products of Dynamics 365
• In the enterprise edition, customers looking for serious marketing automation functionality now get pointed to Adobe Marketing Cloud (as result of a quid-pro-quo partnership between Microsoft and Adobe); For the business edition (targeted at small-to-medium businesses), Microsoft is readying a new Marketing product

What are the implications for you the customer?

Let's consider the pros first.

• Microsoft is paying off a lot of accumulated technical debt: Dynamics CRM was a collection of acquired products such as Marketing Pilot, Parature, NetBreeze, and more
• So, you will see more contemporary applications now — cloud-first, with uniform user interfaces, responsive design, and decent mobile apps
• The partnership play with Adobe can be reassuring to large enterprises who are interested in the CRM / Customer Support products but are not enthused by the marketing automation capabilities of Dynamic Marketing; Microsoft does not have a meaty Campaign & Lead Management / WCM offering, (though Adobe AEM is a complex story in itself)

Microsoft can anchor the CRM portion of your MarTech mall, but what about the rest? (click to enlarge)

What of the cons?

• The whole reshaping of Dynamics CRM as Dynamics 365 has many moving parts and is a massive effort, bringing the usual missteps, slipped deadlines, and delays/ Expect short-term turbulence.
• The partner ecosystem is enthused about what's coming down the road but is also understandably nervous about the transition to the cloud, which could leave them bereft of integration business. Microsoft's experience with a similar transition from SharePoint to Office 365 (which has sort of stabilized now but has given many customers grief in the last few years) does not inspire a lot of confidence.
• Be aware that Dynamics 365 Marketing applications getting previewed seem to bring "breadth, rather than depth" when it comes to functionality. Meanwhile, the Adobe MarTech suite is unusually complicated.  You may struggle to find a sweet spot here.

We'll keep an eye on the new Dynamics product line as it becomes more widely available and deployed. RSG subscribers should line up an advisory chat if you want guidance on your Microsoft or MarTech strategy.