Parts of the Microsoft Dynamics business are tilting overwhelmingly online.
Microsoft Chief Financial Officer Amy Hood discussed the company’s progress with its business applications suite during a call with financial analysts on Wednesday. Overall the Dynamics business grew 17% in Microsoft’s fiscal second quarter, which ran from Oct. 1, 2018 through Dec. 31, 2018.
The real momentum is happening on the online side. Dynamics 365, a comprehensive cloud version of Dynamics that was launched in late 2016, saw revenue growth of 51% — triple the rate of the Dynamics business overall.
Hood provided one stunning stat within that Dynamics 365 product set. “This quarter, more than nine out of every 10 new Dynamics CRM customers chose our cloud offering,” Hood said.
Microsoft’s CRM product has long been the cloudiest of the business applications. Dynamics CRM Online was one of Microsoft’s first and most successful software as a service (SaaS) offerings. Within the business applications segment, customers have been much more open to putting their customer relationship management solutions in the cloud than they have been with business critical enterprise resource planning (ERP) applications.
Yet ratios like those that Microsoft is seeing with CRM carry an inexorable momentum. With more than 90% of new customers choosing the online version, Microsoft will need to dedicate more and more of its development and support resources to the cloud version. That provides another argument for partners with customers wanting to stay on-prem that it will only be harder and harder to get new features and timely support.