Microsoft Attempts to Undercut SAP, Announces A Two-Tier ERP Connector

To the surprise of very few familiar with the incessant sparring between ERP software giants, Microsoft was one of a few enterprises to try and undermine SAP’s Sapphire conference. During the conference last week, the German software company announced the general release of their (much-anticipated) cloud-based ERP system, Business ByDesign. Microsoft, meanwhile, made a move to keep ERP buyers thinking SAP is a legacy-heavy ERP provider: they announced a new connector that will accelerate two-tier ERP deployments between Microsoft Dynamics AX and SAP Business Suite.

To wit, the connector will allow MS Dynamics AX’s IT users to leverage the platform across subsidiaries, divisions, and branches of large organizations, if those companies are using SAP Business Suite at their corporate headquarters. Specifically, the Micrososft connector will facilitate financial consolidation, integrate supply-chains, and automate plant operations by tightening decentralized manufacturing processes.

Many extensive companies operate on two-tier ERP structures, so in many ways this is just a smart move for Microsoft (or any other ERP provider), allowing them to capitalize on that situation. In fact, Altimeter Group analyst Ray Wang conducted a study indicating that some 32% or companies are considering such an approach.

Still, it would be naïve to think that this isn’t just another play by Microsoft to associate SAP with the monolithic ERP software implementations that many companies are stuck with. This isn’t a huge wound, and likely won’t have a big impact on how SAP Business ByDesign fares. But it’ll be interesting to see how SAP eventually responds to being hounded at every turn on their journey to finally provide a complete cloud ERP software platform, and see whether they’ll ever be able to shirk their reputation for clunky, dated ERP implementations.