Microsoft India claims third spot in local business software market

Enterprise resource planning, or ERP, is a business software deployed to manage information and resources, while customer relationship management, or CRM, is used to keep track of customers.

Window of opportunity: Microsoft India’s managing director Rajan Anandan says the firm currently has a customer base of 1,500 in the domestic ERP and CRM market, three years after its entry into the segment.Hemant Mishra / Mint

“Today, we have established a 1,500 customer base for our ERP and CRM offerings under our Microsoft Dynamics portfolio. In spite of the tough market conditions, we have been adding a customer a day in this business," Anandan said.

The US-based Microsoft Corp., which reported revenue of $58.44 billion (around Rs2.8 trillion) for its fiscal year ended 30 June, does not give a break-up of country-specific turnover, but Dataquest magazine estimates that in 2008-09, its India revenue was at Rs3,298 crore.

The ERP and CRM market in India is dominated by Germany’s SAP AG and US’ Oracle Corp.

Research and forecast firm IDC says in its India packaged software market report for 2009-13 that the domestic ERP market in 2008 was $263.3 million and the CRM market was $140.8 million.

Microsoft, according to IDC, has a 10% market share in ERP and a 4% market share in CRM by revenue.

“We have essentially gone from a zero base to being the third largest player in the market. This is a business we see has a lot of potential where MS (Microsoft) India would grow in the near future," said Anandan.

Microsoft says it has been winning market share because of the lower total cost of ownership if offers, rapid implementation, better usability, flexibility and inter-operability of its programs.

Since the launch, however, the company admits it has tweaked its business model. “Going forward, the emphasis is on our offerings on the cloud rather than just on-premise. This will also help us target smaller customers and quicker rollouts outside the metro cities in India," said Anandan.

On-cloud refers to software being hosted on the Internet and offered as a pay-per-use service. On-premise software resides on a customer’s computer.

“While their (Microsoft’s) installed base has been growing at a rapid pace, ticket sizes of the deals have been small," said Santosh Kumar Sinha, industry analyst, information and communication technologies practice, South Asia and Middle East, at research and consulting firm Frost and Sullivan. “While revenue market share is yet to grow significantly, they have had success in winning business."