Microsoft Corporation (NASDAQ:MSFT) is gradually gaining traction in the Customer Relationship Management (CRM) space. The company recently announced that it has entered into a six-year agreement with HP Inc. (NYSE:HPQ) for the deployment of Microsoft Dynamics CRM Online at its sales, marketing and service units.
Although Microsoft did not divulge the details of the agreement, we believe the HP-deal is a major win as it demonstrates the company’s growing clout in the cloud CRM market.
Why This Move?
As per a report published by Fortune, HP has used CRM solutions provided by Oracle Corporation (NYSE:ORCL) and salesforce.com, inc. (CRM) in the past.
However, Microsoft’s Dynamics CRM Online being a cloud-based solution is a more efficient and effective means of collaboration across various business units. HP plans to deploy the new cloud-based solution at 28,500 terminals, out of which nearly 20,000 will belong to the support department and the remaining to the sales department.
Mutually Beneficial Deal
Given the fact that Microsoft’s Dynamics CRM Online is tightly integrated with Microsoft’s cloud offering Azure as well as other analytics and productivity tools such as Power BI and Office 365, the switch by HP is expected to streamline the company’s operations to a great extent.
On the other hand, the six-year HP contract will help Microsoft to strengthen its foothold in the CRM space that is dominated by the likes of Oracle, Salesforce and SAP.
Future Roadmap
In a bid to enhance the capabilities of its Dynamics CRM, Microsoft has made some smart acquisitions such as that of Adxstudio and FieldOne. Additionally, the company’s recent acquisition of LinkedIn (NYSE:LNKD) will also help Dynamics CRM users as they can have access to a large pool of business and customer data.
We note that during the last earnings call, Microsoft reported a 6% jump in its Dynamics revenues as paid seats for its Dynamics CRM Online solutions doubled on a year-over-year basis.
With its mobile-first, cloud-first stance, Microsoft looks poised to strengthen its presence in the CRM space as well.
At present, Microsoft carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology space is Avid Technology, Inc. (NASDAQ:AVID) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
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