Home > technology > How Microsoft’s customer data tools are competing with Salesforce

  • Microsoft’s Dynamics 365 tools for customer service and financial planning, are becoming an increasingly important part of its business, particularly its customer data platform.
  • Microsoft’s customer data platform is meant to help companies collect customer information in one central place, so that they can use it to improve customer service. 
  • Dynamics 365 as a whole has the potential to become a much bigger and stronger competitor to Salesforce in the customer data space, Futurum Research analyst Dan Newman told Business Insider. 
  • Microsoft’s product is designed to connect to any data collection tool, whether Microsoft owns it or not, which gives customers more flexibility than Salesforce does, he said. 
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Microsoft’s Dynamics 365 tools for customer service and financial planning, are becoming an increasingly important part of its business and seeing healthy growth, too: Last quarter the product’s revenue jumped 38% year-over-year.

The centerpiece of that group of tools is its customer data platform, which allows companies to collect all their customer information in one place. Centralizing that data ultimately helps companies deliver better customer service and support, according to president of Microsoft’s business applications group, James Phillips.

Last week, Microsoft added new features to the platform, including the ability to collect what the firm calls “engagement data” — like tracking how customers interact with a company’s websites and apps — as well as survey data from another Microsoft Dynamics 365 tool called Customer Voice.

Dynamics 365 as a whole has the potential to become a much bigger and stronger competitor to Salesforce in the customer data space, Futurum Research analyst Dan Newman told Business Insider.

Unlike Salesforce, which focuses on connecting data gathered through its own tools, Microsoft’s platform is designed to integrate with hundreds of other tools and data sources. It has an “agnostic approach” that allows it to “easily connects to many systems of records efficiently and effectively,” Newman said. 

At the same time, the platform deeply integrates with other customer focused tools within the Dynamics 365 suite, as well as Microsoft’s full stack of tools, including from Azure and Microsoft 365, Newman added.

While Salesforce is also working on building a holistic view of its customer data, it’s more focused on making sure customers are able to connect data from its own various tools, like Sales Cloud, Service Cloud, and Marketing Cloud, rather than being an agnostic connector. 

Additionally, Microsoft’s approach recognizes that not all companies have fully moved to the cloud, Phillips said. 

“We have hundreds and hundreds and hundreds of out-of-the-box connectors that allow our customers to connect to the data they already have, wherever it is: Whether it’s sitting in a system 360 mainframe from the 1970s or it’s sitting in the latest-and-greatest SaaS business application,” Phillips said. 

Having engagement data — data about how customers use products and services — like the new features will collect is going to be the most valuable piece of customer information for companies going forward, Phillips said: “It’s that interaction that happens at the point of service delivery or product delivery or digital engagement that often provides the most potentially valuable signal.”

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