The Impact of Microsoft’s Acquisition of FieldOne on the Global FSM Landscape: An SFG Analysts Take (Part 2 of 3)

How the Acquisition Jives with Market – and FieldOne Customer – Expectations

While the market expectations for the impact of the acquisition initially rolled out at a heightened level, there was still some skepticism as to exactly how “all in” Microsoft will be in offering a true Field Service Management (FSM) or Service Lifecycle Management (SLM) solution. However, Slasky assures that “The team at Microsoft, in the Dynamics group, has been following the FSM or SLM space for many years. They know all the players in the space and have contemplated whether to build or buy a solution that addresses this very large and rapidly growing market.” Obviously, they chose to “buy”.

“In their many discussions with their enterprise customers, Microsoft has come to fully appreciate how significant a need there is for a Field Service solution, and how underserved this market really is. The customer feedback has validated much of their internal thinking, and their intention to go after this market was truly the impetus for the acquisition of FieldOne.” Slasky goes on to say that “We have been working with them over the past couple of years, with increasing frequency, on ever-larger opportunities. The acquisition of FieldOne is a natural extension of that working relationship which will allow Microsoft to realize their aspirations of becoming a dominant force in the Field Service Management market.”

As is the case in any major acquisition, while the market is typically impacted by the changing composition of the overall vendor landscape, it is the existing customer base that is generally the most heavily impacted segment. Again, Slasky assures his FieldOne customers that “Microsoft has repeatedly commented that their customers and ours are the biggest beneficiaries of this transaction. Customers will benefit from an even tighter integration of FieldOne Sky and Microsoft Dynamics CRM that leverages powerful predictive analytics and weaves intelligent Field Service functionality into the increasingly innovative Microsoft Dynamics offering. By pairing FieldOne Sky with the capabilities of Cortana Analytics, Parature and Power BI, to name a few, both Microsoft and FieldOne customers will have predictive maintenance and Internet of Things capabilities at their fingertips.”

Further, since the “Microsoft and FieldOne product teams have been working together for some time now … the real benefit will come when they can truly share their respective product roadmaps and fully leverage solutions for the good of the customer. There are things that FieldOne does exceptionally well that will allow Microsoft to leverage in the core Dynamics CRM product. In the same way, the product roadmap for Microsoft Dynamics CRM will allow FieldOne to better leverage the core platform for key features that customers are asking for. This will become all too evident for customers on product releases later [in 2015 and 2016].”

Clearly, the acquisition of FieldOne by Microsoft is a game changer – particularly for the existing Microsoft Dynamics CRM customer base that is involved in any aspects of the field service management market. According to Slasky, “More and more enterprise customers want to benefit from the breadth and scale of their software vendors who have integrated solutions to offer them. Customers have repeatedly told Microsoft and FieldOne they prefer to have the large software companies provide the solutions that are so instrumental to their daily operations – solutions like FSM and SLM.”

So far, Slasky has been encouraged that “Customer response to the announcement has been nothing short of ecstatic as the market realizes how much will come from further product development that reaches more broadly across FSM/SLM. For customers to now have a single source where they can purchase end-to-end solutions – CRM for their sales efforts, Parature for their customer support needs, and FieldOne for their field service needs – meets the needs of so many enterprise accounts looking for these very solutions as part of their customer engagement strategy.”

However, perhaps, the ultimate aspirations of the “new” Microsoft/FieldOne FSM solution is to position Microsoft as “a remarkably significant player in the FSM space” by joining forces and offering its solution “through Microsoft.” The primary goal at FieldOne has all along been to “bring our solution to the enterprise, empowering them to meet the twin objectives of delivering a superior, differentiated customer experience and doing so in the most efficient and productive manner possible”.

The Market’s Initial Reaction to News of the Acquisition

Largely, the market’s initial reaction to news of the acquisition has been positive – although some still remain skeptical as to the potential magnitude of the “game changing” impact it may ultimately have. Others believe it to be a good move, but mainly for existing customers of the two organizations who will likely benefit from the expansion of their CRM offerings into the FSM domain, and vice versa – but, only for those firmly immersed in the field service management sector.

Still others see little, if any impact to those services organizations that are currently using, or planning to use another FSM solution provider to manage their service operations – that is, other than FieldOne, regardless of whether they are using Microsoft’s CRM product or not. Among this group, clearly the news has been positive – but not necessarily seen as a major “game changer”.

Among some of the leading published reactions to the announcement are the following:

  • Fortune expounded that “Microsoft is serious about capturing the attention of information workers who aren’t sitting at desks. That would be repair people and the like who, by necessity, are on the road as opposed to in the office.”

It further stated that this acquisition represents, “the first big public move out of the Microsoft Dynamics business applications teams since it was swept into the software giant’s cloud and services group as part of a massive reorg in June [2015]” coming “just four months after the two companies signed a strategic alliance to integrate Microsoft Dynamics customer relationship management application with FieldOne’s flagship suite, which includes scheduling, routing and inventory.”

The magazine then added that “Some estimates suggest [the field service management market to be worth about $18 billion” and that ‘Microsoft’s acquisition pits it against ServiceMax, which is closely allied with Salesforce. That company added more than 140 companies to its cloud platform last year, including enterprise accounts with up to 40,000 technicians. The deal will also get the attention of Oracle, which moved more aggressively into the market last year [2014] through the buyout of TOA Technologies.”

  • Venturebeat, the tech news organization, noted that “The deal comes four months after the two companies announced a ‘multi-year agreement’ that would allow companies to access Microsoft Dynamics and FieldOne’s tools in one package,” and that “Buying FieldOne instantly turns Microsoft into a go-to provider for yet another type of business software and helps the tech giant diversify itself a little bit further. But perhaps more importantly, over time Microsoft can set a new standard for what field service software can be, by connecting it with sophisticated tools like the Cortana personal digital assistant that’s part of the recently announced Cortana Analytics Suite.”

They went on to emphasize that, “The company’s software can run in companies’ on-premises data centers or as a cloud service” and that “Mobile apps are available for field service workers.”

  • The VAR Guy noted that “Microsoft sees FieldOne’s mobile apps and cloud services aimed at remote workers, including automated scheduling, dispatching, work orders, inventory contracts and collaborating, as offering another element to an end-to-end enterprise solution with its Dynamics platform,” and repeated Microsoft Dynamics partner group program manager, Param Kahlon’s, claim that “What keyed Microsoft’s interest in FieldOne was the mobile component” and that mobile customer service technology is “one of the key areas that will drive the growth of Dynamics CRM.”
  • GeekWire noted that “The acquisition comes as Microsoft sheds products and services in other parts of its business, including scaling back its Windows Phone hardware business, the recent sale of its display advertising business to AOL, and the acquisition of Bing Maps assets by Uber”, thereby suggesting that this may represent a significant shift in the direction Microsoft will be taking to support its customers’ total services needs in the future.
  • The Street noted that “Microsoft shares are advancing 1.79% to $46.48 on Thursday afternoon, after the company announced today that it is acquiring FieldOne, a field service management solutions provider.” It also repeated some of the official announcements from Microsoft that, “The acquisition will give Microsoft the ability to take service directly to the customer, as enterprises are looking to improve their responsiveness with customers,” and “additionally, as FieldOne allows businesses to drive revenue, reduce costs and deliver great customer service, it will only enhance Microsoft’s customer service capabilities.”
  • eWEEK headlined its post with “The deal is an early step in bringing predictive analytics and IoT-driven workflows to field service workers.”

The e-magazine also reported that, according to Bob Stutz, Corporate Vice President, Microsoft Dynamics CRM, ”FieldOne’s technology will be incorporated into the Dynamics CRM product portfolio. Param Kahlon, partner group program manager and CRM program manager at Microsoft, also told eWEEK that “In terms of integrating the tech and the company’s talent, the companies are already on the same page.”

“FieldOne has built [its] field service delivery service on our product,” said Kahlon, referring to the platform’s basis in Microsoft’s CRM. “In terms of go-to-market, it’s already built on our stack,” he added, suggesting that there will be few technical hurdles in linking the companies’ platforms. Although the integration process is in its earliest stages, Kahlon predicts that a FieldOne-based solution will be made available first on Dynamics CRM Online and later on its on-premises counterpart.” Further, “Most of the solution’s developers are also expected to make the jump to Microsoft.” It’s the software giant’s “intent to keep most if not all the employees,” Kahlon said.

  • Also, from eWEEK’s interview with Microsoft’s Kahlon, “The deal, several months in the making, helps Microsoft flesh out its cloud-delivered CRM vision. When we look at the Dynamics portfolio, we have strong products in sales, marketing and a pretty strong product in customer service as well. Acquiring Parature solved that [last] part,” he said, referring to Microsoft’s earlier acquisition of Parature, a provider of customer-facing self-service software, in January, 2014.

The technology also aligns with Microsoft’s Internet of Things (IoT) push and continuing efforts to popularize workplace analytics, for work environments such as oil rig inspections or on-site repairs of business equipment or industrial machinery. By layering services like Azure IoT and Cortana Analytics, and armed with “a lot of sensor data,” Microsoft hopes to aid field service organizations in these and other segments in the transition from a “break-fix delivery model to a predictive model,” said Kahlon.

“Businesses are starved for ways of better integrating their field service operations into their customer service efforts,” said Ilan Slasky, CEO of FieldOne. They are juggling “hundreds of millions of service calls and work orders annually,” he stated. Seeking better customer outcomes and more efficient business processes, FieldOne is “seeing demand from all sorts of companies that desire to differentiate themselves from their competitors.”

“They lack the right technology and they admit this freely,” Slasky said of his company’s own customer engagements. With a strong focus on mobile-enabled productivity and collaboration, FieldOne’s platform helps businesses that regularly dispatch field personnel “automate and improve,” he said.

  • MyAppsAnywhere reported, “If you haven’t heard of FieldOne before, this tool is designed to deliver field service management options built around servicing customers while in the field. The acquisition will allow Microsoft to incorporate more customer service capabilities into Microsoft Dynamics CRM.”

“At its core, FieldOne handles the field service management piece of comprehensive customer service. In short, it allows businesses to respond to customer needs while in the field – or as Microsoft states it, ‘taking service directly to the customer anytime a service cannot be managed by phone or other channels.’ In terms of impact, Microsoft’s statement likens the acquisition of FieldOne to the earlier acquisition of Parature and suggests the two will complement each other in Microsoft’s bid to provide comprehensive customer service tools within the Microsoft Dynamics CRM space.”

Further, according to MyAppsAnywhere, what this means to customers is that, “CRM users will have access to a cloud-based service that will allow them to handle work order management, automated scheduling, asset contract, inventory and procurement management, workflow capabilities and mobile collaboration all from a single, mobile source within their Dynamics CRM platform. Think the ability to adjust routes on the fly or deliver service arrival estimate times with smaller windows – FieldOne is essentially offering the flexibility to make customer service decisions off the cuff.”

  • CRMBuyer announced that the acquisition of FieldOne’s technology will “add a new dimension to Microsoft Dynamics CRM” through the provision of “field service management tools for work order management, automated scheduling, asset management, contract management, inventory and procurement management, workflow capabilities and mobile collaboration”. It further quoted Microsoft spokesperson, Stacey Andrews, as saying, “These capabilities allow people in enterprises and mid-market companies to better manage and deliver service to their customers in the field.”

Andrews went on to say that, “This announcement is further evidence of our [that is, Microsoft’s] commitment to providing the most comprehensive customer service offering available,” Andrews added. “We will continue to support existing FieldOne customers, and for new customers, the FieldOne capability will be available with Dynamics CRM in the near future.”

  • Business Cloud News reported that, “Microsoft has acquired FieldOne to strengthen its Dynamics CRM offering,” and that the move was “aimed at complementing its Dynamics CRM customer service capabilities …[since] The cloud-based field service management software is already built on Microsoft technology on the back and front-end (Dynamics CRM), making integration with Office 365 somewhat more straightforward than it would be otherwise.”

The news source echoed Fortune’s belief that “the FieldOne acquisition is a ‘major step’ toward helping it round off its customer services software portfolio” and that it was “reminiscent of a similar acquisition made last year [i.e., 2014] by Oracle” when it “bought TOA Technologies, which it rolled into its Service Cloud offering.”

  • CIO Review called the acquisition “an early step towards deploying predictive analytics and IoT-driven workflows to field service workers;” that “Through this acquisition Microsoft integrates FieldOne’s technology into Dynamics CRM product portfolio;” and that “The technology affiliates with Microsoft’s Internet of things (IoT) catering to workplace analytics.”

In the CIO Review piece, FieldOne CEO, Ilan Slasky, was quoted as saying, “Businesses are starved for ways of better integrating their field service operations into their customer service efforts. Seeking better customer outcomes and more efficient business FieldOne is seeing demand from all sorts of companies that desire to differentiate themselves from their competitors.”

In each of these industry reviews, from a variety of sources, one thing is clear; the consensus is that most analysts believe that the acquisition is a “win-win” for both existing Microsoft Dynamics CRM and FieldOne customers. However, the one question remains as to whether the “new” Microsoft/FieldOne FSM solution will be the one to dominate the market in five years or less. For this, the jury is still out; however, there are arguments – on both sides – for why this may, or may not, be the case.

[Watch for Part 3 coming up shortly in a subsequent @PollockOnService Blog!]

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