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

What the Acquisition Means to Microsoft / FieldOne Users – and Non-Users

The acquisition represents a “win-win” situation for both Microsoft and FieldOne customers for the following two principal reasons:

  • FieldOne’s Field Service Management (FSM) solution enriches the ever-evolving Microsoft portfolio of business management and customer relationship management-related tools to include a more expansive application that is suitable, not only for its services provider customers, but for any business that deals with both customer service and a mobile workforce (i.e., isn’t that virtually every business?); and
  • FieldOne benefits from the ability to support its FSM customer base with a full, and coordinated, spectrum of not only what it takes to run a services organization, but with a complete portfolio of what it takes to run a business.

A longtime complaint among users in the FSM space is that the selection of vendors they have available to them is essentially a conglomeration of individual “best-of-breed” solution providers whose applications cannot – or will not easily – co-exist in a single services organization – let alone in a synergistic fashion. As a result, many users have had to find multiple providers to support them with respect to their needs for a Customer Relationship Management (CRM), Mobile Workforce Management (WFM), Field Service Management (FSM) and various other Business Management applications or modules.

While some of the leading, larger Enterprise Resource Planning (ERP) vendors, such as SAP or Oracle, say they can deliver it all, the services marketplace, as a whole, remains duly unimpressed. It may also be argued that Oracle’s July 2014 acquisition of TOA Technologies should have thrust them into the limelight of the FSM market, or that PTC’s August 2012 acquisition of Servigistics should have done the same. However, the market is still waiting for whatever sea changes “should have” come – but have not, as yet.

There are still many “seasoned” analysts and services managers who remember when Hewlett-Packard’s acquisition of Tandem Computers (1997) and merger with Compaq (2001) were supposed to propel the “new” company to the top of the mainframe, mid-range and PC product and services mountaintops – but that never materialized – although it is still being talked about today!

Some skeptics also forecast a level of disappointment in the acquisition. They say that Microsoft is “too large”, and that it will “gobble up” the much smaller FieldOne FSM business. Others say that FSM represents only a very small percentage of Microsoft’s overall customer base and, as a result, will largely be ignored by the parent company in deference to its other business management and CRM-related endeavors.

However, this acquisition appears to be very much unlike what we may have seen in the past (i.e., Oracle, HP, etc.) in that there really is a true “fit” between the two companies with regard to their respective roles in supporting its customers’ organizations. As pointed out earlier, any Microsoft Dynamics CRM customer with both a customer service and a mobile workforce function will benefit from the acquisition; conversely, any FieldOne solution customer will also benefit from the ease of incorporating a leading CRM function (plus numerous other business services functions) into their overall services operations.

While at first glance, the benefits may not be as evident for non-current Microsoft or FieldOne customers, there is still quite a strong rationale for why the acquisition is a good thing. For example, many services providers do not presently have a formal CRM functionality supporting their customer services operations (i.e., particularly among Small and Medium-sized Businesses, or SMBs). For this group, the ability to select the FieldOne solution to manage their field service operations, coupled with the ability to select a companion CRM solution that works in total synergy with it, effectively eliminates one vendor from each business’s multi-vendor mix, and provides a total solution for managing both their services operations – and their business – all through a single provider.

Again, conversely, a services organization that has been running a formal CRM program for some time now, but is not happy with its present FSM solution provider, can easily make the switch to FieldOne, as it is already part and parcel of the overall Microsoft family of business solutions.

Further, the proliferation of cloud-based CRM and FSM solutions has normalized the overall playing field to allow business of all types and sizes, and of all financial considerations, to select from among the same long lists and short lists of prospective solution vendors, and pay for their services “as they go”, rather than in a large initial capital expense normally associated with a more traditional perpetual license scenario. The cloud has made it easier to select a solution provider, as well as easier to pay for its services. It has also made it easier to switch vendors, if the current one is not believed to be up to par.

Not having sat in on the pre-acquisition negotiations between Microsoft and FieldOne, the rest of us are left to post-acquisition conjecture as to why the argument was sound, and what ultimately drove the two companies to move forward with their joint plans for dominating the FSM market.

First, the impact of the acquisition on the existing Microsoft CRM Dynamics user base:

As a brief back story, in January 2014, Microsoft acquired Parature, a customer service SaaS provider. This acquisition bolstered the existing Microsoft Dynamics CRM product by augmenting it with the capabilities of a world-class self-service knowledge base designed to connect users across multiple channels via e-mail, the Internet, chat and social media. One of the principal attractions of Parature to Microsoft was its proprietary knowledge base that integrates context, search, prediction and learning, tying directly to social data and processes. At the time of the acquisition, Parature boasted 70 million customers – about twice the number from only three years earlier.

Another key benefit was that, along with the combined resources of Parature, Microsoft could provide customers with a state-of-the-art means for solving problems on their own, rather than having to call an “800” number or going into a chat room. As such, it made Microsoft’s Dynamics CRM product a more complete tool for users who wanted the flexibility to manage their customer relationships on their own, and performing as much of the associated problem solving themselves , but without the necessity of having to use an external help desk every time. This was very important to some customers, as a large percentage of users (e.g., gamers, etc.) typically desire to have this added capability for heightening their overall customer experience, without the need for external intervention.

According to Bill Patterson, Senior Director, Strategy and Planning for Microsoft Dynamics CRM, Microsoft already had all the process capabilities in place for routing information in a complex call center workflow, but that Parature could be expected to help broaden its capabilities, as well as position the company to more effectively compete against other major players, such as Salesforce.com, the acknowledged market leader. Microsoft has since fully integrated Parature into its Dynamics CRM platform, although the company plans to run the company independently for the foreseeable future.

By now adding FieldOne to the mix, Microsoft has staked out the ground for positioning itself as a complete solution for supporting all of its services organization customers’ requirements for both CRM and FSM, while also providing a comprehensive knowledge base to strengthen the overall customer experience; along with an entire portfolio of leading business management solutions. In essence, the acquisitions of these two companies allows Microsoft to provide its customers with all of the tools necessary to support their entire business – and customer experience – whereas, previously, they could not deliver the FSM portion of the equation, nor could FieldOne, on its own, deliver much more than FSM.

The two acquisitions have served to coordinate all of these synergistic functionalities under a single roof – but, without necessarily removing all of the autonomy from either of the two acquired firms – at least, not as yet. Nonetheless, it remains clear to see that the addition of FieldOne to the Microsoft family of products reflects the company’s increased service focus as it continues to expand its presence in the global CRM market.

Current Microsoft Dynamics CRM Partners also believe that the acquisitions of Parature and FieldOne will be beneficial with respect to their own roles in marketing and promoting the product. For example, many Partners acknowledge that since the FieldOne solution is built on the Microsoft Dynamics CRM platform, it will ultimately be an “easy sell” for them to their general market base – particularly among the services organization segment. They also believe that the addition of the new Parature Customer Service functionalities (i.e., chat, knowledge management and self-service functionality, among others) will upgrade the current Dynamics CRM Service Module to one that will make the overall product much stronger – and saleable.

The fact that the FieldOne solution is a cloud-based offering, with cloud-based ease of use, implementation and pricing, also makes it a very attractive product for the Microsoft Partners to sell. They also acknowledge that, as the FieldOne solution was built on the Microsoft Dynamics platform, it works extremely well with other Microsoft Products, such as SharePoint and Office 365. However, they are quick to point out that the solution can also work on most of the industry’s other leading non-Microsoft devices that are designed to support a full mobile experience. For some prospective customers, this is certainly one of the most important aspects of the chosen FSM solution.

This FieldOne solution is also acknowledged as being fully synergistic with the Microsoft suite of Dynamics CRM products, delivering a comprehensive set of functionalities ranging from automated scheduling, to work order management, inventory and procurement management, asset contract, workflow capabilities and mobile collaboration. The consensus among most Microsoft Dynamics CRM Partners is generally that FieldOne is an attractive addition to the product line, especially with the support that may be provided through the Parature functionality – all on a single platform, and from a single vendor.

Now, the impact of the acquisition on existing FieldOne Sky users:

Both Dynamics CRM and FieldOne Sky are cloud-based solutions backed by the full resources of one of the world’s leading services organizations – Microsoft. Added to the mix, as previously stated, is the Parature Customer Experience solution. All working on the same platform, these acquisitions provide a comprehensive solution for organizations that either consider field service management to be one of the business’s top priorities, or simply approach it as an add-on to their existing customer services offerings. As such, for FSM organizations, the combined Microsoft offerings will represent a major upgrade to the overall functionality now typically available through a single provider.

FieldOne’s flagship product, FieldOne Sky,  already provides customers’ businesses with full FSM functionality, but, from this point forward, will be seamlessly integrated with Microsoft Dynamics CRM (and via acquisition, Parature) as one of the most complete FSM solutions in the marketplace. FieldOne Sky already provides rich reporting and data visualization features, but as a result of the acquisition, is now able to provide its customers with Microsoft’s full line of business intelligence and analytics-oriented solutions, as well.

The benefits of a combined Microsoft Dynamics CRM/FieldOne offering is quite significant to both segments of existing customers. Basically, the acquisition brings the following to the table for existing Microsoft Dynamics CRM customers. Existing customers will now have the ability to:

  • Monitor and manage their field service needs through the same system they use to monitor and manage their customer sales and marketing activities
  • Add both a predictive and preventive capability in the field, rather than performing primarily in a reactive mode with respect to supporting their field service operations
  • Manage every interaction throughout the entire customer product sales and service lifecycle, leading to a superior customer experience
  • Meeting – and exceeding – customer expectations through the application of “deep insights and intuitive tools” made available through the integrated Parature knowledge base capabilities
  • Measure performance metrics across the company’s entire sales, marketing, customer service and mobile/field workforce through a single platform
  • Track the most important business analytics and Key Performance Indicators (KPIs) that can ultimately drive ongoing service quality improvement
  • Combine field service data with company sales, marketing and customer service data to build a stronger knowledge base to support combined data analytics and continuous quality improvement
  • Integrate the company’s CRM and FSM solutions to enhance cross-functionality and drive operational excellence throughout all sales, marketing, customer service and field service activities
  • Manage all of the company’s workforce resources (now, including the field workforce) by availability, logistics, skill level, workload, automated scheduling and more – all in a seamlessly integrated fashion
  • Shorten the timeframe of customer service cases that bridge between product sales, customer service and field service, thereby fostering faster overall resolution times
  • Integrate robust field service features for the first time, and begin to focus on the overall customer engagement
  • Work with a comprehensive CRM solution that is also fully optimized for field service organizations

For Microsoft Dynamics CRM Partners, the “new” offering also provides the ability to expand their respective sales and promotional activities to include additional cross-selling and upselling opportunities, thereby allowing their previously separate CRM and FSM sales teams to work in concert with one another.

For existing FieldOne customers, the combined offering also provides significant benefits, as follows:

  • The combination of CRM and FSM functionality in a synergistic solution is becoming increasingly important to services organizations that deal with both field service and customer service (i.e., CRM); ultimately, both must be tied together in order to support the full customer experience
  • Because FieldOne Sky is already built on the Microsoft Dynamics CRM platform, it easily integrates with other Microsoft products (i.e., Office 365, etc.) and, therefore, the overall integration process would neither be particularly invasive nor costly
  • The ability to input field service data/information directly into a CRM system will enable users to better support their customers, while also identifying new sales and marketing opportunities
  • The ability to leverage Microsoft’s existing capabilities in Azure IoT and Cortana Analytics can also help customers be more creative in the way they use device-generated data and analytics to identify service opportunities
  • Services organizations can now be much more proactive and predictive in the way they engage with their customers, as their overall customer knowledge base will be that much more powerful
  • Any new FieldOne functions can be delivered either on-premise or in the cloud, via integration with Microsoft Dynamics CRM Online.
  • Users now have an easier road ahead toward the integration of CRM into their overall field service operations, without having to rely to Microsoft’s historically “minimal” field service application, as FieldOne Sky delivers a more robust solution than had previously been made available through Microsoft

Summary and Takeaways

Most industry analysts believe that the acquisition of FieldOne was a smart move by Microsoft, primarily on the basis of the reasons stated in this Analysts Take. However, in terms of providing a summary of the overall picture to the services industry, as a whole, there are still some additional reasons that may be stated.

For example, while Microsoft is a fairly ubiquitous player in the product and services segments of the Information Technology (IT) sector and, certainly in the CRM segment through its market leading Dynamics CRM solution, it has never been perceived as one of the ‘one-size-fits-all” types of vendors that provides its customers with everything they need to both run their specific business processes, let alone their entire business operations.

Even following its most recent acquisitions, the company is still far from being positioned in such a manner. However, with respect to the confluence of CRM and FSM, it can now boast a combined, state-of-the-art, and comprehensive dual solution for its services organizations customers that, arguably, cannot be matched by any other single vendor – especially with respect to users in the various SMB markets.

The acquisition of FieldOne has already done a number of things for the company’s overall reputation, including alerting the marketplace that it is aware of the inter-relationships between its existing portfolio of business products and services, Customer Relationship Management (CRM) and Field Service Management (FSM) – and that it plans to take actions to do something about it (i.e., to become the dominant FSM player within a five-year period).

This move has also notified the market that Microsoft recognizes that businesses need to rely on more than just general business solutions software and, that by delving deeper into its customers’ “mission-critical” business operations, it can become a more important provider to that customer. Again, with all things delivered on a single platform, by a single vendor.

Microsoft’s acquisition of FieldOne was also very smart as it was neither a knee-jerk nor an impromptu decision on its part. FieldOne had been properly vetted over time and, ultimately judged for its “fit” on the basis of its tenure in working alongside Microsoft in supporting a growing portion of its customer base. Its March, 2015 selection as a Microsoft Strategic Global Independent Software Vendor – the only Field Service Management Partner in the Microsoft program – further reflected the faith that Microsoft had in the company, its management team and its solution. This has been key to the success of the FieldOne brand, as Microsoft has since been actively promoting and selling the FieldOne Sky solution through its global sales operations for the better part of the past year.

Still, as in any business acquisition scenario, there are potential downsides to the resultant combination. More than a few industry analysts have noted concern that there might be some prospective customers that believe that their field workforce will not receive full technical and customer support if they are deploying the solution on mobile devices other than those provided by Microsoft (i.e., iOS or Android). If this would be the case, they believe they may find themselves at a disadvantage with respect to receiving the same high levels of support from Microsoft than if their solution were deployed on Microsoft product. However, most analysts do not believe this to be a major concern – although it may cause some in the market to wait just a little longer to move forward with the company if the are still harboring any doubts.

Another area of concern is with respect to potential dissonance among the Microsoft Partner network. For example, the company already has built relationships with competitive vendors (i.e., competitive to FieldOne) in the likes of Astea, Fieldpoint, Wennsoft and several others. As such, some of these other vendors can find themselves both cooperating with, and competing directly against, Microsoft, depending on the specific prospect and opportunity. Of course, this will not be the first time that this type of situation will have arisen as a result of an acquisition; so it is unlikely that anything much will come out of this scenario.

Finally, there is always the risk of the market looking back over its shoulders and asking questions like “Whatever happened with respect to IFS’s acquisition of Metrix, Oracle’s acquisition of TOA Technologies, PTC’s acquisition of Servigistics?” and so on. The greater the perception that some of these vendors may have “disappeared” following their acquisitions, the greater the skepticism may still be with respect to the FieldOne acquisition. However, the recent spate of acquisitions within the FSM marketplace has probably already steeled potential users to set aside their fears based on other vendors’ past actions (or lack thereof), and look at the FieldOne as being a good thing.

If Microsoft can pull it off – and there is much justification as to its ability to do so – there should be little residual concern left in the marketplace after a short period of time. However, the market also clearly recognizes that it has choices and, that Microsoft management would be well-served to allocate its vast resources and deep pockets to assure that its quest to “dominate” the FSM market will reflect a clear and well thought out plan for doing so. It also does not hurt that Microsoft plans to keep the current FieldOne management team intact as it moves forward.

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