So Microsoft is officially entering the dealer management system (DMS) business. We have a year to go before its pilot program is launched, but what is the meat behind this story and how does it affect you?

It all starts with the Nellemann Group, a Danish-based automobile import and retail company of over 100 years. Infonizer, a fully owned subsidiary of Nellemann, is the IT company behind Microsoft's initiative into DMS-land. Infonizer is a Microsfot Certified Business Solutions Partner that utilizes Microsfot's Dynamics AX ERP solution, from which Microsoft's DMS will be produced.

What this means to me is that Microsoft is obviously thinking globally here. The automotive online retail business is solidifying in the U.S. in a big way, but what about Europe, Asia, and South America? ADP and R&R are making strides in this direction, but Microsoft, being Microsoft, could very well have a multi-continental solution that puts these two giants in the hot seat.

What are your initial thoughts about Microsoft enetering the DMS business?

Post a comment now to my blog today - Blog Pro Automotive: Microsoft goes DMS...but how and why?

It was only a matter of time...staring at DMS systems all day and recognizing how user friendly they are not, it will be interesting to see what Microsoft can come up with.

Now that I think about it, i'm curious as to what else Microsoft has in store in the post-Bill Gates era.

Good or Bad...i'm sure there will be some surprises on the horizon.

It could be because MSN's partner in the DMS market (Reynolds & Reynolds) killed its MSN based DMS known as The Saturn Project / E2 / Grand Slam / Generation Series.

It could be that this is a $2B / year market MSN has virtually no presence in.

It could be that retail automotive is a $700B / year market with dreadful B2B and B2C connectivity... and the 20-30 year old DMS's are big culprits.

Having been the COO and founder of a web-based DMS company

Darwin XE | Comprehensive Dealership Management Software

I will say that MSN has their work cut out for them. No slight on them, it is just a lot to do and in a mission critical (ERP) environment to do it in. The integration, service and parts requirements across the multiple OEM's aren't that difficult technically, but as a workflow enablement system they are a dog's breakfast to make substantially better... and users love it when better (different) gets jammed down their throat.

eCommerce (consumers buying from dealers) is sooooo much more exciting... and value added.

Doing due diligence on a DMS is like watching fresh paint dry. Boring as anything and after a long time there is really no way to know if you are done except to touch it... and by then it is too late if you made a bad decision.

Being an entrepreneur, I always ask:

"What is it that will make MSN successful in this market?" Lower price? Better what? How does the dealer make more money by buying MSN over xyz?

Having large sums of money doesn't ensure success (but it does help). They would have enough to buy a few dealerships to insist their pilots use the software.

Beyond MSN's technical risk in entering a space it knows little about and has no sales distribution in... these are the big questions everyone in retail automotive should be looking to MSN for answers on... because that is where MSN's entry will be successful (or not).

If the goal is change, then the answers should be compelling and clear... and better than SAP's now that it too is likely making a foray into DMS.

At NADA in 2007 we met up with the infonizer team. After seeing early stages of their product, and talking to the owners, we realized that their product is an adaptation of Dynamics. It will be many years before their product is even close to being ready as a real world DMS.

From my conversations with those in the loop, it was communicated that they could begin piloting dealers as early as summer 2007. My sense was that they expect a 2-3 year testing period before it could be a significant player. This definitely has my curiosity.

Has anyone heard anything about this lately?

Nothing on the subject has shown up lately on my radar. Here is a press release from DealerTrack a year ago about their software integrating with it:

DealerTrack Holdings, Inc. - DealerTrack Announces Integration With Microsoft's New DMS

-Ryan

Saw the Microsoft DMS in "action" at NADA 08, had a pretty lengthy discussion with their rep also. Seems they are still about a year out of production. Product is definitely looking promising though.