Firstly, Dynamics contributes less than ten percent of Microsoft’s annual revenues, so its unlikely to get much strategic focus.
Secondly, and in my personal opinion, Microsoft doesn’t ‘get’ ERP: it’s seen numerous changes in senior management over the last few years, the development focus seems to be on product integration with other Microsoft products rather than business application functionality.
Only in 2008 is there a vague mention of Dynamics in the Ballmer top bets list:
“He cited Office 2007, Windows Server (especially in the lower-end of the market), Dynamics ERP and CRM as examples of hot products.”
Recently, Vinnie Mirchandani criticised Oracle for lack of technology vision and Dennis Howlett called Oracle Apps an ‘innovation free zone’. I reckon it’s time that someone started to consider whether Microsoft is an ‘ERP dead zone’.