Microsoft Powers D365 With HoloLens & AI, Ups Ante in CRM
Microsoft MSFT recently fortified its presence in the “mixed reality” (MR) space by introducing Dynamics 365 Remote Assist and Dynamics 365 Layout. This move is in sync with its bid to strengthen Dynamics 365 (“D365”) offering with HoloLens MR glasses. The new solutions are set to release on Oct 1, this year.
Notably, the term “mixed reality” coined by the tech giant itself, implies a merger of Augmented Reality (AR) and Virtual Reality (VR) technologies.
Further, the company has integrated D365 with robust artificial intelligence (AI) applications to introduce Dynamics 365 AI for Sales, Dynamics 365 AI for Customer Service and Dynamics 365 AI for Market Insights.
Raising The Bar in CRM
The customer relationship management (“CRM”) and enterprise resource planning (“ERP”) providers including Salesforce.com CRM and Oracle ORCL, among others are striving to enhance their portfolio by integrating their offerings with AI.
However, Microsoft intends to get ahead of the curve by adding innovative MR techniques in CRM and ERP domains with HoloLens MR glasses in D365.
The company utilizes insights from its partners and customers for devising the new methods. Dynamics 365 Remote Assist, as the name suggests, enables the user to fix problems in real time by connecting to the required help (technician, or any expert as required) without them having to travel to the required location.
The expert can see through the problem areas with the HoloLens glasses (built into Windows 10 operating system) and can guide the worker with doodles and annotations to assist the person in fixing the problem.
Dynamics 365 Layout enables the designers to optimize the utilization of physical space in a store, warehouse or factory with 3D representation. Once the layout appears conducive to the design engineer, he or she can share it with the 3D effect in real time for approval.
Microsoft’s push into AI and other emerging tech spaces will help it to compete against fellow industry giants such as Amazon AMZN, Alphabet, among others. The two new offerings using HoloLens and the three AI integrated applications are expected to revolutionize financial planning methods.
The new solutions are in sync with company’s vision of making AI simple to use, eventually up-scaling its benefits to day-to-day aspects of life.
Notably, Microsoft’s growing cloud-based CRM and ERP segment, D365 revenues skyrocketed 61% (56% on a constant currency basis) in the fourth quarter of fiscal 2018. Overall, Dynamics business grew 11% (8% at cc).
What the Investors Need to Know?
Shares of Microsoft have returned 34% year to date, substantially outperforming the industry’s rally of 28.4%. In the same period, the stock has also fared better than the S&P 500 index’s rise of 10.1%.
This outperformance can primarily be attributed to its rapidly expanding efforts in AI and Internet of Things (“IoT”) based developments. Undisturbed focus on Azure remains a key catalyst.
Market research firm, IDC projects global spending on AR/VR to witness a 5-year CAGR of 71.6% between 2017 and 2022. Moreover, spending on AR/VR products and services is expected to reach $27 billion in 2018.
Further, IDC forecasts the overall AR and VR headset market to grow 6% year over year to 8.9 million units in 2018. Unit growth is expected to finally reach 65.9 million units by 2022.
We believe integration of HoloLens with D365 is a smart move. Adoption of D365 is anticipated to bolster further in the quarters coming ahead as the company empowers it with innovative techniques.
Moreover, per a report by MarketsandMarkets, the AI market is anticipated to hit $190.61 billion by 2025 at a CAGR of approximately 36.6% from $16.06 billion valued in 2017.
The aforementioned reports reinforce Microsoft’s intention to capitalize on the immense potential of AI, MR, among other emerging technologies.
Microsoft’s HoloLens offers MR technology and has gained significant adoption among developers ranging from healthcare, architecture, construction industries to scientific research domain.
Per The Verge, the company is planning to showcase HoloLens 2 headset later this year. The lighter device is anticipated to include latest Kinect sensor and will be supported by a customized AI chip. Microsoft is also expected to lower HoloLens 2 price (currently starting from $3000) in order to attract more customers.
The company is putting its best foot forward to gain a competitive edge in the AI, and MR market at different levels, from strengthening automated systems to virtual assistants to enhancing financial processes and simplifying them for customers.
Microsoft carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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