Microsoft Dynamics AX Launches In India; At $15K, Will Retail Industry Buy It?

In order to ride on the retail revolution in India, Microsoft has announced the launch of Microsoft Dynamics AX for Retail. Microsoft Dynamics AX 2009 is a comprehensive enterprise resource planning (ERP) solution for midsize and larger organisations, the Retail edition can connect point-of-sale (POS) and headquarters processes with enterprise resource planning (ERP) and financials right out of the box.

Companies will have to spend about Rs 6 lakh ($15,000) for a license, while the store management POS device will cost about Rs 24,595 ($600), according to media reports.

"With key industry verticals such as retail evolving aggressively, customised vertical solutions have become a huge differentiator, said Subhomoy Sengupta, group head, MS Dynamics India. The company is currently working with both globally and regionally based ISVs on integrating to the latest solution. Recent countries that have been added to the Microsoft dynamics AX for retail network include Brazil, China, India, Israel, and Japan, among others.

The retail industry in India is highly fragmented, with a whole bunch of resellers and distributors and small discrete shops peppered around the country. Selling IT solutions to Indian retailers is therefore infinitely different than say in US, where a handful of key retailers dominate the market. What also adds to the collective woes of tech companies with their ERP and CRM modules is that most of these shops do not have computers to begin with, and for a lot of them, just being able to automate just one part of their operations (typically accounting) is a huge achievement.

All that is changing of course. India has been ranked as the third most attractive nation for retail investment among 30 emerging markets by AT Kearney. The BMI India Retail Report for the first-quarter of 2011 forecasts that total retail sales will grow from $392.63 billion in 2011 to $674.37 billion by 2014.

According to a McKinsey report, organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach $450 billion by 2015. As the sector sees increasing foreign direct investments (FDI), expect our retailers to buy more computers. And get ERP solutions. Dynamics AX 2009 maybe.