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Microsoft (MSFT) & WalkMe Alliance to Aid Dynamics 365 Sales

Zacks Equity Research
·4 min read

Microsoft MSFT recently partnered with digital adoption platform provider, WalkMe, in a bid to aid enterprises in maximizing the utilization of Dynamics 365 and drive digital transformation.

Dynamics 365 enterprise users can now deploy WalkMe’s Digital Adoption Platform without an extension.

With the integration, employees can leverage WalkMe’s automation capabilities, and obtain data-driven insights to boost productivity and develop efficient teams.

Coronavirus crisis has compelled governments on a global basis to impose lockdown to contain its spread. Nevertheless, courtesy of the ongoing adoption of digital transformation, and evolving IT and networking infrastructure, majority of the companies are asking employees to work from home.

This remote work set-up trend is boosting demand for efficient software management applications in order to boost productivity, which is where the new integration comes in handy.

Markedly, WalkMe has been adopted by 2,000 companies globally, which includes 58% of the Fortune 100.

The latest alliance is expected to boost the adoption of Dynamics 365 and aid users in maximizing business productivity amid the ongoing crisis.

This initiative is likely to instill investors’ optimism in the stock. Notably, shares of the company have returned 28.3% in the past year, outperforming the industry’s 8.6% growth.

Updates to Dynamics 365 for Boosting Adoption Bode Well

Microsoft has been strengthening the Dynamics 365 platform with AI- and ML-driven capabilities to aid industries in automating business processes and driving innovation.

The company has added intelligent capabilities based on Azure AI and IoT expertise to Dynamics 365 Customer Insights, Dynamics 365 Virtual Agent for Customer Service, as well as Dynamics 365 Supply Chain Management solutions.

Moreover, Microsoft announced general availability of Dynamics 365 Fraud Protection solution to aid banks, merchants and e-commerce vendors in digitally securing payments and enhance online shopping experience.

The company has also rolled out Dynamics 365 Connected Store to empower retail outlets for improving in-store experience with data-driven predictive insights from IoT sensors and video cameras.

These initiatives are expected to bolster Dynamics 365 adoption and drive revenue growth in the quarters ahead. Markedly, companies like Ste. Michelle Wine Estates, Marks & Spencer (M&S), TruGreen, Ecolab, Majans, AEP Energy and Canada Goose, among others, are utilizing Dynamics 365 to digitize critical business processes, which is encouraging.

It should be noted that in second-quarter fiscal 2020, Dynamics business improved 12% (up 15% at constant currency) year over year. Moreover, Dynamics 365 revenues surged 42% (45% at cc).

Further, Microsoft’s strategy of ramping up the Dynamics 365 portfolio is expected to strengthen its presence in the digital transformation market. Per Mordor Intelligence data, the market is envisioned to hit $923.8 billion by 2025 from $342.2 billion in 2019, at a CAGR of 18%. The growth projection favors Microsoft’s initiatives in this domain.

Zacks Rank & Stocks to Consider

Currently, Microsoft carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Avid Technology AVID, OSI Systems OSIS and HP HPQ. While Avid Technology sports a Zacks Rank #1 (Strong Buy), both OSI and HP carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Avid Technology, OSI Systems and HP is currently pegged at 20%, 12.5% and 2.2%, respectively.

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