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The world’s largest software maker Microsoft Corp. (MSFT - Analyst Report) announced that it won eight customers for its CRM services at the state and local government levels. These eight customers join more than 500 state and local government organizations that are already using the Microsoft Dynamics CRM platform.

The suite won on different counts at these players. The Commonwealth of Virginia adopted the CRM suite to eliminate the need for customized agency solutions. The City of Charlotte, N.C. chose the solution to streamline permitting processes at the time of hosting national conventions, which witness an influx of visitors. The State of Indiana Economic Development Corp. (IEDC) selected the suite to strengthen existing business relationships and pursue companies to boost job prospects in the state. IBM (IBM - Analyst Report) uses CRM software to deliver an efficient call-center solution for the Florida Department of Children & Families Abuse Hotline.

The CRM software equips organizations with advanced cloud-based technologies that increase the efficiency of their operations, solve complex business challenges and improve resource allocation. It also facilitates communication and collaboration among the state and local government offices and reduces IT expenses of these organizations and their partners across the world.

The Microsoft Dynamics CRM team is quite active on the acquisition front. It closed the acquisition of MarketingPilot a few months back. MarketingPilot provides marketing solutions that allow companies to better understand customer choices, based on which they are able to create multi-channel marketing campaigns. Recently, it acquired language analytics firm Netbreeze to further strengthen its CRM product portfolio.

Currently, just like other PC makers, Microsoft is also battling the slump in the PC market caused by the sluggish economy. In addition, the popularity of smartphones and tablets from Apple (AAPL - Analyst Report) and Google have been cannibalizing its core PC market. Thus, it makes sense for Microsoft to strengthen its position in still-emerging segments such as data monitoring services.

Microsoft remains one of the best positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. We believe that Microsoft’s current investments are supported by its strong balance sheet and expect these to drive the next growth phase, improving prospects of market share gains.

Microsoft reported revenues, excluding deferrals, of $21.46 billion in the second quarter of fiscal 2013, up 34.0% sequentially and 2.7% from last year, in line with our estimates. All except the Entertainment & Devices segment grew both sequentially and from the year-ago quarter.

Microsoft has a Zacks Rank #3 (Hold).

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