>Even Microsoft runs SAP Finance and Microsoft has a lot of ERP/Finance knowledge in house.

So Microsoft dont Dogfood their own Dynamics 365? No wonder why SAP is winning.

>administrative back office system and came back to the market two years later as the underestimated the complexity.

I have lots of first hand experience with it. As a matter of fact I have never seen any modern ERP replacement that works better than the old one. Because the people who do the design input tell software developers how the ERP should work dont have much experience with the actual task. They are mostly manager who thinks they know something but they dont. ERP / CRM to this day is still an unsolved problem for SME. Large Cooperate Enterprise seems to have adopted to SAP already so the skill is now officially "portable" and part of Resume Driven culture.

Last time I checked (6+ years ago) even the top of the range Microsoft ERP products (which called Dynamics AX at the time) was actually pretty limited compared to SAP - in particular it's payroll module only seemed to handle the US.

It's less about confidence in the product and more about having a product that is the right fit for you. Companies like Microsoft are at the very high end of requirements and complexity. Dynamics is more targeted at small to the low end of large enterprise companies.