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Microsoft's cloud ERP plans get mixed reactions

Chris Kanaracus, IDG News Services | April 12, 2011
Microsoft's announcement this week that it would begin offering its Dynamics ERP (enterprise resource planning) software via the Azure cloud platform drew significant interest from attendees of the Convergence conference in Atlanta, but some users and partners have questions Microsoft has yet to answer about its plans.

However, he added, "there's been room for us with [Dynamics] CRM Online, so we're thinking there's going to be some aspects where we fit in."

Microsoft is certainly trying to hammer that message home. "Whatever we do, we bring the ecosystem with us," Tatarinov said during a keynote address Monday. "It is hugely important for us to take the entire ERP ecosystem into the cloud."

It is not as if Microsoft would attempt to cut partners out of the loop, given their important role both as ISVs (independent software vendors) and systems integrators and as the vendor's sales channel.

For one, partners will be able to sell "cloud-enabled" vertical applications, services and add-ons through the Dynamics marketplace. Microsoft has also released a Cloud Partner Profitability Guide that is supposed to help partners mull over the financial implications of the cloud deployment model.

Partners "will still be very, very involved with the process," as Dynamics software moves to Azure and Microsoft's own data centers, said Guy Weismantel, director of ERP marketing. "Partners are still going to own the primary [customer] relationship in most cases. In today's environment, the partner's generally in the lead. We don't anticipate much changing as we move into the cloud."

However, it may be different for AX customers with multinational accounts, according to Weismantel. AX is aimed at larger companies, particularly manufacturers. "With those types of companies, they may want a direct relationship with Microsoft," he said.

Microsoft is still working on how to handle billing for Azure ERP so customers are presented with a single invoice, he said. It has had some practice, however, thanks to CRM Online, he added.

Partners will still have great flexibility to customize Dynamics software even when it is residing in a multi-tenant environment, although the process may need to be more regulated, according to Tatarinov.

That said, Microsoft has of late introduced much more regimentation and methodologies for development than in the past, he said. Now it will be about "taking it to the next level in the cloud."

"We have a broad partner ecosystem," Tatarinov added. "Some will make the transition, some will continue to sell on-premises."

In any event, members of the Dynamics ecosystem have plenty of time to figure out their positions. The first Dynamics application to hit Azure will be NAV 7, scheduled to be released next year.

That means it could be several years before the entire Dynamics lineup is ported to Azure.


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