April 14th, 2011 by Stephen Jones Leave a reply »

Microsoft’s Cloud ERP Plans

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
users and partners both have questions for Microsoft to answer about its plans.

With Azure,
Microsoft said it can deliver ERP at scale for lower cost, through means such
as multi-tenancy, an architecture that differs from traditional hosting by
allowing many companies to share the same instance of an application, while
keeping their data private. This approach enables vendors to apply upgrades
frequently and more easily to customers, and is more economical.

Microsoft anticipates
many hybrid deployments.

Microsoft may
have some success convincing customers with smaller IT shops to move to Azure, A
single IT staffer may be a database administrator, network technician and
Exchange server supporter,. If the ERP system was moved to Azure, that could
free up time for projects that create new benefits, instead of keeping the
lights on..

How will  a cloud deployment  integrate and co-exist with other systems ? Microsoft
will tackle cloud integration with technologies like Azure Service Bus,

Subscription
pricing, helps customers avoid large up-front costs, but in the long run may
end up costing more.

Meanwhile,
Dynamics ERP has historically been sold and delivered strictly through
Microsoft’s vast partner channel, whether in on-premises or hosted form.
Partners have therefore been the primary “face” for Dynamics
customers, not Microsoft itself. They also depend on ongoing revenue from
services engagements.  Microsoft hasn’t
given partners much information so far

Microsoft is
certainly trying to hammer that message home. “It is hugely important for
us to take the entire ERP ecosystem into the cloud.”

. 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.

Despite that
timeline, Microsoft does not consider itself late to the cloud ERP game
compared to competitors like NetSuite or SAP, and its approach is deliberately
designed to ensure customer success, “Nobody’s doing it in the cloud at
scale today. Everyone who’s doing it today has massive issues. They’re largely
figuring it out,”. Those challenges include privacy, partner models and
ISV ecosystems,

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