Microsoft’s giant step forward for enterprise SaaS

Published on the 12/10/2016 | Written by Donovan Jackson

Microsoft Dynamics 365
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Back in July this year, Microsoft announced Dynamics 365, a new addition to its enterprise applications which takes on the nomenclature of its popular Office software-as-a-service product line. Today, in a livestream from its partner conference in Tampa, Florida, the vendor provided a ‘first look’ which provided more detail of what Dynamics 365 is all about.

Just like the switch from ‘regular’ Office to 365, the introduction of Dynamics 365 above all marks an acceleration of Microsoft’s directional push into software as a service, this time for enterprise applications.

Taking the lid off Dynamics 365, Scott Guthrie, EVP of Microsoft’s cloud and enterprise group, said the new product is designed for the ‘broader cloud’, including Office 365, Power BI, Azure IoT and Cortana Intelligence. “This is a special offering which is going to enable you to accelerate business and find new sources of business value.”

Unlike Office, the company’s Dynamics brand is not a suite of products, but a collection of product suites – four ERP solutions, Dynamics CRM, and related product add-ons such as POS, Management Reporter, Marketing, RMS, Social Listening, and Parature.

As a result, Dynamics 365 isn’t so much an evolution of those products, most of which are available as hosted solutions with at least some elements of SaaS about them, but rather a new cloud solution set which combines ERP and CRM, hosted of course on Azure. That said, Dynamics 365 draws on the existing products, as it includes elements of Dynamics AX (Microsoft’s top-end-of-town ERP), CRM Online, and new SaaS financials package (which was codenamed ‘Project Madeira’ built on the Dynamics NAV platform), built on a common data model.

Intelligent applications
Guthrie said Dynamics 365, by pulling CRM and ERP into one service, provides integrated business applications functioning as a service in the cloud, with built-in artificial intelligence, available as standalone apps to address specific business problems, and which integrate with existing on premise software. Logging in to Dynamics 365, he said, will show the user all apps which are relevant to their tasks, while the AppSource marketplace provides the ability to find applications specific to industry and provision and integrate those into the Dynamics home screen.

A demonstration of context-aware applications showed just what an intelligent application is and can do: from an Outlook email, Dynamics 365 recognises names, order numbers and other data, matches it to records in other apps, and automatically generates quotes, purchase orders and other documents with a few clicks.

In an emailed response to questions, Intergen’s Dynamics GM James Page said that the high adoption rates of Office 365 in New Zealand indicates market maturity and readiness for online business. “We seem to be a country that openly accepts the cloud principles, which bodes well for the adoption of Dynamics 365.”

Intergen is a member of Microsoft’s ‘Dynamics Inner Circle’, providing it with something of an inside line on developments within this aspect of the vendor’s business.

Page described the new solution set as a sensible move from Microsoft. “[Locally] That’s driven by the ever increasing needs of Kiwi businesses to drive productivity within this complex global economy.  Dynamics 365, combined with the cloud stack, provides the only Business Platform as a Service in the market which is a major departure from the old model of discrete applications that don’t talk to one another.”

The analyst’s view
Taking some of the wind out of the sails, Oxford UK-based Gartner research director Nigel Montgomery, in response to emailed questions, said right now, Dynamics 365 is ‘little more than a license bundling of Office 365,CRM Online and AX, plus some other modules which Microsoft has created, and tools such as PowerBI and PowerApps’.

“It is cloud only and while it is delivered under subscription, it’s not strictly SaaS at this time in Gartner’s terms. That said, customers may not notice or even care,” Montgomery added.

In his view, the big change is in those three magic words: common data model. However, Montgomery noted that this is in beta and will be available later this year. “[The common data model] will enable a big step for the combined app services that make up Dynamics 365. The likes of Salesforce and NetSuite already have this and its needed if Microsoft seeks to provide a full enterprise-wide suite of services.”

Microsoft’s major advantage as it forges into the enterprise SaaS market, is Office. “Remember that Microsoft is the only ERP vendor which can also deliver [these] services. If delivered as a single set of services, Microsoft has a very strong, arguably the widest, offering for mid-market companies.”

Pricing and availability
Some pricing and licensing details had emerged recently, with ZDNet’s Mary Jo Foley reporting last month that the software will be available in Business and Enterprise editions. ‘The Business edition of Dynamics 365 is aimed at companies with between 10 and 250 employees. The Enterprise edition is for those with 250-plus employees. The Dynamics 365 Business edition includes Financials, Sales, and Marketing modules’ she wrote.

The Business Edition will include financials, sales, and marketing modules, while Enterprise will include operations (ERP), sales, marketing, customer service, field service, and project service automation modules.

Providing some indication into pricing, Foley unearthed unofficial information from a partner which indicated that there will be four options for licensing Dynamics 365 Enterprise: In US dollars, each module could cost between $40 to $190 per user per month; Dynamics 365 Enterprise Edition (Plan 1), for $115 per user per month; Enterprise Edition (Plan 2), which adds Operations, for $210 per user per month; and Dynamics 365 for Team Members Enterprise Edition for ‘light users’ for $10 per user per month.

Business Edition, on the other hand, looks like it will cost US$50 per user per month, giving users Financials, Sales, Marketing, and Microsoft’s application business app development service PowerApps.

Asked about local cost, Page said Cloud Solutions Partner pricing is available; he added that based on the pricing model, consuming the platform as a whole is ‘compelling’. “We expect businesses to be pretty excited by this opportunity to simplify, not make simple, their business solutions landscape, allowing organisations to focus on what they are good at rather than being shackled by unyielding IT.”

Montgomery provided further insight, and said Microsoft needs to find a way to provide a simple to apply and competitive subscription model. “With so many moving parts, its not going to be easy. Early signs don’t seem to suggest they have achieved simplicity.”

In terms of availability, while on stage in Tampa Microsoft trumpeted the use of Dynamics 365 by a number of clients including jet engine manufacturer Rolls Royce, restaurant chain TGI Fridays and forecaster AccuWeather, it appears the software isn’t just yet ready for Joe Public to start queuing up.

Instead, on its official blog, Microsoft said the first of seven discrete Dynamics 365 applications will be rolling out in 135 markets and 40 languages from 1 November.

With Gartner analyst Denise Ganly recently pointing out that as a service models are not necessarily cheaper, simpler or faster than on premise models, development of existing Dynamics product lines can be expected; however, in Page’s view. “The future for ‘on-prem’ is very interesting.  As with all solutions in the market you have a choice, either cloud or derivatives thereof, or on premise. With Dynamics 365, Dual-Use rights provides customers with the efficiency of subscription pricing with either a cloud or on premise offering.”

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