Azure Plus the Dynamics Partner

The Dynamics-in-the-cloud vision remains murky, but partners can take part in giving it shape as Microsoft figures out how to deliver it the right way.

• By Joshua Greenbaum
• January 01, 2009

Last November's Microsoft Dynamics event for analysts had news about impressive new features, customer wins and partner offerings. But it was the information about Microsoft's Azure cloud-computing strategy that stole the show for me. Those details, which revealed as much about what Azure will be as they did about what it won't be, position Dynamics as a key player in an enterprise offering that will transform the market over the next five years.

The reason I'm so bullish on Azure is the ability it offers Microsoft -- and its partners and customers -- to be part of a new on-demand world that we're just beginning to understand.

Initially, Azure and Dynamics sync up largely in the form of CRM Online, which has emerged as the poster application for Azure. CRM Online is a natural for this kind of platform, but its presence in the initial lineup may actually mislead some partners about what Azure has in store for them. So let me start by telling you what Azure isn't about, despite CRM Online's presence.

Azure is not, at least for now, a place where the rest of the Dynamics product line will "flip" into the cloud. While AX, NAV and GP are all capable of being hosted, Azure isn't a hosting environment for big applications that haven't been designed to be optimized in an on-demand, multitenancy cloud. That's good news for partners worried that Azure might erode their sales and services strategies -- again, at least for now.

What will be running in Azure is a collection of traditional back-office services (such as SharePoint and SQL) and some not-so-traditional services (such as CRM), which will be accessible as Web services that can be used to assemble higher-value apps. These services are distinct from the full-blown applications themselves that will use Azure as their platform. Azure services, along with Web services such as payment processing and Internet marketing, are some of the early building blocks that help Azure support a cloud full of "custom" apps that deliver enterprise functionality.

The good news for partners: This functionality isn't coming out of a box, running in the cloud and thereby undermining traditional partner revenue streams. On the contrary, Azure will actually present partners with a potentially bigger sandbox in which to build valuable custom applications that have a low, cloud-based cost structure based on implementation and support.

This is excellent for Dynamics partners precisely because of the "enterprise-y" nature of the composite apps that will be built in the Azure cloud. The basics of using Web-services interfaces to connect services -- in the cloud or on-premise -- are well-known to many Microsoft development partners, but being able to do this within a business context is farthest inside the comfort and knowledge zone of Dynamics partners in particular.

But wait, there's more. In fact, the capability for hosting composite applications as we know them today is actually the least-interesting aspect of Azure-meets-Dynamics. What's much more intriguing is coming up with new applications and services that leverage the cloud's ability to collect and aggregate data and services in a network effect that can yield functionality that can't be built or delivered on-premise.

This promise of doing what hasn't been done before is what makes Azure look like a home run for Microsoft. Sure, there will be many ways that partners and customers will save IT costs by running existing apps and services in the cloud. But those cost savings will pale in comparison to the new business models and opportunities that Azure and Dynamics offer for changing not just how enterprise software runs, but what it's able to do for customers.

Bottom line: This is Microsoft's chance to leapfrog enterprise computing in a big way, and it's your opportunity as well. Be there, or be very, very square.