Getting Dynamic(s) in the Cloud

Microsoft takes baby steps to deliver Dynamics solutions in the cloud, with a bit of a hybrid approach for now.

• By Joshua Greenbaum
• July 01, 2008

What's got me going is the fact that cloud computing could solve a host of issues bedeviling the Dynamics market, starting with how to deliver cost-effective and competitive innovation and going on from there. If Microsoft does cloud computing right, and, in the process, does right by its oft-neglected Dynamics product line, we're going to see one of those rare high-tech revolutions that actually does something -- and delivers value to customers as well. Imagine that.

The basic vision of Dynamics in the cloud looks like this: Sometime in the next five years, customers will be able to choose how they want to deploy the back-office applications that keep the lights on -- finance, human resources, resource planning, supply-chain management. All these components can be hosted in the cloud, or run on-site or be delivered as a hybrid of the two.

Also running in the cloud will be more discrete services that can be tied into hybrid on-site and on-demand systems. This category includes functions that we already outsource, such as payroll, and functions that we're just beginning to think of as being available in the cloud, such as invoicing and global-logistics management. And all of this will be accessible from an Office-based user experience that itself can be, if needed, hosted in the cloud. To complete this vision, the whole environment will be offered up in a platform-as-a-service play; developers can develop in Visual Studio or any appropriate language and deploy the resulting application in whatever on-site and on-demand combination they like.

Microsoft has already taken some baby steps. Office Live is looking more and more serious, and Microsoft CRM Online was launched last spring-proof that Microsoft can put something in the cloud that has value to its enterprise customers. CRM also has a nascent platform play called xRM, which will be able to transition to a platform-as-a-service offering when the time comes. And Microsoft announced at its Convergence conference in March that it was enabling the first set of services that would be run in the cloud. These initial services include payment processing and an eBay-style auction service, among others.

As to when all of this will be available, I've been told that it will take Microsoft five years to really flesh it out. But I think the company can, and will, do the job faster. Regardless, the question isn't so much when Microsoft will be ready, but when its partners and customers will be ready. And therein lies the real "gotcha" in the plan.

Developing for this vision of hybrid cloud/on-site computing isn't for the average developer. It's going to take a lot of business knowledge, a lot of understanding about back-office apps and a lot of foresight about the roles of both business and IT in the coming years.

So if you haven't figured out that this opportunity is best served by the Dynamics partner base, let me say so explicitly. Furthermore, cloud computing may look like it will cut down on partner revenues, due to the lower costs of on-demand computing replacing the higher costs of on-premises revenues. But the deployment opportunities-and complexities-of a hybrid model will mean some high-end consulting for partners who understand how to put together these systems and hook them up to the right combination of cloud and on-premises services.

Once that happens, we'll start to see some impressively innovative and cost-effective solutions that will give the competition a run for its money. Those solutions will also give Dynamics users something to brag about when it comes to the competitive advantages of their IT systems. What's not to like about that?