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Microsoft Convergence Wrap-up

Surf’s up at Microsoft, and partners had better be ready to catch some waves.

At the company’s Convergence conference held in Dallas earlier this week, Microsoft provided details of the roadmap for its Dynamics line of enterprise resource planning applications. The Dynamics application set—a sort of ERP suite cobbled together mainly from technology added through acquisitions—will undergo two waves of change in the next few years. The first one is washing over partners now, and the second will change how partners approach selling Dynamics.

For the first wave, Microsoft is already integrating the four products in its suite (AX, GP, NAV and SL—drawn from Axapta, Great Plains, Navision and Solomon) into the Windows operating system and Office suite of applications and will continue to do so as it introduces Vista, Office 2007 and new versions of Dynamics applications over the next two to three years. The idea behind the integration is to give users a unified view of all four ERP applications within a familiar interface. Users will, for instance, be able to work in a customer relationship management application from within the familiar Outlook messaging interface and use both full CRM and Outlook functionality at the same time.

“I’m actually on one page that is the integration of CRM, SQL analysis, Great Plains,” said Steve Malme, senior director of world-wide mid-market sales at Microsoft, describing the user experience. “CRM is Office. I can’t tell whether I’m in Office or CRM.”

It is that type of integration scenario that other ERP vendors that do not control the desktop will likely have a hard time matching. This is a classic Microsoft play: Simplify the user experience by integrating new tools into the dominant operating system and office suite and thereby freeze out products from other vendors that cannot offer that level of integration.

Microsoft Dynamics in the ERP space could eventually end up being what Internet Explorer was in the browser space when it dethroned and buried Netscape Navigator years ago. While Microsoft is targeting the lucrative market for mid-sized companies that competitors SAP AG and Oracle Corp. also covet, it is not unreasonable to postulate that Microsoft might be able to move in on SAP’s long-held territory among the world’s 2000 largest companies, especially by attacking smaller, less-wealthy divisions of big corporations before making a move on headquarters.

Microsoft is also focusing on simplifying its ERP user interface, traditionally a trouble spot for ERP vendors. Betting that back-end capabilities will even themselves out across the competitive landscape as the company catches up to its rivals, Microsoft hopes to differentiate itself by making its tools better looking and easier to use.

If the first wave for Microsoft Dynamics, integration with Windows and Office, will make Dynamics easier for partners to sell, the second wave will change the way they sell it. Wave 2 involves moving all four applications onto the same platform and offering customers a single, broad-based solution with the “best of the best” of functionality from each application included. Microsoft officials said that the first wave 2 releases will hit in 2008 and 2009 with iterative releases for each product. Officials said that there will likely be one version of the combined Dynamics application for large corporations and another for smaller businesses.

The technology behind the single platform and any proposed migration roadmaps remains a little sketchy, but partners need to be prepared for the changes wave 2 will bring. Partners focused on one product will need to develop broad expertise in the entire suite and switch from a product-focused to a vertically focused strategy.

“We want partners to see more differentiation between themselves based on verticals,” said Tami Reller, corporate vice president of the Microsoft Business Solutions marketing group.

One former Global Partner of the Year, Brondby, Denmark-based Columbus IT Partner, is already moving in that direction, broadening its technology base from its Axapta roots. In January, Columbus IT acquired a Navision-focused partner that specializes in the food and chemical industries. Jim Bretschneider, managing director, said the move was the first in an effort to broaden the company’s technology base and focus on vertical industries.

“The reason why we did this was to kick-start that focus,” he said. “It’s not an option whether we want to do it or not. We have to do this.”

Partners that have anticipated this new wave will be ahead of the crowd, and with Microsoft’s hazy timing for wave 2, there is still time to realign operations and reassess priorities. But, all-in-one Dynamics is coming, and it is never too early to prepare for its arrival, even as partners ride the first wave of Dynamics integration with Windows and Office.

Other Convergence Notes

  • Get your customer references in order. Microsoft’s new Solution Finder service (http://www.microsoft.com/dynamics/solutionfinder.mspx), which links customers and other partners with partners that offer expertise in a certain technology, will be most beneficial for those partners that can prove that their technology and services deliver value. Malme said partners have to produce two solid customer references in order to be listed in the system and will move higher up their respective lists the more references they can produce.
  • Bill Gates spoke candidly about his family during his Monday morning keynote, saying that his 6-year-old son is so into shopping for cars online that the youngster has dealers contacting him trying to sell him new models. He also assured the audience that his kids use the MSN search engine as opposed to rival Google.
  • Microsoft Business Solutions Chairman Doug Burgum connected with some observers during his Tuesday keynote by telling a touching story about how his late father, a grain silo operator, always sought to get farmers the cleanest samples possible for their loads of wheat. Burgum choked up during the speech and had to hold back tears several times.

  • About the Author

    Lee Pender is Redmond Channel Partner magazine's senior editor. You can reach him at lpender@rcpmag.com.