Microsoft's move to standardize its enterprise-applications suite offers both opportunity and challenges for partners that sell those solutions.
They say the only constant in life is change, a truism to which companies
selling the Microsoft Dynamics product suites can attest.
The Redmond, Wash.-based software giant has committed to continuing to
release and support new versions of each of the four different Dynamics
enterprise resource planning (ERP) suites -- AX, GP, NAV and SL -- for the foreseeable
future. But it's been 18 months since Microsoft brought the products together
under the Dynamics brand umbrella, and its vision is to one day standardize
the four to a Web services-enabled code base. The latter won't happen
for up to six years. In the meantime, Microsoft will release upgrades
to the Dynamics products that will bring them closer together, especially
The integration of Microsoft's Dynamics lines isn't just a rationalization
of the best features of four similar products with different market strengths
-- it's a conversion of the products to Microsoft's core infrastructure.
For example, going forward, each product in the suite will be integrated
with flagship Microsoft technologies including SharePoint Server, SQL
Server and Office. This could eventually give partners specializing in
Microsoft Business Solutions much more flexibility in quickly addressing
new markets and could make the entire product line a platform that's much
more attractive to ISVs. But in the near term, the push to standardize
lays some heavy burdens on existing partners companies, which are using
a variety of techniques to cope.
Dynamics Growing Pains: A Special
Since making its move into business applications,
Microsoft has bought, built and partnered its way to
steadily increasing revenues and market share. Inevitably,
those gains generate conflicts. For Microsoft and many
of its partners, those are the best kind of problems
to have. But for partners specializing in Microsoft's
Dynamics suite, the issues can get particularly sticky.
In this collection of articles, we examine
three of those issues:
Pender covers the increasing conflict between Microsoft
and SAP as both companies dive into the market for small
and midsize businesses to compete for one of the most
desirable untapped customer bases.
Bekker looks at Microsoft CRM's forthcoming "Titan"
release. With the addition of a Software as a Service
delivery option, Microsoft offers new opportunities
for some partner companies, but also raises the possibility
of elbowing others out .
Gibbons Paul explores how the GP, AX, NAV and SL
Dynamics suites are coming together, and what their
gradual integration means for partners.
One such strategy is adding support for all four Dynamics products in
an attempt to cover all the bases. Microsoft officials generally don't
recommend this approach except for partners with plenty of resources to
devote to each product. But Brian McMurray, vice president of sales and
marketing for InterDyn Business Microvar, a 60-employee Microsoft Dynamics
reseller in Minneapolis, feels that he's hedging his bets against the
eventual code standardization by adding the only Dynamics product he does
not currently support -- AX, formerly Axapta, whose sophisticated features
appeal to larger midmarket companies -- to his stable. It will be a long
and arduous process to staff up to the point where Business Microvar Inc.
(a Gold Certified Partner and part of the InterDyn association of Dynamics
resellers) can sell and support AX. "It's hard to find those people. There's
not a lot of experience in the market," says McMurray. Phase one of his
plan, which should be complete by spring, is to hire people who can then
be trained, eventually receiving certification on the platform.
That's partly because the AX product is only used by 7,000 companies
worldwide, according to Microsoft, making it the least well-adopted of
the four ERP platforms Microsoft has acquired in the last few years. McMurray
is finding it hard to hire people with Dynamics AX experience, but he
says it's much easier to find potential hires with experience in Microsoft
core technologies like .NET and SQL Server. Since Microsoft announced
its plans to integrate these into the entire Dynamics suite, McMurray
has added a few technical staffers with proven Microsoft experience. It's
been cheaper and easier to find and/or train people with Microsoft skills,
he reports happily, than to try to staff for the legacy skills.
Microsoft Dynamics partners share the
following advice for leveraging the Dynamics opportunity:
Be prepared. If you do decide
to support additional Dynamics products, don't pull
the trigger until your team has the appropriate training.
You don't want your customers to have to pay the price
for your lack of experience.
Stay informed. Avoid making decisions
in a vacuum. Keep a close watch over the Microsoft product
roadmap, which changes often.
Consider options. Explore different
ways of obtaining new skills. Hiring and training are
not the only options. This could be a good chance to
join forces with another partner. -- L.G.P.
McMurray believes the effort -- to add Microsoft platform skills in general
and AX competency specifically -- will be worth it in the long run.
"We don't have a lot of upper-midmarket customers. We believe this
will help open the door to that space. We need to reach into a different
segment of the market, expand and grow our business," says McMurray.
Adding AX support now will also stand his company in good stead when the
eventual convergence finally arrives, he believes. Though Microsoft hadn't,
at press time, officially announced plans to favor one application's code
over another, McMurray predicts that AX code will ultimately predominate
because, he says, it's newer and capable of more complex functions. Of
course, that's just his opinion. Every partner company that sells Dynamics,
it seems, has a different take on the issue.
Add Tony DiBenedetto, president and CEO of Tribridge Inc., in Tampa, Fla.,
to the list of those who would welcome the code standardization tomorrow.
Tribridge is among the few resellers that are currently staffed up to
sell all four Dynamics products. "I think it would be better for
Microsoft and the channel for these to be one product sooner rather than
later," DiBenedetto says. He believes that, because the products
and names have changed before, such a shift wouldn't be as disruptive
as it might have been in the past. "It would be a lot easier to sell
net new business," he says. "The pickup would be greater than
DiBenedetto's views notwithstanding, the end date for ultimate code
convergence won't come until 2013 at the earliest, according to Barb Edson,
a director of Microsoft Dynamics marketing. And although it's the name
of Microsoft's well-attended annual conference for Dynamics customers,
"we don't focus on the word 'convergence.' We are focused on building
iterative releases for all the Dynamics products that improve their usability,"
says Edson. "We believe partner opportunities will only increase
as these releases come out."
David Pilz strongly agrees. President and CEO of NAV reseller and Gold
Certified Partner Axentia Solutions Corp. of Toronto, Ontario, Canada,
Pilz sees nothing but opportunity in the days ahead as the Dynamics products
become more integrated with the core Microsoft technology "stack."
"The integration of the products gives us an opportunity to add additional
competencies such as SQL Server and SharePoint Server to our staff. Almost
all of our customers can benefit from that," says Pilz.
David Cintron also sees opportunity in the integration of Microsoft technologies
to the Dynamics line, but he sees costs as well. President of Business
Specialists CQ, a six-person Dynamics NAV reseller and Microsoft Certified
Partner based in Camarillo, Calif., Cintron says his company, which sells
to the manufacturing and telecommunications verticals, will need much
more training to cope with the changes. "We barely have the time
and resources to train our staff on existing features," he says.
Cintron expects to rely heavily on online training and documentation to
get over the hump. He expects to pay at least $3,750 to Microsoft for
a support contract for access to those materials.
"As far as how we'll continue, that's an interesting question,"
Cintron continues. "We have a strong talent base on legacy Navision,
and it would be far easier to continue with this than to invest a lot
of money and time in training" on new Microsoft skills.
Ultimately, a partner company's reaction to the changes, along with its
coping strategy, is individual and tied to the organization's willingness
to withstand change as well as its appetite for risk. No blanket advice
applies: Partners must work through the issues according to their own
circumstances and outlooks.
Standardizing the technologies in the Microsoft Dynamics product line
is a strategic imperative for Microsoft's efforts to grow its revenues
from business applications. James Utzschneider, general manager of Microsoft
Dynamics marketing, says the company aims to not only increase the number
of businesses -- of all sizes -- that use Microsoft enterprise applications,
but also to broaden the usage of the software within each user company
by promoting an interface based on users' individual work roles for all
But the standardization of Axapta, Great Plains, Solomon and Navision
creates big challenges for partners who built their businesses on just
one or two of the four different applications. To reap rewards from Dynamics,
partners may often need more than their existing expertise. Like McMurray,
they must hire new people, train current employees or partner with others
to get the know-how they need. Theoretically, those efforts can be worthwhile,
leading to big financial payoffs. Meanwhile, standardization could make
Dynamics more attractive to broad-based ISVs, who would be able to develop
once for all four products. By virtually all accounts, Microsoft has pursued
the migration thoughtfully and sensibly, using a high-profile national
advertising program to smooth out any confusion that might linger from
having four different products that essentially do the same thing (although
their backgrounds and vertical strengths vary enormously).
"Having one name in the market has had a positive impact on customer
perception," says Pilz, of Axentia. "It was confusing to have
so many names. That didn't help with customer confidence."
DiBenedetto agrees that the name change has been beneficial. "It's a
challenge for Microsoft to compete against Best, SAP, Oracle and Epicor
when there is confusion in the channel," he says, citing other major ERP
players. Selling all four Dynamics products is difficult from a skills-and-talent
standpoint but is easier from an overall selling perspective, DiBenedetto
believes. "We have the luxury of selling the one that we think is right
for the customer."
|Dynamics: By the Numbers
Source: Microsoft Corp., December 2006
of corporate users per product, worldwide
Microsoft Dynamics AX
Microsoft Dynamics GP
Microsoft Dynamics NAV
Microsoft Dynamics SL
The first phase of Microsoft's road map for Dynamics evolution, called
Wave 1, is well underway. In September 2005, Microsoft announced the standardization
of its ERP and CRM product names under the Dynamics moniker. Microsoft
officials announced that they would standardize the user interfaces among
the products, as well, to emphasize usability. Dynamics GP was the first
to get the facelift, with the November 2005 debut of the 9.0 release.
Dynamics AX 4.0 followed in June last year. Next up: a new version of
NAV later this year, then SL.
Slated to begin next year, Wave 2 will focus on each product's back-end
functions. One key takeaway message: Microsoft has a policy of supporting
each of its product iterations for five years after first release. As
the years go by and Dynamics upgrades fill the landscape, at some point,
the 2013 end date will disappear from notice. The migration will be gradual
and seamless, says Edson. Moreover, she adds: "No one will be forced
to move before they're ready."
Before, during and after the acquisitions that led to its unique four-part
stable of ERP applications, Microsoft exhaustively researched how and
why people use ERP software. As an example, Utzschneider cites a survey
of 271 businesses conducted by Boston-based AMR Research Inc. The mid-2005
study, which strongly influenced Microsoft's own long-term ERP direction,
indicated that nearly half the companies surveyed had multiple ERP user
licenses languishing untouched. That finding applied across the board,
for products from all different vendors, for user companies of all sizes.
Researchers said that most survey respondents were frustrated by their
ERP systems, which they found too difficult to use.
Microsoft also conducted its own research on how people used ERP software,
Utzschneider recalls. "We would photograph workers at their desks.
Sometimes they would have eight, 10, 13 windows open for their ERP application
to try to get something done. They would break down in tears trying to
figure out how to use these products." There was a great opportunity,
the Microsoft team realized, both in terms of selling software to companies
that had not yet invested in it and in helping existing customers tap
The first wave, therefore, concentrated on improving usability. The
introduction of role-based user interfaces was key to that goal. Microsoft
identified 50 core roles -- such as sales manager, HR manager, financial
analyst and accounts payable manager -- that are typically filled by users
of its four applications.
The role-based user interfaces are pegged to each of these 50 user types,
incorporating business processes and resources commonly used by individuals
in those roles. In keeping with Microsoft's "People Ready" software
initiative, the interfaces also will tightly integrate with flagship Microsoft
productivity applications including Outlook, Word and Excel.
Some Microsoft partners call Redmond's recent publicity push useful for
helping customers understand how the Dynamics products can help harness
employees' creativity and problem-solving skills.
Still, it takes a lot of selling to show prospects exactly what each product
does and how it will help their businesses.
Cintron heads of one of the smaller channel partners selling Dynamics.
But he's got the right idea when it comes to specialization, according
to Microsoft's Edson. Customers -- and software vendors themselves -- rely on
channel partners to understand their industries and know how to deliver
the enterprise application software and services that are the best fit
for their business. She recommends most partners -- even larger companies -- restrict
themselves to one or two Dynamics products so that they're not stretching
themselves too thin.
Pilz, of Axentia, is a good example. His 45-person firm sells Dynamics
NAV to small and midsize food processors and heavy-equipment manufacturers.
Axentia is also an ISV, selling a dealer-management system add-in to the
NAV product tailored to its target industries.
Some partners that sell only one Dynamics product might worry that Microsoft
might not pick their product to standardize on in the long run, but Pilz
isn't losing any sleep over that possibility. "We manage our business
in five-year increments and this isn't really on the radar yet."
McMurray, whose company will invest heavily in order to sell all four
Dynamics products over the next couple of years, it would be nice if the
code convergence were closer to reality. "I'll probably be retired
by then," he jokes of the projected completion date. "By the
time we get to that, I'm anticipating enough of the front-end technology
will be common across applications that the back-end code won't matter
That pretty much sums up the attitude that Microsoft officials hope channel
partners will take, says Microsoft's Edson, again citing the products'
iterative releases: "We are committed to protecting the partner-based