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ERP, Dynamics and Convergence in the Cloud

Never before has the word "convergence" been so appropriate a description of enterprise-software offerings from Microsoft. The company has long called its annual Dynamics conference, last held in late April, Convergence, a name which better described the coming together of customers and partners than it did the joining of products. But now, products and product categories really are beginning to converge in Redmond.

Just a couple of years ago, ERP was the centerpiece of the Microsoft Dynamics product collection, which consists of four ERP suites and a multi-platform CRM offering. But now Redmond is selling CRM first -- particularly the Dynamics CRM Online service the company hosts itself.

"There's a big shift" from ERP to CRM at Redmond, says Josh Greenbaum, principal at Enterprise Applications Consulting. "[Dynamics CRM] is getting a lot of attention in the market."

Microsoft offers three versions of Dynamics CRM -- its own hosted service (Dynamics CRM Online), a version hosted by partners and an on-premises deployment. At Convergence, it was CRM Online that got most of the attention, according to Greenbaum. "The real momentum and the real excitement were around CRM in general and CRM Online in particular," he says.

But it's a hybrid model, Greenbaum believes, rather than a pure hosted model, which will be critical for Dynamics. Customers, he says, want hosted business applications to run on top of on-premises enterprise deployments. The Microsoft Software plus Services (S+S) cloud strategy might end up being the right path for Dynamics after all.

"Azure is turning out to be the thing that is going to propel Dynamics into the forefront of Microsoft strategy," Greenbaum says. "The value-add is going to come from the business services that Microsoft can provide on top of Azure. It's providing a multi-tenant format business service that's going to be a big opportunity."

Microsoft is "out there with one of the few hybrid models that's truly a hybrid," Greenbaum says. "They provide a lot of flexibility, and that's a very strong message."

Meanwhile, Microsoft is taking another stab at trying to converge its various Dynamics offerings. The company last month released connectors to tie its Dynamics CRM and Dynamics GP ERP offerings. The connectors are intended to provide links between both the on-premises and cloud-based versions of the two offerings, said Brad Wilson, Microsoft's general manager of Dynamics CRM, in an interview.

"For our very large base of existing Dynamics GP and CRM customers, we have a packaged adapter that will connect those two systems [and] give easy transfer of information between [them]," Wilson explained. "So as opportunities that start out in Dynamics CRM move into orders and invoicing into Dynamics GP, you've got one kind of seamless lead to cash process across cloud-based CRM and on-premises Dynamics GP."

Microsoft also has priced the CRM Online service aggressively, including offering licenses to GP customers for just $19 per user per month. That's less than what Salesforce.com Inc. charges for its comparable suites, though the pricing is introductory and only valid for 12 months.

Wilson also revealed that the next version of the Dynamics CRM code base (which is the same for Microsoft-hosted, partner-hosted and on-premises offerings), currently dubbed CRM 5 and due at the end of 2010, will have native integration into Office 2010 and SharePoint 2010.

About the Author

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

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