Winston Churchill once said in a famous speech: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” With Microsoft announcing the general availability of Microsoft Dynamics AX, built on and for Microsoft Azure, one wonders whether we have seen the final player in the Cloud ERP War appear. Both SAP and Oracle are now being assailed on all fronts. NetSuite is attacking the small and mid market, Workday is attacking the large customers and now Microsoft has entered the fray with a product that might just turn the heads of even more customers.
SAP and Oracle will fight back. In fact one can argue that SAP is already fighting back and is starting to deliver cloud based solutions that it will be successful with. There is critiscism that these solutions are not integrated though. The rebranding of SuccessFactors, Hybris, Fieldglass and Ariba indicates that integration of the applications is well under way, though whether the applications can ever be fully integrated is an argument that competitors will continue to use.
The launch of Dynamics AX on Azure means that companies looking to move to the cloud, can, if they wish look to a single main provider for all their application needs. For many ERP vendors this will be a challenge that they will need to overcome. Scott Guthrie, executive vice president, Microsoft Cloud and Enterprise sums up the approach that Microsoft has saying: “Customers from around the world are using the cloud in incredible ways to accelerate and transform their business.
“Today’s release is an exciting milestone extending Microsoft’s business cloud offerings. It’s now possible for organizations to run their entire business in the cloud with Microsoft — from productivity with Office 365, to business analytics with Power BI and Cortana Analytics Suite, customer engagement with Dynamics CRM and business operations with Dynamics AX.”
When one adds Skype for Business to this list it is only where there is a requirement for specialist applications that means companies will need to look elsewhere.
Like Salesforce with its recent announcement for its Financial Services vertical Microsoft is not assuming that its own software will be sufficient. It had already announced that there are more than 50 ISV solutions available on the Azure marketplace providing pre-configured industry and vertical solutions. Microsoft are also claiming that hundreds more are in development already, whether these see the light of day is another matter. However if they do so it will significantly strengthen Dynamics AX in the marketplace.
Dynamics AX delivers changing faster with LCS
Microsoft has also built its Lifecyle Services (LCS) functionality alongside Dynamics AX. This enables companies to go through its three phase approach to change, define – develop – operate, quickly and with minimal risk and maximum benefit to the customer. The ability to define changes then develop and test them within a ready made cloud environment is something that few can companies are able to do with legacy solutions. Many IT environments have tried and invested many man hours and cash trying to setup suitable test beds for software.
This may also be a lure to recapture some development teams away from AWS as Microsoft improves its own cloud development environment. Josh Greenbaum, principal analyst, Enterprise Application Consulting commented: “Lifecycle Services represents a shift in how companies manage the life cycle of an ERP system in a way that’s never really been done before. The ability to test in the cloud and use the cloud’s natural elasticity and functionality to take the test, flip a switch and make it the actual production environment, that truly is magic.”
There may be some challenges though. Microsoft still appears to be following the traditional approach of development while most ERP solutions that are building for the cloud are trying to move from expensive development processes to configuration options. Workday, NetSuite, Infor and IFS all believe in this approach as it also enables companies to upgrade to later versions of software quickly and easily. For those companies that have achieved the single code base such as NetSuite and Workday these upgrades can be achieved in hours.
Cloud Enabled, cloud ready under over many lands
One of the advantages that Microsoft has is the large number of data centres and different sovereignties from where it hosts Azure. This means that Dynamics AX is not just available globally but can also offer data sovereignty in many countries. Those companies using Office365 will already have looked into these issues and can be assured of where their data will be kept (if they ask).
This global availability is important to many within the Microsoft customer base, not least Renault Sport Formula One Team, whose chief operating officer, Thomas Mayer said: “We do everything through Dynamics AX now; we manage virtually all of our operations. Having what I need to run my business available anywhere in the world is invaluable.”
Other customers are also enthusiastic in their comments in the press release, being evangelical about the updated UI and the ability of Microsoft Cloud to deliver the application anywhere in the world. The new software also includes workspaces which deliver task specific functionality for key job roles. Implmentation partners will no doubt take these and modify them to suit individual businesses.
Two examples cited are first the Financial Period Close Workspace, which delivers functionality to streamline this critical, often complex process. The second is the journal process workspace where users are given the ability to enter, post and approve journal entries in addition to commonly used inquiries such as trial balance.
Conclusion
Some commentators see this announcement as something that will catapult software sales for Microsoft forward and let them capture a huge chunk of the ERP market. That ignores the fact that this is a very competitive market with a lot of companies with long established solutions. Only when some of the companies looking for ERP solutions have actually chosen Dynamics AX and one of Microsoft’s partners will statements like the one Peter ter Maaten CEO from Microsoft partner HSO become reality: “This release is further proof that Microsoft is leading the charge with innovations not just in ERP but in cloud … Dynamics AX will be a game changer for enterprise customers.”
Actual pricing for the solution is not available online, but Microsoft has recognised that companies do not always want full user licenses. The Microsoft options deliver three license versions, a self-serve user, a Task user and an Enterprise user. As with most Microsoft licensing it is worth checking decisions with a licensing expert. Although they have simplified the options, one needs to confirm exactly what each of the lower level license users is able to do.
While Microsoft announced a number of new users, including companies such as Hagler Systems, Haldex, Icon, Renault Sport Formula One Team, Priva, Smiles, Travel Alberta and Umbra Group it will really need to sign up some major deals in order for Dynamix AX to put it on the map. It will also be interesting to see ho many customers migrate from legacy, on-premises Dynamics solutions to the cloud over the next few months and what Microsoft will be doing to encourage this.
