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FAQ: Inside Microsoft's cloud ERP strategy

Chris Kanaracus | March 21, 2013
The arrival in June of Azure ERP deployment options will usher in some changes.

Why did the availability date for NAV and GP on Azure slip from December 2012 to this June?

There are a few reasons for this, according to Ehrenberg. First of all, the bulk of customers on those products run them on-premises, so Microsoft ended up putting off some work needed to cloud-enable GP and NAV in order to ensure the on-premises version shipped on time, he said. (NAV 2013 was released in October and GP 2013 in December.)

Secondly, Microsoft wanted to make sure the Azure rollout would go right, he added. "We ended up adding a bunch of time to get partners ready," he said, mentioning that other vendors made "early promises" about cloud ERP that "didn't end up happening," in an apparent allusion to SAP's Business ByDesign.

SAP launched ByDesign several years ago with great fanfare but ended up having to scale back the rollout and do some retooling in order to ensure it could make money selling the on-demand software suite at scale.

Microsoft is wise to take its time before opening up access to Dynamics ERP on Azure, both for that reason as well as the mission-critical nature of ERP systems, a factor that has resulted in the software category lagging others when it comes to cloud deployments. Microsoft is confident that all will be ready for launch in June, according to Ehrenberg.

How will Microsoft handle AX on Azure?

The next major release of Dynamics AX will get an Azure option as well. That product is scheduled for early-adopter access in 2014. AX played a prominent role at Convergence as Microsoft, in a shot across the bow of Oracle and SAP, showcased how global cosmetics maker Revlon was standardizing its business on AX.

Microsoft recently rolled out an update to AX that made it possible to run a company on a single global instance of the software, and is hoping to win many more deals like the Revlon one.

"That is essentially going to be first time ever in the industry where someone delivers the ability to run their full business end-to-end in the cloud," Tatarinov claimed during a session at Convergence this week.

While AX partners will play mostly similar roles with respect to Azure on AX, one key difference is that Microsoft will handle the billing and subscription relationship with a customer, rather than having the money flow through partners. Microsoft may desire a greater level of control because AX customers could have more complex licensing agreements that will need to be mapped to the Azure pricing model.

Will Dynamics in the cloud shake up the product release cycle?

Cloud software vendors tend to roll out new features a number of times each year, taking advantage of the deployment model's flexibility, rather than deliver big-bang releases every two or three years.


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