Microsoft to put Dynamics ERP on Azure by year end

Microsoft Corp. is planning to roll out its first “cloud-enabled” Dynamics ERP (enterprise resource planning) applications by the end of this year, the company announced Monday during the Convergence conference in Houston.

Stefan Ried, principal analyst of platform strategies at Forrester Research Inc., says putting Dynamics ERP on Azure is the “prerequisite to get the ecosystem of third-party vendors into a meaningful momentum,” adding that having business logic and applications on the same platform would help corporate developers “extend business logic in a modern way.”

Microsoft has been lagging behind other vendors, Ried says, and with this announcement, seems to be catching up.

He warns, however, that potential customers should look carefully at what level of cloud integration Microsoft will be providing. “Is it really technically running on Azure, on the same Azure where they can put third-part apps? Or is it just a marketing Azure where they call it the hosting environment of Dynamics … and it’s technically a different environment? That needs to be investigated.”
At last year’s Convergence show, Microsoft first discussed intentions to port its four ERP lines to the Azure cloud platform with the next major release of each product. This will begin in fourth quarter of this year with the release of NAV 2013 and GP 2013, Microsoft said. A beta version of NAV 2013 will arrive in May.
Microsoft is also planning to discuss plans for ISV partners offering Azure-hosted services for verticals including retail, fashion and equipment manufacturing, according to a company statement.

Another announcement will concern the fourth-quarter release of AX 2012 R2, an update that will include new business intelligence capabilities geared towards the needs of individual users, Microsoft says.

In addition, Microsoft [Nasdaq: MSFT] will reaffirm its plans to move AX, which is aimed more at larger companies than the other Dynamics applications, to Azure. However, no firm timelines will be provided, says Fred Studer, general manager of Dynamics. Nor will Microsoft discuss when Dynamics SL, a product used by services companies, will end up on Azure, says Studer.

But the lack of information doesn’t mean Microsoft is going back on its plans, he adds. “We’re still committed to delivering all of our ERP on the cloud.”

Dynamics applications, whether run on-premises or hosted, historically have been sold directly through partners. That won’t change with Azure, Studer says. “The partner ecosystem is a critical component. They’ve already built relationships with our customers.”

Partners will be able to sell Azure-hosted Dynamics via subscription, a pricing model intrinsic to the SaaS world. But those details are still being ironed out, with no specifics coming until sometime after Convergence, Studer says. “As we go through the beta [for NAV], surely we’re going to learn how best to drive that. We want to make this as easy as possible.”

All Dynamics ERP products will continue to be available in on-premises form and through traditional hosting partners after the Azure launch. Microsoft expects there will still be a strong market for both scenarios, as well as hybrid deployments, Dynamics CTO Mike Ehrenberg previously told IDG News Service.

Ried says there is definite trend to moving ERP software to the cloud, but for big companies, cloud ERP will mostly serve to complement, not replace, their existing core systems. Its most important use is in business collaboration on a global scale, he says.

“You have for example, a headquarters running an SAP or Oracle ERP on premise and still continues to run that, but for example, uses Software-as-a-Service in the subsidiaries all over in different countries,” he says.

The very concept of ERP is being redefined through the adoption of SaaS, Ried says.
“If you call the traditional ERP your system of records, what is really the system of engagement with your customers, with your employees, with your business partners, your suppliers? Very likely that’s a newer system that’s much more collaborative.”
(With files from Brian Bloom, ComputerWorld Canada)

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