After much terrestrial dithering, Microsoft has at last elected to put its head in the clouds.
Such was the announcement delivered last week at Convergence 2011, a big-ass annual event in Atlanta where the Microsoft Dynamics customer and partner business communities share the rarified air of a common convention centre.
There, the host company gave voice to its plans to offer its Dynamics ERP solution in a Software-as-a-Service (SaaS) format. Accordingly, the next major releases of its Dynamics AX, GP, NAV and SL ERP products will be available on Windows Azure, Microsoft’s cloud-development platform that’s been available for a year.
It will debut its on-demand ERP application delivery program with its next version of Dynamics NAV 7, slated for release in 2012. The balance of the Dynamics lineup will presumably follow, and it could be several years before the lot has made its way to Azure.
Microsoft says it will deliver its ERP application via this method more cheaply than its competitors (NetSuite most prominent among them), thanks in part to a multi-tenancy architecture that will enable multiple users to share the same instance of an application. This approach is also attractive for the ease with which it can be upgraded.
Microsoft already offers Dynamics CRM as a cloud-carried product (it’s been available in the States since 2008; it went global in February). This latest move is actually a delayed response, on the company’s part, to a prevailing trend in the ERP market. Namely, solution providers to mid-market and SMB customers are increasingly reaching for the clouds.
Until this about-face, the company sold only on-premise versions of its flagship ERP products, and made no apology for the absence of a SaaS alternative. Indeed, it had sought to cover all bases with a so-called “software + services” ERP option. Through this, its channel partners invoked their service-provider license-agreement programs to independently deliver hosted versions of Dynamics ERP products to their customers.
With this announcement comes choice. Now, said Microsoft CEO Steve Ballmer in his keynote address at Convergence, customers will have the option of shifting their ERP application online, continuing to run it onsite or going with a hybrid deployment.
Microsoft’s cloud ERP announcement, however, as posted through the IDG news service last week, has received mixed reviews. Users question the level of savings this switch actually represents to them and the degree to which they’ll lose flexibility by adopting this delivery mode.
They also express concerns about the potential for downtime if the cloud experiences a system failure. And certainly there will always be heel-diggers who reject the notion of releasing responsibilities they’ve always adequately overseen in house to a third party.
But this new option, say its most vocal proponents, is a serious step in the right direction for Microsoft, late in the game though it may be. And it’s a particularly attractive one they point out, for those Dynamics customers already using a hosting service. Adding an ERP product to the mix should be seamless, they enthuse, and the payback fairly immediate.