Home Microsoft Dynamics AX 2012 Dips Its Toes In the Cloud, Carefully

Microsoft Dynamics AX 2012 Dips Its Toes In the Cloud, Carefully

There is a strong feeling in the air that cloud-based enterprise apps are no longer the “challengers.” The sheer breadth of activity surrounding last week’s Dreamforce conference in San Francisco was a clear indicator that SaaS applications had evolved into complete ecosystems, with strong support from third-party developers and strong distribution from plentiful partners.

So the word “cloud” had better figure into any response to last week’s juggernaut from Microsoft. With this morning’s release of Microsoft Dynamics AX 2012, the company’s long-standing enterprise resource planning suite, the company is rolling out a new set of Windows Azure-based services that are leveraged on top of local deployments. The newest of these services is a deployment assistance tool called RapidStart that gives new customers a wizard-like questionnaire system for configuring Dynamics AX.

“RapidStart is a very simplified tool that’s a cloud-based, Azure service, but with a very simple question-and-answer format that helps a customer and/or a partner very quickly configure and implement an ERP system of AX 2012,” Fred Studer, ERP business general manager for Microsoft, tells RWW in an interview.

Leveraging cloud services on the existing platform

In the enterprise software space today, Microsoft is certainly a player, but no longer with the de facto dominance the mere mention of the brand once entailed. In a crowded ERP field where the top twenty competitors may be skimmed from the top of the field, where that list still includes SAP and Oracle, and where cloud-based NetSuite is riding the same wave to success as Salesforce in the CRM space, Microsoft’s market share is probably no better than one-third. The alternatives are numerous, so even Dynamics’ own evangelists are advising Microsoft to make the transition to the new version easy.

“Upgrading to AX 2012 is not something you do overnight. It’s gonna be a project on its own, requiring resources from both IT and the business.” writes Willy, the proprietor of the independent Dynamics AX 2012 Live blog (and apparently the official caretaker of the verb “gonna”). “It’s gonna take time. And time is money. AX customers willing to upgrade gonna have to convince higher management it’s a good investment.”

“There’s a new way for people to consume technology,” began Fred Studer’s response to our question on how Dynamics AX intends to distinguish itself as superior to cloud-based alternatives like NetSuite. “We’ve been in the cloud with e-mail for 15 years. BPOS [Business Productivity Online Suite] for the last three-and-a-half years. CRM for really the last year-and-a-half. And now ERP. That’s just one piece, I think, of how people will start to change the consumption. Really, it’s about how they want to maintain it, how quickly they want to take on a new version and they don’t want to worry about upgrades. The cloud is a really good way to do it.”

Expediting and easing the deployment process, Studer explains, is the best way for Microsoft to use the cloud to improve their customers’ “time-to-value.” That said, RapidStart will eventually have an on-premise version, followed by a hybrid version that includes components from the cloud-based and on-premise software sets. Cloud-based storefronts, team collaboration tools, and payment services have already been part of the Dynamics AX toolset, and those components will be given upgrades for the 2012 edition.

Leveraging the existing platform on another existing platform

Microsoft’s marketing strategy for software has always been to leverage extended functionality from the strengths of an existing core product. While Dynamics AX 2012 could present an opportunity to leverage Azure, the company is instead continuing with its strategy to leverage Office. Specifically, Dynamics will continue to present much of its functionality inside Office components – for example, customer contacts data within Outlook, resource inventory tools within Excel, cost projection reports within Word, and the like.

“Being a former Office guy, I can tell you we spent a lot of time getting the market trend to adopt Microsoft Office 2007, and then Office 2010,” says Studer. To that end, he says, Dynamics AX 2012 will now make full utilization of the Ribbon tool introduced in Office 2007. “So the configuration and integration of Office is much more tight than [Dynamics AX] 2009.”

Point-of-presence and messaging tools from Lync will be embedded as well. From within what Dynamics AX now calls role centers, Lync can provide contact buttons for seeing the location and availability of a contact, and making direct contact with him (similar to the functionality Lync provides to Outlook). Role centers are customized consoles with functionality that pertains either to the user’s specific line of work or industry, or the level of responsibility he holds within the organization.

Pre-release documentation for AX 2012 describes the current incarnation of role centers this way: “Role Centers provide an overview of information that pertains to a user’s job function in the business or organization. This information includes transaction data, alerts, links, and common tasks that are associated with the user’s role in the company. Role Centers also include reports that are generated by SQL Server Reporting Services or SQL Server Analysis Services. Microsoft Dynamics AX 2012 includes more than two dozen predefined Role Centers, which users can access from Enterprise Portal or the Microsoft Dynamics AX client.”

Microsoft has used “role-tailored” functionality since Dynamics NAV in 2007, and began implementing the three-tier role center application model with AX 2009.

An old-style competitive move

Taking direct aim at just one of its competitors in the ERP space, Microsoft announced today it will give customers of Lawson ERP a 50% discount on new Dynamics AX 2012 licenses. Lawson’s market share overall may not climb into the Top 20, though it claims a share in certain vertical markets, such as healthcare, of as high as one-third.

“We specifically targeted [Lawson] because we had a lot of their customers call us, and partners who were previously building businesses on Lawson, with interest around AX 2012,” says Microsoft’s Studer, “because they’re lacking the confidence of the roadmap, they don’t know what the investment strategy is, and they don’t feel they’re going to get a modern ERP any time soon.” In addition, partners will be given a $10,000 revenue credit for every existing Lawson consultant they switch over to AX 2012.

“We wanted our system to be adaptable, to run the way the customer wants to run, and not force customers – like many of our competitors – to run the way the software has to have them run,” he adds. “It’s not electronic concrete any more. So if our customers want to change the business organization, or get into a new geography, or invest in or acquire another business, the software provides that flexibility for them to be able to do that the way they want it, and provide that capability to everybody in that organization.”

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