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Early Azure proof point: boost for Dynamics ERP
Warren Wilson
Early Azure proof point: boost for Dynamics ERP
When Microsoft unveiled its Azure cloud computing platform at its recent Professional Developers Conference, much of the attention focused on technical capabilities that Microsoft hopes will make Azure a credible contender against earlier cloud entrants such as Google, IBM, Amazon and salesforce.com. However, this isn't the only measure of Azure's success. Equally important is how well it performs as a cog in the bigger Microsoft machine, both by enhancing specific products and by advancing corporate strategy. In one of the first indications of how Microsoft intends to use Azure, it does both. The company announced that Azure is the foundation for a set of cloud-based services that extend its Dynamics line of enterprise resource planning applications. The new Azure-based ERP extensions also provide a proof point for Microsoft's hybrid Software + Services strategy in the enterprise applications market.Using Azure to boost Dynamics ERP
The Dynamics family of enterprise applications - four ERP and one CRM - is a billion-dollar business, but that's small potatoes at Microsoft, with its stable of cash cows including Windows, Office and the Server and Tools division. But enterprise applications are a market that Microsoft is cultivating carefully. The small and medium-sized business segment, where Microsoft draws much of its strength, is growing quickly but is relatively underpenetrated by ERP, so it presents a large greenfield opportunity. Microsoft believes that its solutions, while not as rich as some in industry-specific functionality, nonetheless offer compelling value in terms of simpler deployment, lower cost and greater ease of use. It was not surprising that one of Microsoft's first internal Azure moves was to enhance its ERP solutions.There are three new Azure-based extensions to Dynamics ERP: new services called Sites and Commerce, and enhancements to its existing Payment service.With the Sites service, users can extend their ERP applications with websites dedicated to specific purposes - for example, gathering customer feedback, getting quotes from business partners, product registration, or job recruiting.The new Commerce service links ERP products to otherwise separate e-commerce capabilities such as shopping carts or dedicated e-commerce storefronts, so that ERP customers can list products and accept orders from multiple sources through a single interface.The Payment service lets Dynamics ERP customers process payments across multiple channels, including e-commerce, point-of-sale systems and call centers. At present, the service works with the major credit cards, Visa, MasterCard and American Express, as well as PayPal and First Data Merchant Services. Additional payment services are expected to be available in the first quarter of 2010, while the Sites and Commerce services are scheduled to be available in the first half of 2010.Taken together, the new Azure-based ERP extensions should make it easier and quicker for companies to set up e-commerce sites and payment processing systems that are tightly integrated into their core business management systems, including financial management.Proof point for Software + Services
The Azure-based ERP extensions are also a textbook example of Microsoft's Software + Services strategy, an approach in which customers can blend on-premise applications and cloud-based services in flexible, hybrid solutions that they can adjust as needs change. Microsoft has employed the same strategy with its SharePoint collaboration tool, Exchange email server, Office desktop suite and Dynamics CRM offering, among others.Although it was criticized early on as simply software-as-a-service (SaaS) by a different name, Microsoft's Software + Services initiative is actually more ambitious. It aims to combine the best of the on-premise and cloud worlds, while attacking as fallacy the very point that SaaS proponents like salesforce.com say is their strongest: that the simplest solution, with nothing on-premise and everything in the cloud, is the strongest. Microsoft counters that many organizations simply aren't comfortable with the pure SaaS model, and may never be.Even before this argument is settled, Microsoft soon may have another fight on its hands - against a competitor far larger than salesforce.com. ERP leader SAP is also pursuing a hybrid solution model, in which customers can augment on-premise ERP solutions with cloud-based business intelligence capabilities. Rather than SaaS versus hybrid, the more interesting question over the coming months may well be which vendor can claim the best hybrid platform.
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