Convergence: Cloud ERP wars as Microsoft takes the fight to NetSuite and SAP
March 20, 2012
It’s not that long – in IT industry terms – since Microsoft wasn’t all that keen on talking about Cloud Computing in front of its channel partners in case their concern about potential disintermediation took vocal effectt.
But that was then and this is now – and with Microsoft now full-square behind the Cloud, this year’s Convergence gathering saw no such reticence from Kirill Tatarinov, President, Microsoft Business Solutions as he announced upgrades to the firm’s Cloud CRM offering and the fulfilment of a commitment to move ERP alongside it…
He added:
“The world of business solutions as it relates to Cloud is notoriously complex. And as we’ve worked with many hundreds and thousands of customers around the world to understand what their needs are that are relate to the Cloud, we’re finding that most people really want to see mixed scenarios, and mixed workloads. The traditional world of business applications has been filled with solutions that are enormously hard to implement, almost impossible to customise, and, as a result, requiring significant investment not only to get going, but also to continue to maintain. ”
In contrast, he insisted, the Microsoft approach is based upon a different perspective:
“ It’s the simplicity, making sure that we truly deliver solutions, that is intuitive, that your people love, that your people would want to use, that you really have business solutions for everybody in your organisation, not just the small domain of very deep experts who spend time in attempting to master the tool.”
Microsoft Dynamics CRM is of course already available as a Cloud offering and battling against Salesforce.com in accounts worldwide. The next service update, confirmed Tatarinov, will be available in Q4 calendar year 2012, delivering capabilities in social customer care and Cloud-based data enrichment service. Tatarinov stated:
“ Obviously Dynamics CRM Online has been a poster child of what business solutions in the Cloud ought to be. We’re seeing tremendous traction, and we’re seeing that product really is taking the market by storm and gaining market share quite phenomenally. Later this year we will update Dynamics CRM online again. And with that full update we will provide capabilities for social interaction and customer care scenarios. So, people can truly engage their customers through familiar social networking tools. And that’s essentially another very important part and step in our journey. ”
But that journey is no longer just focused on CRM apps, but also ERP, a increasingly febrile area of the market with established competition from the likes of NetSuite, emerging competition from the likes of SAP with Business ByDesign and the arrival of newcomers such as Workday. Clearly Microsoft needs to compete here.
To that end, Tatarinov confirmed that both Microsoft Dynamics NAV 2013 and Microsoft Dynamics GP 2013 will be Cloud-enabled for Windows Azure, optimised for small and midsize enterprises (SME), and generally available in Q4 of calendar year 2012.
The beta release for Microsoft Dynamics NAV 2013 is expected in May 2012. In addition, the company reiterated its commitment that the next major release of Microsoft Dynamics AX will evolve as an enterprise Cloud service offering from Microsoft and remain flexible in its deployment model as a competitive differentiator, stated Tatarinov.
“ As it relates to financial workloads, and business planning workloads, and some of the operational management workloads, we see that people want to run some of those workloads in private Clouds, others in public Cloud, others just in traditional on premises deployments. And that’s precisely where we’re uniquely positioned to deliver. ”
Which means?
“ We deliver Cloud on your terms. So, you can take full advantage of elasticity, you can take full advantage of scale and at the same time, you maintain control, and you stay in power of the solution. You’re able to do it exactly the way you want it, exactly the way your users want it. We don’t force things on you. That’s why "do not get forced" has been one of the most important messages that we’ve been articulating to the marketplace as it relates to Cloud and as it relates to Cloud-based deployment. ”
So what are the prospects for success for Microsoft in a sector where NetSuite has been diligently working for over ten years and into which SAP is pumping a lot of resource? Even Salesforce.com is dipping its toes into the ERP space with its acquisition of HCM and performance management firm Rypple. Angela Eager of research firm TechMarketView argues:
“ There is still a journey ahead but Microsoft is coming closer to delivering ERP in the Cloud. This will substantially raise the number of Cloud-based ERP systems available in the market as a whole but although beta versions of NAV and GP are expected over the next few months, general availability is still a way off. ”
Microsoft’s view of the Cloud space is impacted by historical legacy, adds Eager:
“ It is heavily committing to Cloud services but Microsoft is still tethered to the on premise environment and is backing hybrid solutions as the deployment model of most frequent choice. That says as much about its traditional on premise business model as it does about Cloud adoption trends of course, and its planned Azure-delivered ERP solutions will still need a lot of Microsoft kit to get the best from them. ”
This is a familiar meme, she notes:
“ Cloud-based Dynamics CRM has also been castigated for heavy dependency on other Microsoft technologies. It would be easy to say that Microsoft is using the cloud as a sales vehicle for the rest of its portfolio. To view it just that way would be a disservice, even though its approach does effectively lock customers to its technology stack. As Cloud applications become more mission critical and the levels of connectivity expand almost exponentially, the need for a central source of access identity control and management is becoming more vital but the market is light on end-to-end tools. ”
Eager concludes that a change of tack may be appropriate – and beyond the Microsoft corporate walls:
“ There is little incentive for Cloud application providers to build technology agnostic Cloud application and toolset stacks. But maybe that is what is needed alongside the applications to promote Cloud-based ERP, which is a laggard in terms of Cloud adoption. ”