Ballmer Outlines Dynamics Roadmap, Hints At ERP SaaS Plans


Over the next several months Microsoft is rolling out an on-demand version of its Dynamics CRM software, Dynamics CRM Live, which can be hosted by Microsoft or its channel partners. Microsoft watchers have long speculated about whether the company would expand its software-as-a-service initiative, which Microsoft calls "Software + Services," to its Dynamics ERP applications.

Such a move would have broad implications for Microsoft channel partners because on-demand ERP applications available directly from Microsoft could be seen as competing with the channel, particularly with channel partners who resell and implement traditional on-premise apps. But it could also offer expanded opportunities for solution providers that focus more on providing customers with services and vertical industry expertise around Dynamics applications.

Microsoft has taken a wait-and-see approach to software-as-a-service ERP, indicating that its experience with Dynamics CRM Live would provide some guidance. While not outright announcing plans for software-as-a-service versions of Microsoft's Dynamics AX, GP, NAV and SL ERP applications, Ballmer indicated the company might be moving in that direction.

After announcing that Dynamics CRM Live will be available throughout the U.S. and Canada by June, Ballmer said: "It's not the only service that we plan for Dynamics in the software-as-a-service space. You should expect more from us in ERP and other areas as we move into the future."

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At least part of what Ballmer was referring to was technology Microsoft announced here at Convergence for Dynamics ERP and CRM applications that businesses could use to integrate those applications with outside services such as eBay, PayPal, and Chase Paymentech Solutions.

Ballmer said the purpose of software-as-a-service is to help businesses bring together the four models of computing that are prevalent today: enterprise server, Web, desktop and mobile computing. "You see that particularly with what we are doing today with Dynamics CRM, but you'll also see that across our ERP [applications] and other product sets."

In an interview after the keynote, Jon Pratt, Microsoft Dynamics senior director, said Microsoft's position on software-as-a-service ERP applications hasn't changed and there are no development efforts underway. He pointed to the services for linking Dynamics applications with outside services like eBay as indicative of Microsoft's direction.

But Pratt admitted that during Ballmer's keynote someone sitting next to Pratt turned to him and asked if Ballmer had just announced software-as-a-service Dynamics ERP.

Between 150 and 200 solution providers already host Dynamics CRM and ERP applications for their customers under the Service Provider Licensing Agreement that Microsoft modified in 2006 to allow for partner-hosted Microsoft products.

Ballmer said Software + Services offers customers more deployment options to help them manage risk, costs and IT resources while providing them with more opportunities for competitive differentiation and time-to-market advantages.

Microsoft also once considered merging Dynamics AX, GP, NAV and SL into one application set under an effort known as Project Green. But the company backed off that idea in 2005, opting instead to build common functionality across the four product lines over time.

Wednesday Ballmer said that's still the plan. "We have a long-term view for every one of these products," he said, admitting that he frequently gets questions from customers and channel partners about Microsoft's commitment to all four product lines. "They will all continue to be enhanced well, well, well -- for many, many years -- into the future," Ballmer said.

That was echoed in an afternoon keynote speech by Kirill Tatarinov, corporate vice president of Microsoft Business Solutions, who has overall responsibility for the Dynamics applications. "We are committed to the entire Dynamics portfolio," he said. "We will continue to innovate on all our Dynamics ERP and CRM products."

Microsoft's goal is to release a major upgrade of each Dynamics application approximately every 24 months, Tatarinov said. Dynamics AX 2009 is slated to ship by mid-year while Dynamics NAV 2009 will be available by the end of this year. Those will be followed in 2009 and 2010 by new releases of Dynamics Point of Sale (POS), GP and SL. Microsoft just began shipping Dynamics CRM 4.0 in December and the next release of that product is due in 2010.