TruNorth’s CEO Wants To Make Microsoft Dynamics More Affordable, MSP Friendly
Wade Tyler Millward
‘One of the things we are actively working on is how do we move that price point down,’ says TruNorth Dynamics CEO Ole Gjerde.
If you ask Ole Gjerde what stands in the way of Microsoft Dynamics growth in the crowded field of business platforms and customer relationship management and enterprise resource planning software and its growth as a solution provider practice, he’ll point you to one thing in particular: pricing.
Gjerde told CRN in an interview he estimates that a small business faces a six-figure implementation cost and then high licensing fees, which for the Project Operations professional services offering runs at $120 a user a month for the first application.
“Most – what I call smaller to not-quite-mid-market, a larger small business – are not going to drop $200,000, particularly in the current market,” he said. “People are spending money, but everybody’s a little bit like, ‘OK, but what if the recession hits?’ One of the things we are actively working on is how do we move that price point down so people can afford to get into these products and then grow into them.”
TruNorth Dynamics Targets MSPs
CRN has reached out to Microsoft for comment.
Danny Perry, managing partner at Houston-based Microsoft partner ITCubed, has worked with TruNorth on several projects around prospective client discovery and blueprinting, he told CRN in an email.
“The TruNorth team is knowledgeable and professional and have helped us help our clients move their decision-making processes forward expeditiously,” Perry said.
The Dynamics Pitch
As a partner for solution providers looking to start or boost a Dynamics practice, Gjerde and his team of about 35 employees at Castle Rock, Colo.-based TruNorth hope to bring down the cost of Microsoft’s CRM and ERP offering and help Microsoft solution providers get more partner program rewards from the vendor, he told CRN.
To fix the pricing dilemma, he wants to see Microsoft offer smaller, less expensive packages and license types for Dynamics akin to the small business-minded plans it launched for Microsoft 365. Today, M365 Business Basic is available for $6 a user a month and Business Standard costs $12.50 a user a month, according to Microsoft.
“That’s going to be the key to get into the larger small business and into even the lower end of midmarket,” Gjerde said. “Because that market is ginormous. In fact, it’s easily the biggest market.”
For Microsoft solution providers, a Dynamics practice puts them on track to a “solutions partner for business applications” designation under the new Microsoft AI Cloud Partner Program (MACPP). Benefits for designations include cloud licenses, Azure credits, internal use rights (IURs), go-to-market (GTM) services, technical support and pre-sales services.
“Dynamics has amazing extra kickers on the back end, so they (solution providers) can make probably close to 30 percent (margin) on Dynamics licensing,” he said.
Solution providers should make Dynamics part of the conversation with clients because “what the client does around their business applications, business operations, directly affects the MSP,” Gjerde said. Plus, a client interested in Dynamics may decide to ditch a solution provider altogether for a partner with the services already in use and Dynamics.
Even distributors see Dynamics’ potential, with Pax8 notably acquiring Microsoft Dynamics services company Bam Boom Cloud this year.
Dynamics is a fit for a variety of customer sizes and industries, including manufacturing, health care, supply chain and field service work. It’s also a step to bringing in artificial intelligence (AI) to automate processes, Gjerde said.
Although Gjerde is excited for Microsoft’s investments in generative AI (GenAI), he doesn’t see the technology meaningfully contributing to his revenue until next year.
“The market as a whole is going to come in that second phase, which is probably going to be in 2024,” he said. “So I see this as just great planning for the future.”
In September, Microsoft releases a slew of new GenAI capabilities for Dynamics 365 using its Copilot tool. Those capabilities include using Copilot to create emails, edit and rewrite text, create audience segments and build forms and event registration pages that match brand guidelines in minutes, according to the vendor.
How Gjerde wants to make Dynamics implementation easier and cost effective is through productization and phases so that clients can budget over time. Dynamics needs the channel to bring its capabilities to Main Street and not just the largest enterprises, he said.
For solution providers, TruNorth can act as a partner right alongside the company or take a support role.
“Now they have options,” he said. “So it creates a much better entry point into this market. … They could get into these real business applications that can allow those clients to actually grow, and they’ll be there for the long term.”
Microsoft Dynamics Growth
An August midyear 2023 survey of chief information officers by investment bank KeyBanc showed Microsoft as the top strategic software-as-a-service vendor followed by CRM rival Salesforce.
Half of respondents said they expect to increase budgeted spend with Microsoft over the next 12 months, 8 percent reported decreased spend and 42 percent said no change, according to KeyBanc.
Respondents returned Microsoft to the top of finance or back-office applications vendors CIOs plan to start new projects with in 2023, ahead of Workday, Oracle and SAP – Oracle had trumped Microsoft in the prior survey.
The firm’s second quarter IT reseller and channel partners survey from July showed Dynamics at the lower end of Microsoft offerings likely to receive increased spending – ahead of data warehouse and data lake products but behind on-premises database products, Power Platform and GitHub and Azure DevOps.
On Microsoft’s most recent quarterly earnings call, CEO Satya Nadella said that Dynamics surpassed $5 billion in revenue for the most recent fiscal year. Customer experience, service, and finance and supply chain businesses all surpassing $1 billion in annual sales.
Chief Financial Officer Amy Hood said that during the quarter, Dynamics revenue grew 21 percent year over year ignoring foreign exchange. Dynamics 365 grew 28 percent “with continued healthy growth across all workloads.”
For the current quarter, Hood expects Dynamics “revenue growth in the mid to high-teens driven by continued growth in Dynamics 365,” she said.