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Microsoft Convergence 2013 Observations (From Afar)

Written By: Predrag Jakovljevic
Published On: April 10 2013

Microsoft Convergence 2013, which took place in mid-March 2013 in New Orleans, Louisiana, was reportedly the largest annual Convergence conference ever, with more than 11,000 attendees. Although I could not attend the multiday event in person, today’s collaborative technology marvels made it possible for me to follow it fairly closely even from a thousand miles away. Many of the conference messages I first heard at the Microsoft Dynamics’ Fall Analyst Event (FAE) back in November 2012, where the industry analysts and bloggers got conference peek previews (see blog here). Featuring high-profile customers, such as Chobani Inc., Habitat for Humanity International, Revlon Inc., Shock Doctor Inc., and Weight Watchers International Inc., the opening keynote by Microsoft Business Solutions president Kirill Tatarinov talked to how Microsoft Dynamics, as a unifying fabric, is "uniquely positioned in the market to serve as a catalyst to help businesses unite their organizations, unite their people and technology, and unite with their customers."

Continuing the momentum across the entire Microsoft Business Solutions portfolio, the company also announced that the Microsoft Dynamics CRM business now has more than 39,000 customers, with 3 million users benefitting from the customer relationship management (CRM) solution. Given the amenability of Microsoft Dynamics CRM and Microsoft Dynamics AX to large global enterprises, several new global independent software vendors (ISVs) are signing on to build vertical solutions on top of the Microsoft Dynamics ERP and CRM products (as platforms), including Cincom Systems, Acorn Systems Inc., Bull, Flintfox International Ltd., Dominion, and Hitachi Solutions Ltd. One may read about how Chobani and Habitat for Humanity are using Microsoft Dynamics CRM solutions. These stories as well as the transcript of the keynote can be found on the Convergence 2013 virtual press room here. Moreover, the keynote and the major general sessions on individual product lines can be viewed here. The complete Convergence 2013 press release is included here.

Conference Highlights

As part of this event, Microsoft Dynamics made some significant announcements that highlight new advancements in the following three key areas:

  1. Integrated marketing—The vendor announced a new version of the recently acquired MarketingPilot solution with a simpler and familiar look and feel (the acquisition took place around the FAE 2012 event, but Microsoft saved the major announcements for Convergence 2013). Microsoft Dynamics is also releasing a new MarketingPilot Connector that will enable MarketingPilot 15 to work seamlessly with Microsoft Dynamics CRM (but it is not fully integrated within Dynamics CRM, most likely for the reasons of selling it as a standalone cloud solution as well). The MarketingPilot platform builds off of its marketing resource management (MRM) core, but extends into strong campaign execution, lead scoring, and Web analytics. A component of the solution, Akela Marketing Cloud is a multitenant behavioral tracking and progressive engagement modeling engine for marketers that can be used to mine clickstreams, page flow, and online/social behaviors. Microsoft will use that engine, and combine it with some upcoming work it is doing in social analytics for gaining new marketing, sales, and customer service insights. More information on this topic can be found here.

  2. Embedded social capabilities—Microsoft Dynamics announced an initiative to embed social monitoring capabilities across its Microsoft Dynamics CRM offerings. This initiative has been accelerated with the acquisition of Netbreeze, a Swiss company that delivers a number of capabilities including sophisticated native language processing (NLP), data mining, and semantic text analysis to support 28 different writing systems, and the top analytics science talent in the field. This acquisition seems to counteract the similar moves by salesforce.com (Radian6) and Oracle (RightNow and Collective Intelligence). A blog post providing more details of this acquisition and Microsoft’s social strategy can be found here. Multiple canvases of customer engagement (community, widgets, forms, apps, etc.) are all interesting areas for Microsoft Dynamics, while the vendor is still only watching the social advertising space. The vendor is not yet convinced that today’s social ads solutions are helping brands maximize engagement and drive return on investment. The market has to shift to what works versus yet another activity—which currently typically means lots of custom projects with little to show for in terms of revenues. What caught my attention was that there was not much talk about about Yammer integration with Microsoft Dynamics CRM (although there was a well-attended breakout session about using integrated Yammer and Office365 in the cloud). The important customer service capability is being filled via a partnership with Moxie Software.

  3. New cloud and mobile scenarios enabled through Microsoft Dynamics solutions—The vendor announced a new set of mobile applications for phones and tablets that will provide people a more relevant experience based on what they do and the device they use. These apps include Expense management, Time Entry, and Approvals, and will be available for Windows 8/RT, Windows Phone 8, Android phones, and iOS phone devices. A blog post detailing these applications can be found at the Inside Microsoft Dynamics AX blog here. This was the rare mention of Windows 8, which was conspicuously absent from this large event.


True Cloud ERP?

Additionally, Microsoft announced that Microsoft Dynamics GP 2013 and Microsoft Dynamics NAV 2013 will be delivered in the cloud through partners hosted on Windows Azure in June 2013. Partners will be able to host GP and NAV in the cloud on Windows Azure Infrastructure Services. This does not mean that Microsoft is offering NAV and GP directly to customers as an enterprise resource planning (ERP) service on Azure Cloud. Microsoft believes strongly in the industry and regional know-how its partners can bring to every implementation of GP and NAV.  The announcement is about not only creating even more choice for how and where Microsoft Dynamics customers can deploy their small to medium business (SMB) solutions, but also helping Microsoft’s customers and partners benefit from the huge investment the company is making in Windows Azure.

This indicates that Microsoft Dynamics ERP is not yet a true multitenant cloud offering. It appears that its vast on-premises install ERP base with heavy customizations and diverse legacy technologies is holding Microsoft Dynamics from taking the public multitenant cloud ERP plunge. This “partner-led hosting” mantra is no different than what it has been talked about by Microsoft Dynamics for the past two years. True cloud vendors such as NetSuite, Plex Online, and Acumatica will likely make some noise and FUD (fear, uncertainty, doubt) about whether additional tools such as some terminal server or virtual desktop will still be required for Microsoft Dynamics hosted customers. Terminal server/Citrix are no longer required, as both 2013 releases of Dynamics GP and Dynamics NAV have web clients, but then would this still be a “true cloud” (public and multitenant)? Microsoft counters that this move will provide customers with convenience, completeness, lower costs, and rapid deployments.

Blessing and Curse of Tier-one ERP Solution

The major theme of Convergence 2013 was that Microsoft Dynamics CRM and Microsoft Dynamics AX are now truly global tier-one (or close to) solutions for big partners (and even its own Microsoft Consulting). Revlon was featured on stage as a case study where the company is replacing 21 diverse ERP solutions with Dynamics AX. This is impressive indeed, and not something that one would often hear from Microsoft Dynamics in the past.

But these enterprise-class capabilities come as a double-edge sword—Microsoft Dynamics AX 2012 is a much bigger system than the earlier versions, with big differences in the data model. Thus, more or less all customizations must be rewritten during an upgrade or migration. AX is Microsoft Dynamics’ enterprise ERP play without a doubt—the company has invested major resources for product development, direct sales, and consulting/implementation of AX. Partners have to be sizeable to be involved with AX to any degree. In addition, customizations and all the plumbing underneath (SQL Server Analysis Services [SSAS], SharePoint, Excel in-memory cubes, etc., integrations to whatever) have all found a way to be more complex, and hence way more expensive.

This shows that taking on SAP or Oracle sounds good and tempting, but it will not be easy. Few big consulting partners can invest in multiple ERP business units unless we are talking about a guarantee of lengthy and lucrative contracts. The Microsoft Consulting group is still largely infrastructure-oriented rather than tier-one ERP and CRM oriented. Only time will tell how this large enterprise systems competition will unfold.

Recommended Reading

Beagle Research Group
Microsoft Convergence 2013 and Marketing. March 25, 2013.

Brian Vellmure
Learning from New Orleans: Microsoft’s Opportunity for the Future. March 22, 2013.

Constellation Research
Event Report: Microsoft Dynamics Convergence 2013. March 19, 2013.
Microsoft Dynamics Move Up-Market: What’s Missing? March 27, 2013.

Technology Evaluation Centers
Microsoft Analyst Event Part Two: Dynamics Offerings for ERP and CRM. December 17, 2012.

THINKJAR
Two Things from Convergence 2013: CMOs Ain’t Rich, MSDynCRM Is Getting There. March 21, 2013.
 
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