Microsoft Dynamics: ERP as a Platform

As ERP becomes more and more of a commodity, vendors are faced with the challenge of delivering an affordable core offering by delivering just the right mix of “standard” back-office capabilities and the vertical-specific capabilities demanded by the customers they serve. In light of this reality, some vendors have positioned themselves as best-of-breed ERP vendors that serve certain key verticals or microverticals by delivering comprehensive solutions to meet the specific needs of their clients; while other vendors pitch an ERP "platform," allowing partners or clients to fill in the industry-specific needs.  In any event, both cases demonstrate the increased maturity level of buyers of enterprise software.Along these lines, I was speaking the other day to the folks at TAB-US, which has a long history with the Microsoft NAV (Navision) product line, about their relationship with Microsoft and its current strategy for Dynamic NAV partners. 

What came out of my conversation is that Microsoft is really taking a close look at its massive partner community to position its channels as trusted advisors based on their past history. In response to this strategy, partners that are committed to the Microsoft Dynamics line are targeting and marketing to a variety of verticals and microverticals (e.g., TAB is focusing on the rental management space) that would not be traditionally viewed as being served by the Microsoft Dynamics product line.

ERP giant Microsoft believes that the only way it can deliver capabilities to compete with the multitude of vendors attacking the thousands of vertical and microverticals around the globe, is to focus on key industry sectors to strengthen their core ERP offering, and to allow its ecosystem of partners to serve those vertical and microvertical demands. 

In the case of the Dynamics NAV product line, Microsoft has selected the following industries to build solid horizontal functionality: manufacturing, retail, distribution, professional services, and public sector. In addition to its ERP core, Microsoft’s strategy is focused on what it terms a “RoleTailored” developer experience, to arm value-added resellers (VARs) and independent software vendors (ISVs) with a comprehensive toolbox to effectively build out the verticals and microverticals they are targeting.

From a business perspective, Microsoft is seriously evaluating its partners to ensure that they are focused and positioned in the areas in which each particular VAR or ISV has the reputation of excelling. 

Although it is true that Microsoft is heavily investing in positioning its partners that have developed strong vertical expertise, buyers still need to conduct their own due diligence to ensure that the solution providers they engage have solid experience in the ERP platform in question. 

With that in mind, a Microsoft partner that has been representing Dynamics NAV back when it was Navision is something Microsoft itself may not officially highlight, but it's a detail that should probably be considered by today’s buyers.  In general, Microsoft partners who have a past history with the Dynamics NAV solution prior to the acquisition have a higher caliber of product expertise than many competitors which have built their channel primarily on a “pay to play” business model. Even so, the typical buyer of ERP may not be aware of Navision’s history demanding that its own channel (pre-Microsoft) meet its strict requirements!
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