With the recent release of Microsoft Dynamics 365, the Dynamics world is abuzz with predictions, expectations and speculations. While Dynamics 365 was officially launched on November 1, 2016, there are still many questions about what this new Dynamics solution means for customers and partners.
We decided to get some answers from our seasoned experts at Catapult. Their experience runs the gamut and so do their first impressions of the new Microsoft Dynamics 365 platform.
The Expert Line-up:
- Jeff Bacon: VP of Business Development
- Blair Hurlbut: ERP Practice Lead
- Monica Heir: CRM Application Consultant
- Jeff Landeen: Senior NAV Specialist
So, what does this elite team think about Dynamics 365 and why should you care? Read on to find out!
Q1. What is Microsoft Dynamics 365?
Jeff Bacon: This is Microsoft’s first attempt to have business apps embedded in their Cloud Services or “365” offering. We’ve seen Office 365 and CRM Online work in this platform for the last year and half. Now with Dynamics 365 you can get business applications that support specific functions, whether that is Finance, Sales, Service or Marketing. Now you can snap in and subscribe to these different feature sets.
Dynamics 365 is not just ERP or CRM. I think it is actually different. It is an ability for organizations to pull away from the notion, “I need to buy an ERP or CRM system”. It kind of democratizes and unhinges capabilities from their traditional packaging, and says I need a service vs. a whole platform with things I might not. So I think it changes the world a bit and the way we think about business applications and those acronyms (e.g. ERP and CRM).
Blair Hurlbut: From my perspective, Microsoft Dynamics 365 is not Dynamics NAV. However, with the new common data model, CRM, a form of ERP, as well as many other tools, the Dynamics 365 umbrella is now expanding. Having said that, Dynamics NAV on-premise is not going away. There are two type of Dynamics 365. The Enterprise Edition, which is Dynamics AX online, and the Business Edition, which is Dynamics NAV online – but these are only backend distinctions in terms of the platforms 365 was built on.
Now that Dynamics 365 is released, the Business Edition will no longer be Dynamics NAV online as it will go in its own direction, separate from NAV because ISVs and Microsoft Dynamics Partners will publish add-ons, which completely changes the way each instance of Dynamics NAV functions. I think in the long-term Dynamics NAV will eventually turn into Microsoft Dynamics 365, but it has such a large on-premise install base that I am not sure how Microsoft will get all these customers online long-term. I mean, this is just the first cut of the solution, Dynamics 365. Dynamics 365 doesn’t and won’t have the functionality available to cater to distributors or manufacturers in the short-term. So at this point Dynamics NAV on-premise isn’t going anywhere.
Monica Heir: Microsoft Dynamics 365 is like Christmas for us! Microsoft Dynamics 365 is really a single data model or as Microsoft calls it, the ‘common data model’. What I like about Dynamics 365 is that it is not just Dynamics CRM. It is not just Dynamics NAV or Dynamics AX. I can’t help looking at it through a CRM lens. Clients don’t think like that. They don’t think in terms of databases. They don’t know that systems are disparate and you need a separate system to do this or that. From a customer point of view, Dynamics 365 is process centric. Our clients think, what is my end-to-end process and what do I need to turn on to accomplish that process, rather than database by database.
Dynamics 365 is more of a customer solution and more of an end-to-end solution. From a technology perspective, we get hung up on the fact that it is still separate databases on the backend, that those silos still exist. We still have to rely on the ‘common data model’ to get the information out of all of the systems. Basically, Dynamics 365 is a customer offering from the customer’s point of view. We are leading with the business first, instead of any kind of technology, which I love.
Jeff Landeen: Dynamics 365 is basically a ready-to-go cloud version of Microsoft Dynamics NAV. It is for any customer that needs financials in addition to their CRM system. Basically for anyone who isn’t manufacturing; it is available and ready to go. Microsoft’s claim for Dynamics 365 is “5-minutes to WOW”.
Realistically, Dynamics 365 aligns with the shifting expectations in cloud technology. It was essential for Microsoft to productize their service offerings with customer processes (e.g. sales invoicing). Opposite to an on-premise full Microsoft Dynamics NAV implementation, in which we are implementing general ledger, sales, customer service, etc.
Honestly, some customers only have one problem (e.g. sales invoicing). Dynamics 365 allows customers to address their isolated issue and move on, rather than having to implement an entire system to solve a single problem, with a ton of extra functionality/modules they may never use. Plus, Dynamics 365 is installed with the dead simple wizards, to click next, next, next and you are running within 5 minutes.
Dynamics 365 hooks into Dynamics CRM, so it is more than just ERP, but from a technology perspective it is still separate databases and pieces of technology. Additionally, there are two flavors of Dynamics 365. One is Enterprise, which better equates to Dynamics AX. The other is Business, which better equates to Dynamics NAV.
Q2: What does this mean for Microsoft Dynamics customers?
Jeff Bacon: I don’t see a significant change for our CRM clients, as 90% of our Microsoft Dynamics CRM clients are in the cloud already. So in that case, I think it is just a change in licensing for those clients and the way it applies to them.
For new clients, we need to start thinking about the services we provide. By that I mean implementation services. Basically, how we get them to subscribe to services is quite different from a Dynamics CRM perspective.
From a Dynamics NAV perspective, I don’t expect on-premise customer to migrate. Smaller clients might migrate this platform, but most of our clients would likely migrate online to a Dynamics NAV implementation with Microsoft Azure.
I personally think net new customers would benefit more than existing clients. It is really a different conversation from an ERP perspective, because with Dynamics 365 we would say you need finance plus some Office tools rather than a full blown ERP system.
Blair Hurlbut: For existing Microsoft Dynamics customers, if they are a little smaller in size and want to get rid of maintaining an existing infrastructure (e.g. on-premise servers), Dynamics 365 is the solution to buy.
From a licensing perspective, Dynamics 365 can be cheaper. You don’t have to set-up, maintain or replace server(s). Dynamics 365 will be upgraded and have releases automatically pushed to the solution. Dynamics 365 is easy for small businesses that don’t have an infrastructure team or tons of customizations.
As for existing Dynamics NAV customers, I don’t know if Dynamics 365 is at a point to compete with Dynamics NAV (on-premise or on Microsoft Azure). I see it as more of a competitor to NetSuite and Quickbooks.
Microsoft says: “you can sign up in under 5 seconds and it will WOW you in 5 minutes”. Most ERPs, when we are talking large scale ERPs like SAP and Oracle, that is not how someone goes about selecting an ERP system. It seems that Dynamics 365 is focused on attracting entrepreneurs or start-ups that want the wizard like set-up, just like a Quickbooks. There are new tools that are actually available with Dynamics 365 to migrate your data off Quickbooks and into Dynamics 365 very easily.
On a different note, that doesn’t mean that Microsoft is ignoring the Dynamics NAV on-premise buyer. They want them to migrate Dynamics NAV on-premise users to Dynamics 365 too. At this time, they are offering 50% subscription fees, for a limited time, to move from Dynamics NAV to Dynamics 365, which is a pretty significant cost savings [check with your certified Microsoft Dynamics Partner for current pricing].
Monica Heir: With Microsoft Dynamics 365, I believe we are leading with the customer with this technology, which is a refreshing change. What that means for the backend technology really isn’t much different, but that doesn’t concern the customer. As a customer, they are now receiving an end-to-end processing solution.
I am always customer first and the business first. Businesses don’t say: “what is my CRM database?”. So with this solution Microsoft is now speaking the customer’s language – with a single, predictable monthly fee where you turn on only the services you need. What hasn’t changed is that the onus is really on the Microsoft Dynamics Partner to implement and integrate it throughout the customer’s entire environment.
Previously, we didn’t have a “common data model”. We now have more of a foundation to start with. An out-of-the-box model, different licensing and pricing. One of the key benefits I see for the client is that it is less cost to integrate certain solutions with Dynamics 365.
Jeff Landeen: Microsoft Dynamics 365 is really approaching a different market of customers for Microsoft. It is now making enterprise and mid-market software solutions available for smaller businesses with affordable pricing. It is now a single, predictable expense rather than a lump sum, upfront capital cost. Essentially, Microsoft is working to broaden their base of customers with this offering.
Q3: What excites you most about Dynamics 365?
Jeff Bacon: Dynamics 365 definitely changes the way we go-to-market. It requires us, as a service company, to change the way we approach this. This solution is far more plug n’ play and transactional, versus, what do you need and we will create that for you. It presents opportunities for us to be more efficient.
I think about the economics a little differently as well as the sales process, which is exciting. You can integrate and snap in other services and bubble that up into an Office 365 or business dashboard environment, which has been really hard to do in the past. It seems to be much easier to do now. Plus, having subscriptions in Microsoft Azure make it easy.
Blair Hurlbut: The whole selling point for me is this one connection point. If you are a Dynamics 365 subscriber: you can access email, you can access an ERP, SharePoint, Power BI – through one sign-in, through one subscription price. It is pretty unbelievable.
Monica Heir: Everyone is able to access Dynamics 365. It is a cost win from that perspective. People are now used to the subscription model for software. Microsoft is making a great business case for customers to expand their systems and turn on new functionality. It has that agile technology approach where it is incremental and approachable. I think paying a single subscription fee, customers are able to turn on what they need and when they need it. It is a win for customers new to Microsoft Dynamics.
Jeff Landeen: The wizards in Dynamics 365 are very nice, which makes set-up of the system ridiculously easy for the customer. The other great advantage is that exists entirely in the Cloud, which means I don’t need to go source a server, install SQL server and do all the associated prep work. With Microsoft Dynamics 365 you basically turn it on and go.
Q4: What are your overall first impressions of Dynamics 365?
Jeff Bacon: Is it market-ready? Is it a Beta? I don’t know if it is Beta, but it is typical of Microsoft. I am sure that version two will be better and version three would be better yet. As it pertains to Microsoft Dynamics Partners as a whole, I think most will be waiting for the next release.
Personally, I believe we need to be ready to help our customers prepare for this transition. We will have several strategies, Dynamics 365 being one of them, to get customers ready for a cloud-based infrastructure, which includes moving our existing on-premise Microsoft Dynamics NAV clients over to Microsoft Azure (at a minimum).
As Dynamics 365 evolves a bit more, we will have some specific migration strategies to get clients on to a subscription-based model. That is yet to be done with Microsoft because of the capabilities and the licensing complexities.
Blair Hurlbut: Surprisingly, Dynamics 365 looks almost identical to Dynamics NAV. I think it is market-ready. That is what Microsoft has be preparing Dynamics NAV for since 2009 with the role-tailored client, which are pages. So those pages are essentially webpages. Microsoft has been gearing Dynamics NAV for this for over 7 years and have finally gotten there after years of ongoing development. So I would hope it is market-ready.
Monica Heir: Dynamics 365 is absolutely market-ready. The fact that you have Dynamics CRM already, which is a market-ready solution, as well as the other Dynamics market-ready solutions in Dynamics 365 – it was already there. Plus, you are now leveraging “the common data model”. The pieces of the foundation were already there. You can also see the beginning of the roadmap is also there. Microsoft can really build upon this foundation. I am excited to see what Microsoft will do in the next couple of year to leverage this.
Jeff Landeen: All the functionality we have in Dynamics NAV (minus manufacturing), is all available in Dynamics 365 (Business edition), so I’d say it is market-ready. It is not a Beta. It is a full-featured product because it is built off the existing Dynamics NAV infrastructure.
What is Dynamics 365 Really?
We will continue to explore Dynamics 365. What does Dynamics 365 mean to the Microsoft Dynamics community? How does Dynamics 365 fit in the marketplace? What does Dynamics 365 mean for Dynamics customers? This is just Part 1 in this 3-part blog series. Stay tuned to the Catapult blog to learn more from our experts in the coming weeks!
To continue learning more about Microsoft Dynamics 365 from our experts, read Part 2: Microsoft Dynamics 365 – What You Need to know – click here. Or, skip ahead to Part 3!