Microsoft Dynamics 365 Business Central to Dominate Mid-Market ERP for the next 20 years

Once upon a time there was a company called Microsoft that acquired its way into the mid-market ERP space. The first few years went dreamily as Microsoft generally left the existing companies of Great Plains, Navision and Axapta alone. Following its all-consuming passion for the cloud, Microsoft started forcing the ERP group to get on board and cloudify.

Microsoft, letting the horse run before the cart, made a big launch with a huge confusing marketing spend that they called Dynamics 365 - out of which a solution called 365 Business Edition was prematurely delivered. This tool was confused from the get-go and had muted success.

The result was a great fear which spread across the Microsoft mid-market ERP ecosystem - that to support this failed endeavor, Microsoft may kill off GP and NAV. Doing so would fulfill Microsoft’s dream of seeing their existing ERP base support their Azure Consumption targets.

Wise heads prevailed: Microsoft went back to develop a new plan and have another try at delivering a mid-market ERP cloud.

Microsoft gets it right.

This time Microsoft nailed it. They released a full featured and robust tool renamed Microsoft Dynamics 365 Business Central. The reseller market got on board and got excited. This was a tool they could sell. The story Microsoft had sold two years earlier was coming to fruition. All the talk about shutting down the older, on-premise solutions disappeared and everyone relaxed. Microsoft partners kept selling the traditional ERP solutions as well as geared up to sell Business Central. The new tool was not seen as a competitor you should shun, but an additional business offering and revenue stream.

Dynamics 365 Business Central is built upon the existing NAV platform which gives it a great deal of credibility. NAV has been proven over multiple decades and has a throng of successful and happy customers. Microsoft, to their credit, listened to their customer and partners and made some significant direction changes. Microsoft agreed to offer Business Central as both a Microsoft Hosted Solution or as a partner hosted or even an on-premise offering. This made a great deal of sense as it maintained the support of the Partner community (which had been wavering), which is Microsoft greatest competitive advantage in the mid-market.  

Since the official launch on April the 2nd 2018, there has been a new vibe going around. Sales are closing. Partners are getting their consultants trained. Business models are being adjusted. Microsoft is putting effort into the Business Applications space in the form of product dev, training, education, documentation, as well as marketing. This seems much more real than the previous aborted attempt. 

An Opportunity and Challenge

For Microsoft, the business application space is a huge opportunity and covers a large array of offerings, all provisioned on the Azure platform. This is both Microsoft’s greatest advantage and its most serious challenge. Not that long ago there were large, profitable companies (Great Plains, Navision, NetSuite) focused solely on delivering an ERP solution. Microsoft’s new model is blurring all the waters - in what could be a good thing or could end up diluting the message.

Microsoft has a complex CRM solution, two cloud-based ERP’s, a standalone BI Solution (Power BI), an app development platform (Power Apps), a workflow tool (Flow), Office, SharePoint, a CDM and a CDS, Enterprise Marketing software, Field Service, Project Service and a whole bunch more thrown into the mix. My point here is that Microsoft have a huge and varied offering. The challenge for Microsoft is to give each component of this offering its due attention to make it as powerful and successful as it can be. 

Focusing on ERP and CRM

My main focus is ERP and CRM. If we consider just ERP, it is a large and complex software solution that takes dedicated experts to build, support, document and deliver. Those that use Business Central every day want Microsoft to have ERP as the main event, the main focus. They will never be happy if ERP becomes a side module inside all the Business Applications.

Through the agenda released for the upcoming Microsoft Business Applications Summit, we can get a feel for where Microsoft’s priorities lie. There will be 120+ breakout sessions. There will be 21 breakout sessions on Power BI, 20 sessions on Flow, 50ish sessions covering Customer Engagement (CRM), five sessions on Business Central, nine sessions on Excel. I am not saying there is anything wrong with the mix but this highlights the challenge Microsoft has in choosing where to put their focus. I am not sure how many financial controllers will attend an event with only five sessions specifically targeted at Accounting and ERP. Microsoft certainly has the budget, and it seems the will, to focus on everything at once. My only question is whether the focus on ERP will be enough to satisfy those who live and love ERP all day, every day.

Our Aim with Integration and Reporting

As for our team here at eOne, we are excited about all the moving parts Microsoft has put together. As an ISV we have seen a huge opportunity to help fill the gaps and be the glue for some of these applications. Microsoft keeps throwing around words like “fully integrated” and “seamless” but these are a significant stretch of fact. The need for our integration solution, SmartConnect, is greater than ever with the new Microsoft Business Stack.

We have also developed a small data reporting solution called Popdock. While Microsoft was focused on pretty graphs in Power BI, we saw a large gap in getting the right data to every day workers who are just trying to do their jobs. Popdock is a very flexible, list-based reporting tool that gives users just one app to get at all their data and combine data across multiple sources into single intelligent lists.

We Back Microsoft

We think Microsoft has gotten it right this time around. The business world is more ready for an ERP cloud than ever before. There remain many challenges ahead but with momentum on their side, we think Microsoft may just kick a few goals here in a World Cup year. I am backing Microsoft to break some sales records and see them begin to dominate the mid-market ERP space in the cloud. If you have read my previous articles you know I will be tough on Microsoft when I think they are messing up, but right now everything is aligned for Microsoft to dominate this space for the next 10-20 years. NetSuite should be nervous. 

#microsoft #dyn365BC #businesscentral #eonesolutions #dyngp