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Reflections on this weeks announcements from Microsoft

One of our founders summarized this week plain and simple: Never a dull moment. Yes it was a roller coaster week for Dynamics partners, especially the ones that build their business on the NAV platform. Other than just summarizing the events, I wanted to write up my position. And I felt it might make sense to put myself into the product marketing shoes of Microsoft and start with a white board session. How I would structure the best possible go-to-market for Dynamics in SMB?

First consideration is that most, if not all SMB companies do not deploy Accounting, Finance, ERP, Sales and Marketing all in once. One because they might have an existing solution and complement that or because they prioritize one over the other. Second we would want to optimize for the 10-99 employee space. As we have seen in past through market research from AMI, this is space where we should expect the highest growth for SaaS Business Apps. If I would now optimize the go-to-market for prospects that are starting from Finance / ERP, I would always integrate the industry context of a given prospect. I don’t believe that you can attract majority of customers in that space with a “vanilla”, one size fits all ERP platform. (See also my blog earlier this year) As customer you at least want to use the business app within your industry environment. The more sophisticated you get, the more you then need processes and functions that are specific to your industry, which is hard to get from a “horizontal” business app solution. So I probably would not bet on a finished user experience coming from Microsoft, but rather a platform where partners provide their industry expertice. Well isn’t that what Tenerife is all about? I think we should be really excited about the platform Microsoft announced this week.

 

Then I think about the Sales and Marketing side. This is still relatively new business process to many of our SMB customers. Which would suggest that you start simple, with processes that are most common, like managing a pipeline and then as you grow into the CRM concepts, you add functionality. As far as I understand, that is path forward with Dynamics 365 Sales, one service to start and then pay as you go. If you need more functionality, you add and pay. Looks like a winning strategy in SMB to me as well.

 

My point being that, highlevel, the go-to-market that Microsoft presented early this week is good news for us and our partners to be successful in acquiring more SMB customers to cloud, at scale. Unfortunately, it came with 3 major issue :

  • We need to benefit from Microsoft’s branding. Taking Dynamics with its individual brands to Dynamics 365 was a very smart move. It associates Dynamics to the de facto standard for cloud productivity, Office 365. If the SMB go to market, that is based on Teneriffe can’t take full advantage of thatbrand proposition, it limits its potential success. Even worse, it could be misperceived as having NAV become a legacy platform. Many competitors would love to take advantage of such a misperception.
  • The way it was positioned, provided room to speculate how committed Microsoft is on the different ERP platforms. So far, Microsoft and especially Marko Perisic did great job to ensure that customers and partners place a safe bet with AX, NAV, GP and the SL platform. I am not a technical person, but I do understand that providing only one ERP platform from small business with 10 employees to enterprises with thousands of employees and international subsidiaries is simply bound to fail. All competitors equally struggle to do so, they all go with 2 platforms to serve the purpose. We all need to see that strong commitment from Microsoft to the different Business Application Platforms.
  • I am with Steve Mordue that it was odd to have announcements around branding, positioning and product portfolio go out completely untested. That is why there is an Inner Circle, why there is a Partner Advisory Council. It’s great to see that Microsoft is taking feedback. They reacted at Directions, they start to react on the feedback we and other partners gave as part of the Inner Circle event, but it could have saved a lot of unproductive discussion and sleepless nights for many of us, if it would have been done in a small forum first and positioned to a larger crowd.

 

So in closing, there is much to be excited about the Dynamics future in SMB. The strategy is sound and Microsoft, especially the Dynamics NAV team, has demonstrated that they can deliver. If they take feedback to heart and make sure we remain in the strong position as Dynamics SMB partners, we have the best ahead of us. As QBS we will continue to represent the interests of our partners best we can and provide feedback to Microsoft, to optimize our joined go-to-market. Also watch out for our Directions 2017 Business report. We will have exclusive interviews with Marko Perisic and other executives from Microsoft.

Best regards,

Michael Hartmann

CEO, QBS group