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The Dynamic Channel is dead – Long live the Dynamics Channel

I recently read the Directions 2016 business report from Guus again.

In an interview, Paul White, GM of Dynamics Product Marketing stated that only 20% of current partners will make it through the cloud transformation. This is a provocative statement and for that, it is a good wake up call to really think about your own cloud strategy  and get started in the transformation. However, I would argue that the 20% is only correct if you narrow cloud business to scalable, repeatable Dynamics 365 Business Edition business. In that 10-99 employee space, Paul makes a fair point that this segment is underserved with business applications but most customers do not accept to pay premium for typical project led implementation of an ERP and CRM application. They accept standardization in return of simple and affordable platform. And if you want to go in that standardized, simplified business you can only make it profitable if you do it at scale and reduce your cost of sales and time to market. I also agree that it is unlikely you can do both approaches, the project led and scalable small business in one organization. You need different skill sets and processes in sales and marketing. So far, so good and to that extend, only few partners will take that leap and create a new and differentiated organization and go-to-market.

But here is my big BUT…. Not all customers will go for standardized and simplified solution. We will continue to have customers that have very specific business processes , that have a rather sophisticated organizational setup or complex processes to maximize impact for their customers. And if they want to optimized these processes with a business application, they need expertise and deep knowledge to map business process with a business application. No doubt, this business application will likely be a multi tenant cloud solution in future. But that doesn’t take away the need to spend quality time with customer to understand their specific needs, developing process flows and customize the business application to fulfill the needs of a customer. And here we are again at the project led business with consultants and a tailored solution.

So my point is that embracing the cloud architecture and Dynamics 365 for that matter, does not equal having a scalable, standardized go-to-market approach. And if you happen to transform your Dynamics Solution into the cloud and App architecture, but you maintain your consulting approach to customers that outgrow the standardized solutions, then you have a bright future ahead of you. You will not count to the 20% of partners that scale in terms of customer adds, correct, but that was not your business strategy to start with. Again, embracing Dynamics 365 and transforming IP to sit as extension and app on top of Dynamics 365 is a mandate in my view. You want to provide a modern, flexible and scalable platform to customers and stay ahead of competitors.

In that process, we take pride in being your sparring partner, providing trainings, consultancy and best practices to undergo this transformation. We also like to provide you with a platform to optimize your resources, outsourcing some of the lower level migration work and bringing in fresh capabilities and capacity through Dynasource. And we want to bring new prospects for your solution and your services through our Take-the-Lead program, even if you are not counting yourself into the 20% scale cloud partners. We are confident, you have a prosperous business ahead of you.