Partners Plan for Microsoft Dynamics ERP Cloud Vision, Part 1: Changing Business Models and Market Perception

Microsoft's announcement at Convergence 2011 that it plans to start supporting and, to some extent, deploying cloud versions of its Dynamics ERP solutions starting with NAV "7" had conference attendees buzzing. But some partners are still wondering exactly what this means for them. 

With many of Microsoft's own plans still uncertain or at least under wraps, partners - especially those whose business model is entirely based on license and maintenance sales - are starting to look at ways to adjust and thrive even as the landscape continues to shift.

Re-examining the partner business model

One partner, who asked not to be named, expressed a bleak view of the business prospects for many of the partners selling their own hosted Dynamics ERP solutions.  "Dynamics ERP in the cloud is a different sales model and it's going to take a lot of revenue out of people's pockets because when Microsoft ends up hosting it, it's going to be dirt cheap just like Dynamics CRM. You can't compete with CRM Online," the partner said. "But there will still be customers that want on-premise ERP. Maybe 10 years from now, customers will say the cloud is the perfect place for everything to be. But I don't think customers, particularly in the middle segment of the [US], are ready to go there yet."

But Andrew Fass, President, AVF Consulting Inc., said partners can still make money on the services side.

"When it's all up and running and the price is reasonable, there certainly is money to be made from the services component," he said.

Fass said the smaller partners will ...