As Customers Express Caution, Microsoft Dynamics ERP Cloud Strategy Takes the Long View

As the morning's announcement of Microsoft's Dynamics ERP cloud vision began to sink in today at Convergence 2011, Microsoft corporate vice president Kirill Tatarinov revealed a few additional details today on the requirements and decision points Microsoft will face as it readies future releases aimed at the cloud. 

The next major version of Dynamics ERP products "will run in Windows Azure at scale for our customers, supporting the same business model we have today bringing the partner ecosystem with us", said Tatarinov.  But he also noted that announcements and approaches could vary by product and by timing of the product roadmaps.  Individual announcements will hit on a product by product basis.

Since the rollout of cloud support will follow the known Dynamics product roadmap, Tatarinov noted that Dynamics NAV ‘7', the next planned major release in the product line, is due in 2012, putting Dynamics NAV first in line for an Azure-based release.

The three years of Dynamics CRM Online experience have yielded some important lessons for the Dynamics organization in clarifying its ERP cloud approach: account for partner profitability, select smart release schedules, avoid overly strict upgrades, and offer a smart, cloud-centric sales model, among other things.  Microsoft also revealed that it has seen an even split between new on-premise and online deployments since the launch of Dynamics CRM 2011.  "That fully represents the state of the industry," Tatarinov added.

But in many ways, ERP in the cloud is a different creature than cloud CRM.  Microsoft has conducted market research and analysis on cloud ERP to this point, and Tatarinov says they have "learned...that in ERP you will see mostly mixed workload deployments. Some workloads move to the cloud and some staying on premises, and I think this [mix] will be the ...