Executive Q&A: How to accelerate the Microsoft Dynamics NAV channel's cloud journey

November 17 2017

When we spoke to SaaSplaza CEO Berend-Jan van Maanen, he had just flown from Amsterdam to Seattle for strategic discussions with Microsoft. The focus of the meetings was to accelerate Dynamics partners' journey to the cloud, which all parties seem to agree is moving too slowly.

"The danger for partners who postpone selling cloud solutions is that their competitors will eat their lunch," he says.

"Customers are naturally turning to born-in-the-cloud ERP providers," says Van Maanen, "and Microsoft partners are at risk if their efforts stall in 2018. It need not be that way."

He believes that with Microsoft's solid product, plus partners' vertical and implementation expertise and the guidance of Dynamics-focused Cloud Solution Providers (CSP) like SaaSplaza, Microsoft Dynamics partners can beat the competition on value and competitive offerings. However, he believes the partners need more guidance both from Microsoft and by CSPs to make the cloud journey.

SaaSplaza has delivered Microsoft Dynamics as a Service on a global scale since 2008. They started in private hosting, and have now expanded to 11 Microsoft Azure locations, as well as enabling hybrid solutions. Their primary go-to market is via the Microsoft channel, with a global network of 280 Dynamics partners. Van Maanen and SaaSplaza's General Manager for the Americas, Olivier Meynier, spoke with MSDynamicsWorld to discuss the barrier to the Microsoft channel's cloud journey and to offer ideas on how to move forward and embrace the cloud to remain relevant.

MSDW: What makes the cloud transition difficult for Dynamics partners? 

Berend-Jan van Maanen

Van Maanen: It's that under Satya Nadella, Microsoft has said they want every person and organization on the planet to achieve more. Microsoft requires that partners not get stuck in a mono-brand, one-product provider frame of mind, but instead think like somebody who owns a customer relationship and serves that end customer across a portfolio of different solutions.

But that is hard. They're being asked by Microsoft to cross-sell and upsell a wider variety of products, when many don't have the right capability about the cloud or anything related to Azure or integrations beyond Dynamics. If they venture into such territory, they have to hire a lot of new staff, develop Cloud skills, create better billing systems, stand up24/7 support operations and assume all sorts of legal complexities.

The big market shift is that if you don't serve a wider portfolio than a single brand, then, the customer is going to go somewhere else, and Microsoft is not going to fully support you as a partner.

We feel it's vital to enable the partner channel to offer that extended portfolio. This is where we play a key role, to plug the hole that exists due to the lack of expertise about the cloud and business applications that run in it.

Are NAV partners uncomfortable talking cloud with their clients? 

Van Maanen: I believe so. The amount of detail that end-customers demand from their partners is significant, so it's understandable it's looked at as complex. But we do see that partners embrace cloud a lot more than a year ago.

There are over 200,000 installs of Dynamics across NAV, AX, GP and SL, and the vast majority of systems are running on premise. There is an enormous business opportunity in moving those customers to the cloud. Customers that have not migrated or upgraded to the cloud yet are fast realizing they are being left behind in the world of digital transformation. Microsoft is aligned on this opportunity because staying on premise doesn't serve customers well.

Which cloud competencies offer the best ROI for the partners with whom you work?

Van Maanen: It's all to do with world cloud competency; the in-depth Level 100, 200, 300 trainings for, let's say, cloud solution architecture - really understanding how enterprise architecture and IT systems work beyond just the software design.

With a curriculum of yearly programs, we school our engineers to be up-to-date on regulatory and compliance measures like ISAE, PCI, etc, as well as staying up to date with the new application functionality sets for all of the solutions we support.

Olivier Meynier

Meynier: In addition, everything around security, identity management, complex integrations, requires specific skills and continuous training. There are often hybrid scenarios where the main ERP workloads may run on Azure, with a need to be integrated with other workloads or services that run on other clouds, or on premise. 

What would you recommend to NAV partners and their customers about leaving the on-prem world? 

Van Maanen: I would argue that partners and end-customers truly need a trusted adviser to help them with their business needs, which is sometimes challenging with the Microsoft market messaging that is leaning forward to public cloud only, despite the fact that customized solutions don't always fit that route best.

A partner serving 100 end-customers in a particular industry vertical, in a particular geography, can move the existing software versions that they operate to the cloud, and immediately benefit from the scale, the security and the global reach that Azure managed and supported by offers.

Meynier: I think partners should seriously look at the huge opportunities to transition their existing customers to the cloud. For simple financial and light customization needs, they can consider a migration to Dynamics 365 or Tenerife (in Spring 2018).

For customers who are running highly customized with complex integration, partners have the option to migrate those NAV customers onto Azure. This transition to Azure does not imply an upgrade to the latest NAV version. Delivering older versions of NAV solutions on Azure would provide the same benefits to customers in terms of performance, availability and business continuity guarantees, and overall reduction of IT costs and headaches. 

Capturing this opportunity requires partners to have the right Azure technical capabilities as well as being 24/7 service-minded organizations which .  

What information are you waiting for from Microsoft around how NAV and Tenerife will support ISV add-ons and customizations? How are you advising your clients and partners?

Meynier: Dynamics 365 Tenerife all customizations to be done via NAV Extensions. This represents a significant investment and effort for most partners in terms of rearchitecture and code re-write for their UP and customization. Not all NAV solutions will fit into D365 Tenerife, therefore, partners can continue to build complex ERP solutions based on NAV.

As mentioned previously, both D365 Tenerife and NAV (2009 all the way to 2018) can be delivered as cloud solutions from Azure.

Van Maanen: We're advising partners to start their journey with a full-fledged NAV-on-Azure cloud solution; and in parallel, to prepare at their own pace, to be ready to have this secondary offering on the public cloud, dependent on the speed that they can make the switch with software developers and with cloud readiness.  

Microsoft is advancing a range of powerful Azure services; which tools are you most optimistic about for ERP users?

Meynier: Azure Services is vast, from Modern Desktop to data and AI. Office 365 offers powerful integration into NAV with PowerBI, SharePoint online, OneDrive to name a few. Flow is also a great tool to create automated workflows between various apps and services.

What is key in the future of D365 Tenerife and NAV is that Common Data Service (CDS) is the layer between the ERP service and the other Azure services that allows you to consume and create those really rich applications integrating core ERP with other apps in the Microsoft services portfolio.

Based on our conversations with Microsoft, CDS will actually link to any flavor of Tenerife, if it's the cloud version or the NAV on-premise version, which should be running on Azure under a managed service layer.

Van Maanen: There are hundreds of Azure SKUs being released that may be the best solution in any specific situation. You have to think, is it your core business to stay on top of that? Or do you go through a cloud solution provider who does this for a living, at scale? All those partners that are anywhere between 10 and 500 employees are fantastic at developing and implementing software, but there's competitive capability in abundance by partnering with cloud providers like us.

You have the ear of the entire Dynamics channel; what do they need to know? 

Van Maanen: It's obvious we need to change, but Dynamics partners are saying, "Microsoft is telling me all these new fantastic services are available now, start working with them." Absolutely, the longer you wait, the more customers are going to choose a born-in-the-cloud ERP provider, no doubt about it. But partners need proper guidance, which apps and services do I need to embrace today, and which ones within the year, or on a five-year horizon?

Then, they may be asking if the public cloud is right for them? In fairness, probably not today for a lot of cases where the customizations are not there, industry solutions or the localizations are not there, or the scope of the environment is too global, too complex, or too integrated with different systems. Then you are better off with private solutions where you can use that fantastic software and the power of Azure, but in a more customized private environment.

In other instances where it is pretty straightforward, go for it, absolutely.  

Meynier: My advice to partners is, think about what it really costs to make that cloud investment, if you want to build your Azure capability and cloud service business on your own. Especially with NAV, some small partners are doing it in a very substandard fashion, with no SLAs. The service quality is not going to be what it should be, because they simply will not be able to scale trying to do it themselves with a small IT-group. They get into a struggle mode and then reach out to us saying, "I need an SLA, and a partner that does that for a living." We're glad to help, but they are not getting off on the right foot, and in the end, customers bear the brunt of poor service.

You find yourself in an elevator with Satya Nadella and you have his ear for a minute; what does he need to hear?

Van Maanen: I would tell him, we're sitting on this enormous cloud and business application opportunity. Allow the market multiple ways and their own speed to embrace cloud. There's no drag-and-drop way for the Dynamics channel to transform itself to become the next Salesforce.com. This transition is going to take time.

The key to this is how we empower everybody in their core business strength to grab the cloud opportunity. Microsoft is pushing generic solutions that do not always meet industry or customer requirements. The partners are not adopting cloud at the speed we all would like because they miss resources with the right capability. SaaSplaza has the scale and expertise to bring Dynamics onto Azure, while lacking the industry vertical expertise that thousands of partners have worldwide. If we join forces, customers get the best possible solution and that's what this is about: getting the right combinations to be competitive and attentive to customers. 

FREE Membership Required to View Full Content:

Become a MemberLogin
Joining MSDynamicsWorld.com gives you free, unlimited access to news, analysis, white papers, case studies, product brochures, and more, and it’s all FREE. You’ll also have the option to receive periodic email newsletters with the latest relevant articles and content updates. Learn more about us here
About Dann Anthony Maurno

Dann Anthony Maurno is a seasoned business journalist who began his career as International Marketing Manager with Lilly Software, then moved on as a freelancer to write for such prestigious clients as CFO Magazine; Compliance Week;Manufacturing Business Technology; Decision Resources, Inc.; The Economist Intelligence Unit; and corporate clients such as Iron Mountain, Microsoft and SAP. He is the co-author of Thin Air: How Wireless Technology Supports Lean Initiatives(CRC/Productivity Press, 2010).

More about Dann Anthony Maurno