Interview: Microsoft Dynamics 365 Business Central progress and plans, with Marko Perisic and Toby Bowers

October 11 2018

Microsoft is part way through a month-long reveal of the October release of Dynamics 365 Business Central that began in earnest at Directions North America 2018, will continue next week at NAVUG/BCUG Summit 2018, and will then reach Europe with Directions EMEA 2018. What some partners have already learned, and what Microsoft is expected to continue communicating to the NAV community, is that Business Central will play a key role in the business applications vision, with plenty of goals and challenges still remaining.

During the recent Directions North America event I sat down with Microsoft Dynamics 365 general manager for SMB solutions Marko Perisic and senior director Toby Bowers to find out more about product strategy, the company initiatives to gain momentum with partners, the latest perspective on the ISV opportunity, the importance of user experience, and more.

MSDW: What are the biggest differences in how Microsoft is planning and prioritizing Business Central now versus a year ago?

Marko Perisic: I actually think the priorities are no different. We always knew that we needed to have an SMB solution for that market and a super attractive offering for that market. Last year we fumbled the ball with some clumsy messaging and didn't communicate clearly how important it is. Over the last year we've gotten better at that and communicated very clearly how important it is.

Plus what we showed that [this week] with the great traction we're getting with the product, the great feedback. We know we need a great product for the market and now we have it and it's Business Central, full stop. That is our commitment.

In some ways, the perception of partners may have changed because of last year, but for us we always knew we needed a great updated SMB product and now we know it's Business Central and that's our investment going forward and that's what it's going to be.

Toby BowersToby Bowers: One of the things I'm responsible for is our partner strategy and the investments we make in the channel. It is absolutely our priority to invest in the channel to be ready for Business Central and capitalize on that increasing demand. So training, readiness programs, all the things I spoke about to the partners [at the keynote].

Perisic: From our managers, senior executives at Microsoft, it is very clear that they are 100% committed behind this product. We've seen that through public statements and we know that by the internal actions they are taking.

What are Microsoft's priorities around intelligent edge and intelligent cloud for Dynamics SMB solutions, and how would you like to see customers make those decisions?

Perisic: The net difference in our investment to support intelligent edge vs net new [cloud] customers is so small that … both are a priority depending on what the partner's priorities are. So we don't really need to sacrifice one for the other, which means effectively we can be very efficient and offer both options to partners in the go-to-market.

It's in our best interest to bring existing customers into the fold as quick as possible. We're going to help the partners with that. But ultimately it is the partner's decision about what is the priority - pulling in existing customer or pursuing net new.

Bowers: There's no doubt we're focused on continuing to invest in and grow our cloud business. What Marko's team has built is such a huge differentiator for us. For customers who are running an ERP on-prem, sure they are hesitant and concerned about moving to the cloud because they haven't realized the business value. When I talk to customers or partners, the customer has to realize business value before they will consider moving their on-prem ERP system that is working just fine for them today. One of the ways to realize that business value is to bring the goodness of the cloud down to what they are using today [via Intelligent Cloud Insights]. Our unique ability to offer that with customers who are using Microsoft products but aren't yet ready to wholesale move to the cloud, I think that is a great differentiator.

Some North American Dynamics ERP professionals have talked about looking forward to seeing Business Central get updates to make it friendlier to US and Canadian finance professionals? Has that been a priority for Microsoft?

Perisic: I wouldn't say there is a lot of effort going into that theme, but we are prioritizing mission critical localization across our big geos [like] the US, Canada, and western Europe. Whatever feedback we get through those channels is what we use to prioritize. Accounting enhancements for a locale could be an example of that. But there are others, too, like for example integration to local services for payroll. So [that particular area] is not a priority and not a planned specific feature set, but it is a part of being open, listening, and being agile to build up the solution as quickly as possible.

Bowers: In terms of being adaptable, the demonstrations we have seen this week show how different geographies might use [different] search terms, and Business Central has an understanding of how those terms or alternatives are used. That is an example of a game changer of how we can adapt to local markets.

Perisic: If I could digress for a second, with AI, we get the ability to solve old problems in a new way. We would have built an extension in past that would have built a base for, say Canadian customers. Now they can just interact with the software and the software will understand what their intent is.

How will Microsoft get partners more involved in developing on top of Business Central? When it comes to engaging them, what are the priorities – and are there any highlights so far?

Perisic: We are building the ability for partners to convert code-customized solutions quickly and easily into big extensions that they can deploy in the cloud, then refactor into smaller extensions. [The tool that will enable this] is a game changer because that will allow some big vertical ISVs who bring a community of partners with them to get to the cloud faster. Some are already there but some are having challenges converting their solutions to extensions and we now have a tool that enables that.

Then we have the Ready to Go program. We are engaging directly with partners or through local field offices to share information, prepare, and get on same page to prepare for their add-ons as extensions. Many ISVs here this week have stated that they already have their extensions on AppSource as the source of their apps. We are getting some good traction there with some key add-ons.

When it comes to existing NAV ISVs versus trying to attract fresh faces to the ecosystem, are there any other goals?

Bowers: ISVs are strategically important to the business. Whether it is an existing ISV solution built on NAV or a net new company out there thinking about building on top of NAV, it's the same process but in a slightly different application. There's the technical enablement to migrate or move across with a new solution. We're working to drive that enablement whether it is existing or new ISVs.

Then step two is the programs we have. Today we have the ISV Cloud Embed program, which is open to any qualifed ISV who builds on top of Business Central platform, whether existing or net new. So we have a program to support these ISVs as they do the work technically to build the solution. Step three is then how we jointly go to market. As you get accepted into ISV Cloud Embed, it unlocks go-to-market investments and support that we will give. We just announced a new co-sell incentive for our sales teams to go to market with ISV Cloud Embed partners and we've seen that work with our Azure partners so we're essentially picking a page out of that playbook in terms of its success.

What is the latest on the ISV Cloud Embed program?

Bowers: ISV Cloud Embed was announced in October 2017 and is specifically designed toward, by its nature, embedded applications in Dynamics that are reliant on the underlying application and serving a particular vertical or industry. Typically, the solutions are branded as their own rather than Business Central, but it is not required.

We don't disclose numbers on that program, but the number of partners in that program has doubled in the last three to four months. It is accelerating quickly. We added co-sell incentives in July at Inspire 2018 and we expect that to fuel additional interest.

Is there a connection between the ISV Cloud Embed program and the goal of moving large ISV solutions to Business Central in the cloud?

Perisic: The ISV Cloud Embed program should be abstracted away from any technical efforts related to it. We have allowed a number of ISVs to take solutions as-is and deploy them on Microsoft platform. But as a result of helping get ISVs onto the Business Central platform early, we realized we can do it in a different way, that we can create a separation of the low level platform and that has helped us refactor existing customizations as extensions and create a tool for it and as an end result we can support a lot more programmatically.

Can you talk more about efforts around user experience? How does it align with other design work in the business applications group?

Perisic: User experience is perhaps one of those underplayed aspects of an ERP system. For far too long ERP systems have been accepted as being ugly, and yet they are such mission critical parts of a company. And as companies are hiring more and more millennials into the workforce, who are born with a smartphone in their hand, they are going to look at [an older ERP] and wonder what they're using. So clearly there is a need to modernize, but as we discovered that we need to do it we realized it has broader positive impact. My mouse pad is not a logo of Microsoft, it's a picture of the UI of Business Central. Because when the UI becomes a sales tool, then you have something special. When you realize that, then it's a powerful marketing tool because then you're not hiding the very thing you're selling, you're promoting it. That's where we are and how we think about.

Given how R&D seems structured at Microsoft, can you talk about the approach to making UX design decisions, standards, or directions?

Perisic: I believe we're taking the right approach here. The wrong approach would be a central committee doing all design. Then you spend all your time deciding and nothing would ever happen. What we have instead is a bunch of speedboats that move ahead and innovate at their own pace, pulling those things together over time. So what you see is a lot of fluid design elements of Office make it into Dynamics 365, and Dynamics 365 innovation makes it to Office, a lot of the innovation we showed off for Business Central will make it to other Dynamics 365 products and vice versa. There is artistic freedom to innovate and then to pull it all together where we get the best results. That's what we are doing across the company.

What message or highlights around CDS will you be noting?

Perisic: Data is the only platform that matters, and our data platform is CDS. So clearly that is on the near- and long-term roadmap. We already have CDS integration for D365 for Sales, we're going to make sure it works as well as it has been and better. We'll make sure it works with the Dynamics 365 AI apps, and then we'll start expanding on other entities across Microsoft. Because that will be the integration platform of the future. Dynamics 365 for Sales is clearly first.

You mentioned the Dynamics 365 AI apps, are there other apps that you are prioritizing?

Perisic: We haven't figured out exact priority, but you can imagine Project Service Automation, Field Service, Marketing, and tying that into Business Central. Then you can do a lot of really creative stuff. But we haven't made decisions yet. We know sales is first and we'll expand from there.

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Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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