Microsoft Dynamics NAV 2009--A Hosted Approach

The on-demand market has been heating up rapidly in the past several years, with many vendors offering hosted, on-demand solutions, or even platforms, and promising many benefits to their end customers over the more traditional on-premise approach.

For Microsoft Dynamics NAV, however, on-demand hosting has been slow in coming. There are reasons to expect all that may change with the introduction of Microsoft Dynamics NAV 2009 later this year.

To appreciate why on-demand hosting has lagged for NAV, it helps to understand both the benefits of hosted solutions, and the challenges for Dynamics NAV. The benefits of on-demand hosting are clear: No investment in server hardware, minimal investment in infrastructure, quick implementation, no maintenance, no investment in internal expertise, remote access-we could list many more. In the end, most of these come down to one alone: cost savings. Hosted solutions generally bring faster and higher ROI and come at a lower TCO, which makes them increasingly attractive to customers.

On the other end of the food chain, hosted solution vendors are capable of offering solutions at lower costs, primarily through economies of scale. When increase in output volume doesn't create a comparable increase in costs, you have achieved economies of scale. If you are offering a standard hosted solution, which offers feature-rich functionality with low customizations capabilities (some vendors are marketing their configuration capabilities as a customization, which is misleading), you can achieve fairly high economies of scale by being capable of balancing the workload over fewer servers and by maintaining a single code base. Besides a low price tag, hosted solutions vendors can accommodate more value-added services into their offerings, such as high-availability, short response times or premium technical expertise.

Recently, market demand for hosted ERP solutions has been increasing, as ...