Microsoft Says It's (Finally) Getting Serious About Focusing on Industry Verticals for Dynamics

Microsoft is renewing its focus on industry verticals, via adjustments to Dynamics software and stronger encouragement to partners and ISVs, several company officials stated at the Convergence Copenhagen 2008 conference.

Microsoft is focusing on special capabilities for its Dynamics NAV and AX software in five industry ares: manufacturing, retail, distribution, professional services, and the public sector. For NAV, partners develop the actual functional capabilities, while for AX, Microsoft builds the vertical capabilities into the software.

These capabilities are sometimes quite significant, explained Michael Ehrenberg, the chief Dynamics architect. For example, public sector organizations "do their accounting differently." The next version of Dynamics AX, due out within two years, will incorporate the public sector specialty, according to Kees Herogh, director of Dynamics AX Product Management. 

ISVs had been providing such capabilities, but they "require big changes to the core" of the applications, Ehrenberg said, "so Microsoft decided to build those. The more we do to deliver that industry ware, the easier it is for partners and customers."

Officials were more vague about the pressure being applied to partners and ISVs to become more industry oriented.

"Verticalization is not something new," said Kirill Tatarinov, corporte vice president of Microsoft Business Solutions. "We have been working on it since 2005. We encourage our partners to be focused...At the World Partner Conference, we gave awards to partners that are vertically focused. We are educating partners about particular verticals."

According to Doug Kennedy, vice president of Microsoft Dynamics partners, "We are adding more of a programmatic approach. We are encouraging them to specialize in one or more verticals. We're putting resources in place to encourage ...a deeper commitment by Microsoft...We're gong to take a more prescriptive approach."

Still, the move ...