With Microsoft talking e-commerce, established players see opportunity and challenge

When Microsoft introduces a product that could address a major new segment, the market notices. So when the company unveiled Dynamics 365 Commerce as part of the recent 2019 release wave 2 for its business applications suite, it raised the question of whether Microsoft has committed to delivering an e-commerce solution, and how established e-commerce vendors in the Microsoft channel would adapt.

So far, Microsoft has positioned D365 Commerce as an incremental update to Dynamics 365 Retail, an established product that adds a specialized retail architecture and industry-specific features and interfaces around Dynamics 365 for Finance and Operations. As "Commerce", the product adds a nascent e-commerce service based on the company's own internal B2C e-commerce system.

D365 Commerce has a long list of enhancements on its roadmap, many of which are not e-commerce related. Meanwhile, Microsoft recently stated that Dynamics 365 Retail sees more than 9.8 million checkouts processed per month, with more than 5,600 stores using the POS.

At Episerver Ascend 2019 this week, Episerver officials and their partners said Microsoft's decision to shift the positioning of their D365 Retail product to "commerce" is as much an opportunity as it is any potential competition at this point.

Microsoft has been transparent in its plans around the D365 Commerce product, said Karen Chastain, Episerver's senior director of g lobal alliances. Episerver is a long time Microsoft partner that uses Azure exclusively to run its cloud-based content and commerce platform. Chastain said Microsoft's efforts will be noticed by all commerce vendors in the channel, but their offering is not yet comparable.

From a partnership perspective, Microsoft has been very transparent and has been helpful from positioning standpoint. As a trusted vendor that drives so much Azure, we feel the strength of the partnership and they wanted to support us with that transparency.

We definitely feel that they're checking a box, that they want with these capabilities. We have a much more robust platform and will navigate working with them where we can. When we know it might be an option, we'll have to agree to compete, and that's ok too.

Buyers that do consider D365 Commerce in the next six to 12 months are likely to fall into one of two basic profiles.