Microsoft's SMB Business Apps re-alignment: An interview with Dynamics 365 GM Mike Morton

Microsoft’s business applications and platform group, now led by Charles Lamanna, has already undergone some re-alignment. On the SMB side, Mike Morton, who had been GM for Dynamics 365 Business Central, now takes on broader responsibility for the segment. As he explains in a new interview with MSDW, the new role reflects Lamanna’s aim to bring product development into line with the buyers in each segment.

Morton also tells us about his view on where Business Central, Microsoft’s SMB-focused cloud ERP offering, is meeting or exceeding expectations and how priorities for Business Central compare to those of its enterprise-focused siblings, D365 Finance and D365 Supply Chain Management. When he took on the role of leading Business Central in 2020, Morton says he was hearing some clear messages from the community about where Microsoft needed to address issues. The product is in a better place now, he believes, and that has given the Business Central team more bandwidth to pursue a range of goals like Teams integration (where he says Business Central is leading other apps), process automation, Power Platform integration, global expansion and more.

In the partner channel, supporting Business Central migrations from Dynamics GP or NAV remains important. As Morton told partners at the recent Directions North America 2022 event, over 550 unique organizations used the BC cloud migration tool in the previous 30 days. While that usage metric doesn’t equate to completed migrations, Morton said it speaks to the effort partners are undertaking with their clients. The number of migrations from legacy ERPs meets the company’s expectations, while the number of new customers has far exceeded goals. And Morton told us more about how he has adapted his management to meet the needs of an enterprise software customer base, where the need for stability and predictability often take precedence over speed of innovation. But he also sees signs that the world of business applications is headed toward accelerated product evolution as organizations become more comfortable with cloud-based delivery.

MSDW: Can you explain more about your new role at Microsoft with overall SMB business applications responsibility?

Mike Morton: It is a newly created responsibility. Charles Lamanna leads Dynamics and Power Platform, and you probably saw the news that James Phillips [departed.] So now Charles…wanted to align his direct reports and leaders to the actual kind of buyers in the [market]. So in the enterprise space, the person that chooses your customer engagement is often a very different person than the person that's managing your supply chain. And then in SMB, it's a little bit of a different situation where often the purchase for those things is the same person or the same group of leaders. So instead of trying to sort of shoehorn Business Central into some kind of other kind of thing, we basically say, we're going to create an SMB space. And obviously Business Central is going to be the hero of that space. But there really is pretty significant ambition with Power Platform and SMB. And you saw that with [Microsoft Power Platform GM Ryan Cunningham] and others here at Directions North America. [There are long-term ambitions with products like Dynamics 365 Sales and Customer Service. Although they have different trajectories, Sales is doing quite well in the SMB space].

D365 Sales Professional seems to be somewhat geared toward SMB.

Yeah. So today, Sales Professional and Customer Service Professional are two SKUs that are absolutely marketed at SMB. And so the SKUs’ creation and the reason for existence is to have a less expensive SKU with some less capabilities that are optimized for the SMB space. [We recognize some people in the SMB market actually end up purchasing enterprise SKUs] because of the way that we set limitations. So the intent is absolutely still there. We created go-to-markets already for those things, with the Pro SKUs. But when you talk to me, I talk success of [Dynamics 365] Sales and Customer Service in SMB, and not necessarily success of those SKUs just because we're seeing so many of those SMBs actually purchasing the enterprise SKUs.

Given your experience in other roles at Microsoft, do you have any interesting observations from the last couple years with the Biz Apps team and any changes in your approach to product management?