The Changing Role of the ISV in the Microsoft Dynamics 365 Tenerife Era

December 27 2017

A lot has changed for ISVs recently.

In March, I visited Microsoft's headquarters. This is something I could only dream of as an ISV as recently as six years ago. It was always the ERP resellers that ruled supreme. Over the past two years, this has changed dramatically.

So why the shift?

A new vision for ERPs

We all know that a lot has changed in Microsoft's portfolio over the past two or three years. The launch of Microsoft Dynamics 365, and all the subsequent roadmap changes have been discussed in depth elsewhere, so there's no need to go over that again.

What I want to focus on is the upcoming Tenerife release. This product is significant, and not only because of the move toward on-premises and cloud-based version of a single product. I believe that it's the Common Data Service (CDS) that holds the answer to the question above. 

With the introduction of the CDS, Dynamics isn't so much a traditional ERP system as a suite of specialized products, all powered by the Azure platform delivering hosting and additional services. Sales, service, operations, finance: each has a specialized application that users can turn on or off depending on their business needs.

Supporting transformational change

There is a key theme that I feel underpins both the CDS and the other defining characteristic of Tenerife, the cloud/on premises/hybrid flexibility that grants users an unprecedented level of freedom.

Previously, changing your Dynamics setup could be a big decision, with a rough transition period. If your company outgrew NAV, upgrading to AX made sense, but it also made for a large and potentially expensive project. The same is true for implementing new add-ons: depending on the solution in question, the upgrade could take a lot of time and money.

With Tenerife, these rough transitions could be a thing of the past.

A new approach for the new status quo

Today's businesses are more intelligent, dynamic, and diverse than ever before. They expect ongoing change and adaptation and need an ERP that makes changes much more fluid.

That is exactly what Microsoft is achieving with Tenerife. If a growing business finds it needs more secure, robust hosting for their previously on-premises ERP, they can plan that switch to a cloud or hybrid solution quickly. If the business needs to expand its functionality, it has access to an app marketplace full of plug-and-play solutions for a wide variety of business challenges.

In short, the Tenerife release is going to make it easier for businesses to customize their Dynamics systems to meet their business needs. As a business, your five-year plan doesn't need to stand in the way of following the path that you prefer right now. There's nothing standing in the way of experimentation, iteration, and improvement.

A platform for success

Between the CDS and the hosting flexibility, the Tenerife release will grant users an unprecedented level of freedom. And that's why I believe that it is the perfect example of an ongoing shift within Microsoft.

Tenerife isn't just a solution. It's a platform for solutions.

I see Microsoft moving their focus from creating specialized solutions, to creating platforms that their users can accelerate on.

Think of Windows, for example. Consumer editions are no longer as expensive as they were 10 years ago. But as powerful as the platform is, it won't offer all users everything they need to achieve their goals. Maybe they need cloud-based storage so that they can work across devices - so they install their OneDrive app. Maybe they want access to their Spotify playlists without having to use the web player. Once again, they turn to the app store...but this time for a third-party app.

Instead of trying to cover all possible bases (music streaming, advanced graphic design, and so on), Microsoft's Windows platform makes it easy for users to find and install specialized third-party solutions to meet their needs.

And that's exactly what's happening with Tenerife.

The new role for ISVs

Providing a platform and easy access to specialized (and vetted) third-party apps is the logical next step in an increasingly dynamic, diverse business landscape. It means more freedom and flexibility for businesses. It also means that add-ons, or apps, are going to play an even more important role in the Dynamics 365 landscape.

And this means that the role of the ISV is changing.

As businesses come to rely on our solutions not just for nice extras, but also for integral parts of their business (such as, in my own case, their web store), the pressure is on to keep up with new releases while also living up to the strict standards set by Microsoft.

With ISVs moving from the outskirts of the Dynamics experience to the very heart of what makes this new platform so effective, it's little wonder that we're seeing Microsoft focus more and more on guiding and stimulating their community of ISVs.

The configurable future

A platform that offers users the power and flexibility to create their perfect system - it almost sounds too good to be true, but most of the pieces are in place to make it a reality.

Those pieces include Tenerife (planned to be released in mid 2018), CDS, a carefully curated and the AppSource marketplace. And a key component will be the ISVs, dedicated to providing outstanding specialized solutions.

The final piece will be the users themselves. ERP customers must change their way of consuming applications. Right now, paying for customizations is the norm. Instead, users need to think of standard solutions which can be configured and connected to achieve the desired results. To make this transformation a reality, ISVs need to collaborate more to make the connections possible. We need to find opportunities to embrace open standards. Only then will users truly benefit from everything that this powerful new ERP ecosystem has to offer.

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About Arno Ham

Arno Ham is CPO of Sana, an ISV that creates integrated e-commerce software for Microsoft Dynamics and SAP. 

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