Will Microsoft’s Dynamics Business Remain Indirect in the Cloud?

This article is adapted from the WPC 2011 Business Report by Dynamics consultancy TerDege.

Microsoft is experiencing the most exciting phase to date in its 36-year history. The transition from the traditional on-premise delivery model to delivering software as a service "from the cloud" is a challenge that transcends all previous challenges! This transition has implications for all conceivable areas of the business - from product development to marketing and from financial results to customer expectations. And not only Microsoft, but also Microsoft Dynamics partners are facing a radical transition!


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About Guus Krabbenborg

Guus Krabbenborg has been active in the world of business software for more than 25 years. He has held various sales and management positions at Philips, Digital Equipment, Navision Software and DBS Business Solutions successively.

Since 2007 Guus is co-founder and partner in Partner Master Class, the Dutch PDC. In a growing number of countries in Europe and Asia Pacific this company offers training and coaching in the business areas that are part of the Dynamics Partner Academy.

Since 2012 Guus is also co-founder and partner in QBS Group. This company acts as a Value Added Distributor (aka Master VAR) in the Microsoft Dynamics channel. Today, QBS works with over 400 partners in 17 countries all over Europe. That makes QBS Group the largest partner eco-system in the Microsoft Dynamics channel worldwide. Guus carries responsibility for business training, partner coaching and inspiration.

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Challenges of the Cloud

Thanks Guus for introducing this topic, which is indeed one of the most significant to face Dynamics Partners worldwide.

My own research into cloud adoption backs up your observation that Microsoft will have to radically re-invent itself on the Service delivery side in order to make it work. This is no small feat.

So, if they succeed, does that mean the reduction of margings for VARs?

If they fail, does that mean the VARs are safe?

Unfortunately the answer to the first question is "yes" and to the second "no". Or at least it will be "no" to the second unless some major changes are made to the MS Partner Program. Following your advice, again, look at what SAP are doing with ByDesign and how they are compensating the channel.

Lastly, I agree again that we need to look at the "VA" in VAR. Customers will always pay for value - yes they will have preferences as to whom they pay and what the terms are - but they will pay. This opens up further discussions about Marketplace and Verticals, of course. Interestingly it will be the NAV and GP resellers who could win biggest here. The AX channel may only be left with delivery.

...behind every cloud...

Partnermargins in the cloud

Thanks for your feedback Cloudlight!

I do believe there will be pressure on the marging for partners that add no or only little value to the standard Dynamics offering. With that it's important to realize that what is of value in the cloud today could be a commodity tomorrow!

On the other hand the partners that do deliver real customervalue the margin will increase. That's the other side of the same coin.

So the message for Dynamics partners is quit simple: climb higher in the value tree and don't wait too long with that!