Let me caveat this post with a couple of things; first, I am not an ERP partner, so I don’t actually have a dog in this fight at the moment. Also, none of the following came from anybody at Microsoft, it is purely out of my own head and my opinions from my reading of the tea leaves as I see them. I am also sure I will piss a few people off, but that has not stopped me before.
The Emperor’s New Clothes
In this fable, the Emperor is convinced that his new invisible clothes are “awesome”, and as he walks naked around his kingdom, no one dares say otherwise. It reminds me of when I hear Microsoft attempt to calm the fears of GP partners today, by telling them that their platform is not a target for elimination. I’m not sure if the SL partners are even hearing anything.
Over the last month Microsoft has been trading places with Apple as the world’s most valuable company. The difference is Apple’s growth rate is declining, where Microsoft’s is increasing, so it won’t be long before they “own” that spot. The way they got there was with the Cloud, starting with Office 365 eventually overtaking every other productivity application on the planet. Right on it’s heels was Azure, from nowhere to neck and neck with Amazon as the largest cloud infrastructure provider on the planet. Next is Business Applications and the Power Platform. Given the success Microsoft has seen with cloud, do you really think they are going to continue to invest in, and support on-premise technologies for long?
The Hybrid story feels like making lemonade out of lemons. The fact that Microsoft can support you both on-premise and in the cloud is an advantage today, only because of laggards that have not moved to cloud yet. For some, it is a good story today, but that story will not be needed for too much longer. One of Microsoft’s biggest on-going motions, is moving their on-premise customers to their cloud, once they have enough of them over there, the Hybrid story will fade away.
In Poker, a “Tell” is something that a player does unconsciously, that an astute opponent can spot, that telegraphs their position. Back at the Directions NA conference in Orlando in September of 2017, Marko Perisic stunned the audience by saying something along the lines of “Tenerife” will become a white-label only solution. Again, with no dog in the fight, I wrote about it at the time, which started a shit storm. It was later that I learned that this concept was also being floated at Inner Circle, an NDA environment, at the same time Marko was speaking, at a public event. I don’t know this for a fact, but I think Marko saw the writing on the wall and spoke out of turn, intentionally to rally the NAV troops. What was the writing he saw? I think he saw Phillips looking at all of these ERPs and thinking out loud, “why do we need all of these?” Shortly after, Microsoft walked all of this back, which I wrote about here. It seems Marko was at least temporarily successful in thwarting this idea.
Marko Go Bye Bye
Marko recently announced that he is leaving Microsoft. Again, I have no knowledge, but I am guessing he was asked to leave. Tenerife, now Business Central, the cloud version of NAV, was brought under Muhammad Alam, the PM for F&O, the cloud version of AX. This is interesting. While for small or large customers there was clear distinction between the platforms, for customers of a certain size in the middle, Business Central and F&O competed. They both now fall under one leader…
CDS & Codebases
CDS 1 gave way to CDS 2, which was the existing XrM platform that sat underneath Dynamics Customer Engagement. Smart move, one less database to deal with. Since that move, CDS has sprouted many more branches: canvas apps, connectors, flow, platform licensing, industry accelerators and the list continues to grow. I think it is clear that CDS is a big bet for Microsoft, and the biggest so far for the Business Applications Group. Most of this is a common codebase, as well as common data model riding atop a common database. But then here we got these two ERPs, each with their own codebases and schemas, that want/need to jump on CDS, in a “real” way. Imagine a Common Database Schema under both your CRM and your ERP? I would call that a Power Platform! But we’re not quite there yet. For the time being we have some hacky “connectors/integrators”.
Meat on the Bone
Getting an ERP stood up fully, and directly on CDS is going to be a significant undertaking. Is Microsoft really going to do that twice, once for F&O and again for BC? Remember Phillips’ first reaction when he walked in the door, “Why do we need more than one ERP?” Maybe we don’t.
Steve’s Talking out of his Ass again
I got a lot of heat from NAV partners the last time I even suggested this. I get it, you built an entire practice around the product, and you have a bunch of happy customers, and it generates a bunch of revenue. The same can be said for GP, and I think you have to thank Marko’s herculean efforts for NAV not following GP towards the path to exit. But the product champion has left the building. I had also heard that F&O would never work for anything but the largest enterprise customers, which I think was a hope more than a reality. We proved with RapidStart that a small customer could be successful with an Enterprise focused app on the Customer Engagement side, so I am sure it could be accomplished similarly with F&O.
Why F&O instead of BC?
I could be wrong, but I sense that F&O has a shorter path to standing up on CDS than BC does, and could ultimately handle a broader range of customer segments. If in fact BC has a shorter path, then maybe this flips, but still… only one needs to go down that path. The codebases will continue to be different but the data will reside directly in CDS with a Common Data Model.
Is this Project Green again?
To be honest, I don’t really know what “Project Green” was all about. The best I can tell, it was an effort to merge several products into one. So to those of you who think I am tossing out a new scary idea, clearly this idea has been around since long before myself, or Phillips were involved with Dynamics. I don’t now if the Project Green effort actually failed, or just failed to launch, but clearly as far back as 2003 Microsoft was questioning the need for multiple ERP solutions.
The white label idea, that was proposed in 2017, was not a bad option for attempting to keep the partner and customer base, while pulling NAV out of the mainstream D365 effort. NAV Partners did not agree, and blew up the phones over their potential loss of the D365 brand. With Marko leading the pitchfork wielding base, James clearly decided to save that fight for another day. Is that day coming soon?
The huge opportunity still exists for an end-to-end, fully connected enterprise solution, that spans Customer Engagement and a single ERP, all of which is extendable by citizen developers using the Power Platform. No other vendor has grabbed that brass ring yet, and Microsoft is reaching for it. How does more than one ERP solution make that easier to get to? It doesn’t. Back in 2017, there were still a lot of things to sort out with CDS. Today, most of that is sorted, and I expect to see Microsoft focus hard and put the pedal to the metal on it.
The last time I wrote about this, a bunch of NAV partners said things like, “You suck, you’re wrong, I’m unfollowing you”. They were at least temporarily right!