Dynamics 365 – Dead is a Strong Word

My fellow MVP, good friend and co-collaborator on PowerISV, Mark Smith (aka @nz365guy) is on a “Shock and Awe” campaign that opens with the phrase: “Dynamics 365 is Dead!“. But is it?

The House that D365 Built

At the recently concluded MVP Summit, Mark had the opportunity to lob his “D365 is Dead” grenade at Charles Lamanna for reaction. Charles seemed legitimately puzzled by the thought, and simply replied that “D365 pays for the entire Business Applications Team and Advanta campus“.  So… not dead.


I think we are a long way from knowing if Mark’s assertion will prove correct. What sometimes gets missed, is the second part of his proclamation “… long live the Power Platform“. Clearly Mark is placing his bet that the fairly new ability for users and developers to build apps directly on the platform, will eclipse the long-standing App offerings from Microsoft, that are built on the same platform.

Zero-Sum Game?

If anyone should be agreeing with Mark on this one, you would think it would be me. After all, we were one of the first ISVs to shift our applications from above the first-party apps, to under them. Our focus is 100% around building on the platform, avoiding the first-party apps entirely. We went “all-in” on the platform. Do I think this motion will overcome the First-Party apps? I do not. It is also not a goal or desire of mine. I don’t see it as a zero sum game at all.

A Fair Comparison?

There is no possible way that my relatively small team is ever going to build a more sophisticated sales application, or any of the other first-party apps, on the platform. You are talking about a vast repository of development and refinement, created over a very long time, and the hits keep coming with AI and Mixed Reality, etc. I hear some people try and compare on price in a sales conversation, that the platform license is a third of the cost of the plan! As though they discovered a coupon to get the same thing for 66% off. But, they are far from the same thing.


Clearly, sales of Dynamics 365 Apps are growing significantly YoY, and customers are not buffoons. Many have complex needs that can only be practically met by the power of the first-party applications. Is a partner really going to build their own Connected Field Service app on the platform? Force.com did not eliminate Salesforce’s Sales, Service or Marketing clouds, in fact, it was the opposite.

The Opposite?

The real genius of Microsoft releasing a platform license, was to grow the entire pie exponentially. As opposed to taking away from the first-party apps, I think apps built on the platform, by partners, ISVs or Citizens, will actually drive more first-party app sales. This is happening through two movements.

Movement One

I don’t have actual figures, but anecdotally, from my own experience, I think it’s fair to say, that well over 50% of all organizations, from SMB through Enterprise, are still using Outlook and Speadsheets. Most organizations have not even made the move to a legitimate Business Process Application of any kind, and instead torture Excel. I worked with one Fortune 40 company that was using Outlook as a CRM for a 15,000 person sales force. Does this company have the need and budget for a sophisticated application like Dynamics 365? Obviously. Would it transform their business? Clearly. Are they eager and ready to jump into an enterprise-grade solution? Often not. Could a simple business application be built on the platform, that would be significantly better than Outlook and Excel? Absolutely. Is that a net new customer for Microsoft that they would not have gained otherwise? No Doubt. Should I continue asking and answering my own questions? I think not.

Movement Two

The Microsoft Bizapps ISV community is growing, maybe not as fast as they would like, but the momentum is there. Many ISV solutions were built on top of, or depended on items in, the First-Party applications. These would be the ones that fall into Guggs‘ patterns of “Extend” or “Connect”. Many of these offered significant enhancements to the D365 Apps, others built their own end-to-end features on top of the first-party apps because that is what they had. So the second movement I see, is for certain ISVs to decouple their dependencies, and relaunch underneath the First-Party apps. This reduces the license cost to their customers, greatly expanding their addressable market, which again grows the whole pie. If a solution does not need anything from the First-Party apps, there is no need to price limit your market by sitting on top of it, if it is not necessary.

Addressable Market

Both of the above movements, will significantly expand the total addressable market by a factor of [insert big number here] . Will they siphon off some potential first-party sales? Sure, but they will also introduce a ton of customers to the Microsoft Business Applications Platform. A customer who starts with some departmental need filled by a custom PowerApp, and has a good experience, leads to more investigation by the customer. I have directly witnessed, with our own entry-level solutions, customers who then moved onto to add the full first-party Sales, Marketing and AI applications. This was not going to happen without an easy entry point. In fact, I feel comfortable saying that close to 100% of our customers, would not be using Microsoft Business Applications at all, were it not for the options we made available to them.

How can Microsoft Accelerate these Movements?

I know that the Bizapps leadership gets it. I know that the PMs who have P&L responsibility for the First-Party apps, do not get it. Right now, there are only two barriers to explosive growth. The first is artificial, first-party protection schemes. The second is prioritization of the tools and programs required for these motions to flourish. I also know that both of these barriers will be coming down very soon.

Add your thoughts below, just don’t pimp your stuff on my blog 🙂


  1. phoenixinobi

    So true Steve. Thanks for your insights. The Power Platform is meant to be an entry point for small businesses. It’s meant for creating some quick apps for testing some ideas first. Will it be useful for my sales team, etc. If it works then we can add more complicated but powerful features to those apps by utilizing a full first party app.

    • Steve Mordue MVP

      Thanks for the feedback, but I am not aligned with your thoughts about Power Platform being an entry point for small businesses. Enterprise businesses are all over it!

  2. Rik Dubbink

    Coming from the Dynamics 365 Customer Engagement side, I also get your drift. An I have a broader responsibility. Internally and towards Microsoft. The Dynamics 365 family name was launched to also give home to the proverbial prodigal son called Finance & Operations (never lost, only had to find the Cloud road…) and the stepsister Business Central (same story in the Cloud). That is a different platform story we need to tell customers. Still some steps to go however Power Platform is therefore not equal to Dynamics 365 first party apps in Customer Engagement…

    • Steve Mordue MVP

      Thanks for pointing that out Rik, I tend to see things through my CRM glasses, but for ERP, D365 is thriving!


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