Dynamics 365 goes PaaS with PowerApps


It was less than a year ago… I was asking Dynamics 365 leaders about the possibility of Dynamics 365 being offered as a “Naked” platform. The strategy, that has been successfully employed by Salesforce.com for years, did not seem like it was on Microsoft’s radar. I was told “Never gonna happen”. Fast-Forward to a month ago… It happened.

Seems Like Yesterday

It wouldn’t be a post by me, if I didn’t first take you down some long-winded path of how we got here, before I get into “here”… and this is a post by me. So we’re going to go back in time, to the day before “Dynamics 365” became a brand. The product I am referring to was called Dynamics CRM Online. This was Microsoft’s answer to Salesforce.com, a CRM that was Cloud from day one. I won’t go all the way back to 2011, when Microsoft clumsily stepped into the ring with Salesforce. Those early bouts were too painful to remember. But even though Dynamics kept getting knocked down, they kept getting back up. From first-round knockouts, Dynamics persevered… progressively making it to three rounds, then five, then eight, up to the occasional draw. For the ardent battle watchers, Salesforce.com is still winning, but their corner must be concerned about the trajectory of Dynamics.

Just another acquisition

Microsoft was on an acquisition tear a couple of years ago. In a seemingly desperate attempt to shore up their weaknesses against the reigning champion, Microsoft bought a bunch of crap to bolt-on to Dynamics. Since most of these have gone down the drain, how is it that Dynamics is closer now to knocking out Salesforce, than ever before? It is actually because of Field One. Huh? Field One was a third-party solution that provided field service capabilities for Dynamics CRM Online. Were these “capabilities” the secret weapon? Not even close. But there was something unique about the Field One acquisition that ultimately led to a huge light-bulb going off that changed everything.

Nativisation

I know, I made up another word, deal with it. In the Dynamics world, when it comes to third-party solutions, there is this idea of “Native”. What it means is that the solution was built within Dynamics, using Dynamics as the platform. The former Microsoft Dynamics Marketing, Parature and other acquisitions were not built on the Dynamics platform, Field One was. A better known example of a Native solution is ClickDimensions. The evidence is undeniable, Microsoft’s success with Native solutions, versus trying to incorporate non-native solutions, is clear. In case I lost you, Native is better. I am sure Microsoft would love to have figured this out, before they had squandered so much capital on non-native options… but some things just have to be learned the hard way.

They Know Now

With the Field Service example, Microsoft dove into their own development capabilities to build Project Service.. kind of a fork of Field Service, as both share many resources. Coming some time later, but with the same native-built mindset, was Dynamics 365 for Marketing, but I am getting ahead of myself. Let’s talk about the “pivot”.

Pivoting

A “Pivot” in the software business is when you change directions. Sometimes you pivot because you are failing, other times you pivot because you see a better path than the one you were on. Dynamics has been a pivoting machine. This includes “re-pivoting”, where you pivot back from a previous pivot, like the “Business Edition ‘” pivot(s)… but I digress. A major pivot that Microsoft made, was to rebrand all of their disparate Dynamics offerings under a new name “Dynamics 365”. Sometimes one pivot, leads to other pivots. In this case, for Customer Engagement, in particular, it was the idea of separating apps.

Separation Anxiety

It starts with licensing. Dynamics 365 included Sales, Service and Marketing as a complete, single SaaS offering. This Field Service thing was a separate add-on solution, so It was priced separately, as was the Project Service offering. Seems like it makes sense to go ahead and separate the other workloads as well, so suddenly Sales and Service are licensed separately. Unfortunately, Sales and Service were not “separated”, from either each other, or the underlying platform. No problem, a paper license will solve that! So, if you are keeping up, we now have separately priced workloads. We were hearing from Microsoft that Sales and Service would eventually be physically separated from each other, as well as the platform, but it was not clear at that time, how that would be accomplished.

The CDS Pivot

The CDS Pivot, among other things, provided the means for Microsoft to untangle Sales and Service from the platform. I am not sure at the time of this writing, where they are on the separation of Sales and Service from one another, but at least they got the twins out of the mother. And what is the mother? CDS (Common Data Service). CDS is the underlying “Naked” platform upon which Sales, Service, Field Service, Project Service and the new Dynamics 365 for Marketing are installed upon. These “apps” as we now call them, are the “First-party” apps, the ones that Microsoft owns. But wait a minute… did I say Naked?

The Naked Platform

Today, as a result of all of this pivoting, we now have a new option. We have the ability to provision the Dynamics 365 platform, without any first-party apps… a naked platform. Okay, it is not completely naked. It includes what is known as CRM Prime, think of that as some basic building blocks. Things like Accounts and Contacts as record types (entities), as well as functional things like Activities, etc. But no Sales specific things like Leads, Opportunities, Quotes, Orders, and Invoices for example. Almost naked. But it does include the XrM development “engine”, meaning you can build whatever you want on top of those basic blocks. This platform is available under the name PowerApps, and in particular “Model-Driven” PowerApps. The license required to utilize it is called the PowerApps P2, and it costs $40/month/user. If you are thinking that this sounds a lot like that thing they said they would never do less than a year ago, you would be right. It’s called a pivot.

Who Cares

As a customer, with Sales related needs for example, you might be wondering, what’s the point? Obviously you need the robust Sales capabilities of the first-party Sales app, otherwise CDS is just a glorified Rolodex. That would be a fair read. In the large majority of cases, I see the first-party apps as being the appropriate starting point. Why on earth would you spend the money to have someone build all of that on the naked platform, if it already exists? It would not be to save money, that’s for sure. The first-party apps are highly evolved, sophisticated solutions. It would not be economically viable to attempt to replicate them, to save a couple of bucks. But what if your needs are unique?

I know, everybody thinks their needs are unique. From talking to thousands of customers over the years, I can tell you, what most of you think is unique, is just configuration. But occasionally, you will find that situation where the first-party app will require so many development level changes, that there is not much left of the first-party app. In many of these cases, I see where it would be more economically viable to “roll your own” on CDS.

Protection Pivot

So Microsoft’s first thought when all this came about was “OMG, Customers might build their own solutions and not buy our First-party apps”. So up until very recently, it was a requirement that to get CDS, you had to buy one of their first-party apps. To me this seemed like a lack of confidence in the value of their first-party apps. Salesforce is not lacking any confidence, they have had a platform-only license for years, and it has not hurt their first-party apps. In fact, it probably drove many first-party app sales. As they thought this through, it seems Microsoft came to the same conclusion, and we had another “pivot”.

Mix and Match

For the customer, it is not a “one or the other” option. Sure, you can go with pure CDS and build everything from scratch. But what if the first-party Sales apps works great for you… but the “Service” app does not? No problem, the PowerApps license is included with most of the First-party apps. Meaning you can use the Enterprise Sales App for sales, but build you own unique service app on CDS. BTW, they both are running on the same underlying database, meaning your same Accounts, Contacts etc..

PowerApps is PaaS

I don’t know that I have heard Microsoft refer to Model-Driven Powerapps on a bare CDS as a “Platform as a Service” (PaaS) offering, but that is what it feels like to me. Just one more area where Microsoft is leading with “Platform”. Like I said, for certain customers, this will be huge, for most it will be “So What”.  But one camp that is drooling at the mouth is ISVs.

Powered by

PowerApps is Microsoft’s answer to Salesforce’s Force.com platform. A quick internet search for “Powered by Salesforce” will return a bunch of ISV solutions. Most of these solutions are vertically specific, highly targeted applications. This is an area where Microsoft would like to land some punches, and PowerApps is a new fist. I foresee, in the very near future, “Powered by Dynamics 365” will return similar results. Specific Vertical applications, for which the requirements were not contemplated by the first-party apps.

So we start a new championship bout, the announcer says “Let’s get ready to ruummble”… ding, ding  .

3 Comments

  1. Ajay

    Powerapps is great but MS needs to come out with per organization pricing and offer partners a generous commision to sell it. Look at companies like outsystems or Mendis for example. Most customers don’t want to go with a per user pricing model. I also think MS needs to do a better job of marketing their product(as always) just look at some of the negative reviews on google play store for Powerapps which may or may not be true.

  2. George R Wong (@georgierayray)

    Powerapps is great but MS needs to come out with per organization pricing and offer partners a generous commision to sell it. Look at companies like outsystems or Mendis for example. Most customers don’t want to go with a per user pricing model. I also think MS needs to do a better job of marketing their product(as always) just look at some of the negative reviews on google play store for Powerapps which may or may not be true.

  3. Mike Dickerson

    Making Dynamics “the data substrate” for business (James Phillips’ words) is a powerful strategy. PowerApps is an early move in what are hopefully a series of opportunities to leverage the CDS architecture model and strategy.

    The ability to develop and interchange “native” apps across Sales, Marketing, Talent, Ops, Finance, Service and other functional domains will be a true game changer for business productivity. At the Gartner MarTech conference two weeks ago, the biggest take-away is that number 1 barrier to effective Digital Marketing and Sales remains the challenge of integrating and normalizing data from disparate apps and disconnected functional data silos. Other functional domains will benefit from connecting and analyzing data from what are now different data silos.

    Looking down the road a bit more, there is more goodness from the CDS evolution beyond enabling more effective cross functional analysis and reporting; a harmonized data scheme facilitates Machine Learning and AI which will produce awesome new insights, products & packages. Most companies can’t yet imagine what those ML and AI buzz words really might mean because getting the data in the right format and place falls into the “way too hard” bucket.

    SFDC is buying Mulesoft in an attempt to catch up to what Dynamics is well down the path of doing in this area. The power of this CDS strategy will become manifest in the next 2 -3 years, and having reference first party native apps in those 6 functional domains will help make the case for the CDS strategy all the more accessible. It may even help build the eco-system for the benefit not just of MSFT and Dynamics Partners, but also for some folks who create alternative “native” Dynamics apps as well ?

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