Dynamics 365 – Kicking the Hornets Nest

When left alone, partners tend to buzz quietly in their nests, working on their customers and offers. Lately, Microsoft has made a habit of kicking those nests, starting with the announcement of Dynamics 365 last year which sent the channel hornets flying out of their nests. Zipping all over, and bumping into each other, basically trying to figure out which way was up. Just as they were settling back down in their nests, Microsoft kicked it again.

A growing buzz

It started this morning at the Directions Conference in Orlando, during the keynote. Marko Perisic teased out a new model for the product formerly know as Dynamics 365 for Financials and Operations Business Edition, formerly known as Dynamics 365 Financials, formerly known as Project Madeira, formerly known as Navision (NAV). The new code name was “Tenerife”, which will eventually be replaced with a permanent name… Marko seemed to be leaning towards “Navision”. Not everyone in the room seemed to grasp what he was saying, but some did, and a quiet buzz started growing. At 10:30 a Q&A session kicked off in a medium sized room, that was about 80% full, with Marko and Kristi Hofer to clarify what was presented in the keynote. Marko opened the session by saying that “Business Edition is no more“. The buzzing grew louder. He also said that “Tenerife” was the new partner platform for vertical solutions, that would be available exclusively from Partners, and that all deployments would be white-labeled. You could not call it Dynamics 365 anymore, instead it might be “Mikes Accounting Software…powered by Dynamics 365”. The buzz grew louder. He said a couple of other things that he later walked back, so I won’t repeat them here. They had scheduled a repeat of this session for 1:30 in a smaller room, but the buzz had grown to the point where they moved it back the the medium room and by then it was a standing-room crowd. Clearly, neither Marko nor Kristi were expecting this level of buzz, which by this point you could hardly hear over.

Customer Segmentation by Size is Deprecated

So, even though we have just been getting our heads around the 170 page PowerPoint on licensing based on customer size; that is all now out the window. There are no more SMB, or Enterprise or any other customer size categories. The new model will be feature based. For example, there will only be one Sales App. It will include some basic capabilities. It is not called SMB (Business Edition), nor is it limited to small customers. An 8,000 user company can get this app, and pay the same per user price as a 1 user company. It was just a few weeks ago that the development team building the Business Edition Sales App, was paranoid about Enterprise customers trying to take advantage of BE, which led to various artificial limitations being placed on it… now that is all gone. A huge “Nevermind“. Instead, if a customer, of any size, needs more features than are included with the basic app, they will pay a higher price for those features. What additional features, are their tiers, or are they à la carte, prices? All TBD. This same principal will apply to all of the other Apps that are a part of the product formerly know as CRM. If you ignore the fact that this is a complete pivot from what we had been operating under up to now, and the disruption this may be causing your marketing plans, etc. It really seems to me, like this is what they should have done, when they launched Dynamics 365 in the first place: Pay for what you use.

Marketing for Enterprise

The new Marketing Application follows this same path, so it will also be available to any size customer. Many partners had been whining that it should not be limited to just Business Edition, well, you got your wish, because there is no Business Edition anymore. It’s all apps for anyone! I plan to write a post specifically on this App shortly.

Tenerife

A lot of explanation was centered on Tenerife, which makes sense as this is a Navision conference after all. Marko has never been one to shy away from drop-kicking the hornets nest as far as he can. He drops these huge bombs, and then gets this smile on his face as the partners all go nuts, as though he knows that once they have all the details and facts, they will settle down, and be 100% on-board. He has always been more of a band-aid ripper, with no patience for slow playing the impacts. Tenerife will be the new app development platform for apps that run on the product formerly known as many names including NAV. All existing ISV solutions for NAV will need to be transitioned over to this new model, which was described to be a fairly simple process. There are several other aspect to this Tenerife thing, and it is only for the NAV extensions, not CRM or AX, so if you are in that space, I suggest you investigate this… quickly. The most significant thing to partners was this idea that NAV will no longer be a product that is sold to customers, instead, whatever you build in Tenerife will be the product that you sell to your customers This includes one-off customizations for a single customer, or multi-customer apps that you might build for AppSource. There will be no ERP product called Financials or NAV or anything else that is sold by partners, instead the product you sell will be your own white-labeled offer. They did concede that it could say “Powered by Dynamics 365” but it cannot be called Dynamics 365. This seemed to generate the most head scratching in the room, and a fear that the Microsoft branded coat-tails were being taken away from partners.

The New Platform is….

The Common Data Service. It really feels like these other “platforms” that we have been selling are being superseded by the new all-up-and-under-everything platform know as the Common Data Service. This is the glue that binds, or will bind, all of these “Apps” together, and makes this whole grand plan work. If you are a bizapps partner, and plan to continue to be one, you better bone up on CDS.

Will the fog once again clear

When Microsoft first announced the humongous change that was to be called “Dynamics 365” last year, the entire channel freaked out and ran around for a month like the world was coming to an end. As the details unfolded, it ended up being basically a licensing model change. The world remained intact, in fact, barely changed. When they announced the Business Edition Sales, again the partner channel was buzzing with confusion about it, and it turned out to be… an “App”. An App on the same platform we already know (an app BTW, that appears to have been deprecated before it even launched). So now here we are today, feeling like Microsoft is playing three-card monte with us again, lots of buzzing and scowling faces behind firmly folded arms. My guess? Over the next few weeks, as the messaging gets refined from today’s blurts, we will once again find ourselves thinking, “Is that what you meant? Why didn’t you just say that in the first place?” I am starting to think this is a strategy, scare the crap out the partners, so that later, whatever you were actually trying to do, seems awesome in comparison.

 

We should learn even more on Wednesday when Kishan will be presenting the app formerly known as Business Edition Sales. I am assuming this will be the new Basic Sales App… available to anyone, but I’ll let you know.

 

BTW, in case you are wondering why I feel so bold to write about this, this was all non-NDA. In fact in the second Q&A, I was sitting with Jason Gumpert of MSDynamicsWorld, whose fingers were dancing across his laptop keyboard the whole time, and has already published his take here.

Clarification – 09/19/17

So it has only happened a few times in the past, where I write a post and get a call from Microsoft. Today was one of those times. They have each started a similar way, “Hey Steve, I love your blog…but“. Sometimes, just a missed comma can change the entire meaning of a sentence, and sometimes that missed comma can cause a bunch of phones at Microsoft to blow up. Kristi was kind enough to point out my missed comma this morning. Just to be clear, I am not an investigative Journalist writing exposés, I am just a partner expressing opinions. I am also an MVP and sit on more than one Partner Advisory Council so I maintain a wide berth to NDA stuff. While I might like poking fun at the occasional missteps, I am a huge Microsoft fan, and there is no way a company of this size is going to shift from where they were, to where they plan to be, without a few missteps. So with that background, I was more than happy to clarify anything.

I left the post above as published, but the main confusion seems to stem from my sentence “It was just a few weeks ago that the development team building the Business Edition Sales App, was paranoid about Enterprise customers trying to take advantage of BE, which led to various artificial limitations being placed on it… now that is all gone.” What I meant was that the paranoia was gone, not the limitations. What kinds of limitations, if any, are not yet determined… at all. In fact anything to do with pricing or features or limitations, is TBD. This is a big pivot, and will require some serious internal study by Microsoft to sort out these things for the GTM plan. I did confirm that the current SMB Promo pricing for Sales and Sales/Service will remain, at least until Spring 2018, when the new plans are fleshed out, so keep doing what you are doing… nothing to see here… yet.

On the Marketing side, I should also clarify some things. I think the new Marketing App is great, and I think it is going to cause the current leading third-party tool some real challenges in the small to mid-market space where they play. But it is not, nor was it ever intended to be, an Enterprise level Application. There is really no comparison to what the Marketing App provides, or the third-party app for that matter, vs. the Adobe Enterprise Marketing offering… night and day.

Kristi also said that James Philips will be writing an “Official” post on this whole thing soon, and that her team is working on a FAQ. Obviously James’ facts trump Steve’s opinions, so guide yourself by his words, not mine.

Lastly, I have to give credit to Neil Benson, who in a private message to me some time ago, predicted this exact scenario for Business Edition. This led to a side bet, that I have now lost, requiring me to publicly declare that: “I am a Moron”.

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  22. Yet again a very large corp feels it is able to change the tide of customers and their businesses. Another classic case of the tail attempting to wag the dog. Just as MS were beginning to reach the top they feel they have sufficient traction to enforce their will on the re sellers and customers. Changes like this only make customers re-evaluate who they trust and if MS would like to rule the world of ERP in the cloud and make the money on their cloud solution they need the customers to trust them, not to keep changing the rules and holding customers to ransom as it is too hard to move to another vendor. It is precisely this reason that customers I speak with are very nervous about moving to a cloud solution that they have no control over. MS will kill cloud delivery and the whole thing will turn full circle by changing the rules and doing this too often. ERP users want their system to work today, as it did yesterday, and have the ability to change as and when their business needs to not when MS chose to.

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