Podcast Review: Measuring Microsoft's biz apps market progress, from ERP to the citizen developer

August 30 2018

Josh Greenbaum (@josheac) of Enterprise Application Consulting, joined the MSDW podcast to talk about Dynamics 365 for Finance and Operations and its place in today's enterprise software market. Josh has covered Microsoft and the rest of the enterprise business solutions market for many years and was on-hand at Microsoft's recent Business Applications Summit as part of an analyst briefing that coincided with the event.

The state of Microsoft Dynamics

Recent figures about Dynamics 365 implementation growth suggest to Greenbaum that Finance and Operations projects tend toward complex implementations rather than the smaller and simpler upgrades from systems:

I think the backdrop is that been rather parsimonious about handing out any real numbers. Frankly, I've been pleasantly surprised. Finance and Operations seems to have really solid momentum. The number of live customers and the number of people in production is impressive given it's only been in the market a couple of years, with 600 across multiple geographies. Some people look at a 12 to 18 month implementation timeline as a bad thing —thinking of the mythical six week implementation.

Greenbaum suggested that many of the go-lives now in-process are more complex than the first ones undertaken when D365FO was released.

By the very nature of it, we may see a slight lowering of the curve in-terms of go-lives because they're more complex projects. Another thing to juxtapose to that is the number of new logos versus existing customers. Two-thirds of the customers working with Finance and Operations are net new. Often the net new logos—to be fair—are QuickBooks remediation projects. It is important for all of these transitioning vendors to move their on-premises base into the cloud. As these numbers start to increase, how many are moving from older AX into this new world? How much of the data do you move? Lots of processes need to be reengineered or rethought.

Greenbaum said that he brought up many of these points to Microsoft executives at a recent analyst briefing.

They are also suffering from a lack of information that they can go public with and share. It helps those of us in the market place of ideas to have this comparison. Is there real momentum? Are other companies buying into it or is it just market slogans and slides?

Partners also need this guidance from Microsoft. They are under significant pressure to find ways to invest in selling the product and getting AX 2009 and AX 2012 customers to adopt it.

This is an important inflection point in the market. This growth in cloud is happening across the board. Finance and Operations is looking at some serious competition and needs to nail its position in the market against NetSuite. They now have a new owner, but are a significant market force. There's a lot of interest among SAP customers looking at other products for spoke and hub functions. To have Dynamics be able to stand up and make some solid statements about market momentum is very important. To shake companies loose from the default mode, you have to have something to say. What said to the partners probably resonated.

Implementations and PowerApps citizen developers

Oracle, Microsoft, and others in the cloud era are keen on getting implementations right because the next milestone is the renewal, said Greenbaum.

As MSDW reported earlier, when Microsoft's Alam spoke to partners about D365FO progress at Inspire, he indicated that customers are increasing their software spend as they move through the process. How to get customers to renew and renew at a higher level is key in the cloud world. Microsoft is pushing the concept of building new apps in a low-code environment and embedding them in Dynamics 365 applications to expand capabilities and ensure renewal.

Greenbaum sees the changing approach to extensibility stemming from the limitations to customizations in the multi-tenant cloud model, which breaks down if different groups are customizing and drives home the idea that digital transformation needs to become pervasive.

The best transformations are led by real workers… coding it themselves…We can't do transformation at the cadence we need, going the classic IT waterfall model. Microsoft's done a really good job .

The PowerApps model includes the Common Data Service, which has the potential to simplify integrations.

You can build PowerApps with CDS without worrying about the data format…the other advantage is bringing in lots of other technologies from the Microsoft offering into these environments.

Greenbaum added that a wide array of tools, such as IoT, HoloLens, and machine learning can now be leveraged in other environments like Dynamics, which gives an advantage to Microsoft customers and partners. But he notes that taking advantage of these tools requires the right mindset, partnerships, and approach – both by Microsoft and its customers.

There's still some really low-hanging fruit…to make sure this implementation success is baked into the process. missing an opportunity make a stand and be the best at implementation. We can't go along in the old model of collecting revenues…and ignore whether customers are implementing.

Greenbaum sees Lifecycle Services as a missed opportunity in the three way struggle between Azure, AWS, and Google Cloud Services.

You as the customer would really like management capability to sit on top of and differentiate workloads. There's up-leveling of the management of the cloud and I think Azure has the best options. Right now it's a race to the bottom with speeds and feeds, which doesn't add strategic value to the customers. Changes in Dynamics left a few main features missing in action or missing executive sponsorship. When it comes to running different products in Azure—users want a single pane of glass to make sure they're synchronized.

AI & process automation

Greenbaum weighed in on widespread talk in the market about machine learning and process automation:

I see a lot of early stage products. There's a lot of focus on using machine learning to automate mundane and boring tasks and make it better for the humans. Some of this is fairly simple stuff like invoice reconciliation. We can use machine learning to do a lot of the grunt work. A machine learning approach can really take a lot of drudgery out of it, but we still need a human in charge.

"Supply chain is another example…you start looking at where are the anomalies," he added. Systems can spot seasonal or supplier anomalies, or issues such as tsunamis and earthquakes that lead to delays. "We can take the machine out of the human."

"The hardest problem is getting good data to train an algorithm. Bad data makes things really not work right." Greenbaum gave the example of facial recognition technology that was found to have only been trainedy on white faces. "There's no way we can 'big bang' our way through this any time soon or maybe ever."

FREE Membership Required to View Full Content:

Become a MemberLogin
Joining MSDynamicsWorld.com gives you free, unlimited access to news, analysis, white papers, case studies, product brochures, and more, and it’s all FREE. You’ll also have the option to receive periodic email newsletters with the latest relevant articles and content updates. Learn more about us here
About Eamon McCarthy Earls

As the assistant editor at MSDynamicsWorld.com and MSCloudNews.com, Eamon helps to oversee editorial content on the site and supports site management and strategy. He can be reached at eearls@msdynamicsworld.com.

Before joining MSDynamicsWorld.com, Eamon was editor for SearchNetworking.com at TechTarget, where he covered networking technology, IoT, and cybersecurity. He is also the author of multiple books and previously contributed to publications such as the Boston Globe, Milford Daily News, and DefenceWeb.

More about Eamon McCarthy Earls