Microsoft waffles regarding what's next for Dynamics 365 for SMBs

Microsoft seems to be rethinking its strategy around how to sell Dynamics 365 to small and mid-size businesses after pushback from some partners.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft's rollout of its Dynamics 365 CRM/ERP offerings has been a rather confusing one. This week, following the Directions North America 2017 event for Microsoft Dynamics 365 SMB users, some partners and customers seemed even more perplexed about where Microsoft intends to go next.


Microsoft originally announced plans for Dynamics 365 in July 2016. Officials said at that time that Dynamics 365 would be largely a repackaging and re-architecting of the capabilities of Dynamics CRM, Dynamics AX, and Project Madeira. Project Madeira, the codename for Microsoft's Dynamics 365 Financials component, was designed to be a new small-business software-as-a-service offering built on the Microsoft Dynamics NAV platform.

At this week's conference, Microsoft officials outlined plans for Dynamics 365 "Tenerife," which is the successor to Madeira. Tenerife is meant to be both the next version of Dynamics NAV (one of Microsoft's four different ERP product lines) and Dynamics 365 Finance and Operations, Business Edition and be available both as a cloud service and new on-premises release, as MSDynamicsWorld.com noted.

But the company's plans to allow partners to "white label" Tenerife didn't sit well with a number of partners, who were blogging and commenting on Twitter said they felt blind-sided and confused by that change in strategy.

As Steve Mordue, a Microsoft Dynamics 365 MVP blogged:

"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."

Partners would be allowed to say these offerings were "powered by Dynamics 365," but not actually Dynamics 365 itself, Mordue said, which created more concern and confusion.

But it seems Microsoft is now "walking back" this white labeling strategy, based on a September 21 post from Mordue. The company is reconsidering how and if to make white labeling part of the strategy, it seems.

What's less clear is what Microsoft is doing around branding of its still-unavailable Dynamics 365 Sales and Marketing Apps for SMBs (the so-called "Business Edition" apps). While some attending the conference seemed to take away the idea that Microsoft was dropping its delayed Dynamics 365 Sales and Marketing apps, it now appears that it might just be the "Business Edition" moniker that gets dropped, not the apps themselves.

As MSDynamicsWorld.com explained it, Microsoft's new plan to sell Dynamics 365 apps "as a composable suite," not with plans or editions -- which is the way Microsoft has been licensing and explaining these products for the past year-plus -- resulted in a "turbulent response."

It seems as if Microsoft does still plan to introduce in the Spring of 2018 the delayed "Business Edition" Dynamics 365 Sales and Marketing apps, as well as the Finance and Operations app -- which also has been delayed from October 2017 to Spring 2018. But it may not brand these apps as "Business Edition," based on reports from the Dynamics NA show.

I asked Microsoft officials for clarification as to what's happening with Tenerife and Dynamics 365 Business Edition, but haven't heard back so far.

Update (September 22): Microsoft provided an update on its revised Dynamics 365 strategy via a blog post published at 2 pm.

In that post, Microsoft confirmed that it is doing away with the "Business Edition/Enterprise Edition" distinction in its Dynamics 365 product line. Instead, Microsoft will be offering the suite of Dynamics 365 apps (Marketing, Sales, Service, Finance, Operations and Talent) to companies of all sizes. Microsoft will offer "different price points for each line of business application, based on the level of capabilities and capacity they need to meet their specific needs," the post said.

However, Microsoft still does plan to offer "an expansion of Dynamics 365 Finance and Operations Business Edition" ("Tenerife") that will, as previously noted, offer the full Dynamics NAV capabilities. This app will come in two flavors: A Dynamics 365 cloud app sold via the Cloud Solution Provider program (CSP) and a business app platform for ISVs allowing software vendors to embed this app in their own vertical solutions.

Microsoft also is not going to delay on the on-premises version of Dynamics NAV 2018 and will make it available "later this calendar year" and not in the Spring of 2018, as announced earlier this week.

Dynamics GP 2018 also will be out later this calendar year, as previously announced.

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