Analyst: Microsoft is still being careful not to compete with partners on ERP.
Microsoft is taking parts of its Dynamics enterprise resource planning (ERP) product line to the cloud, but the move is not a threat to partners who make on-premises Dynamics ERP deployments their businesses, according to an analyst.
"What Microsoft is being careful not to do is host the Dynamics ERP products for customers," says Rob Helm, managing vice president of Directions on Microsoft. "It's doing that with Dynamics CRM, but ERP still seems to require too much customization and integration for Microsoft to build a hosting business, and it continues to leave that to partners."
What Microsoft announced in mid-November is the extension of Dynamics ERP capabilities with three add-on services.
The add-ons include Sites Service, a Windows Azure-based Web development application; Commerce Service, a multichannel e-commerce solution; and an enhanced version of its Payment Service. The subscription-based services will be hosted by Microsoft's partners and are expected to be available in the first half of 2010, according to a statement from Microsoft. The services will run through the cloud in what a Microsoft blog refers to as "a hybrid model" that combines on-premises and on-demand ERP solutions.
"[This] announcement allows current ERP partners to expand their offerings to existing and new customers," notes a Microsoft spokesperson. "Additionally, with the market for hosted and on-demand ERP solutions increasing significantly, the ability for partners to offer the flexibility of choice to customers provides a competitive differentiation in the marketplace in many countries."