Microsoft makes good on promised cloud hosting of Dynamics GP and Dynamics NAV ERP apps. Dynamics AX will be the real, multi-tenant test.

Doug Henschen, Executive Editor, Enterprise Apps

June 19, 2013

3 Min Read

Microsoft announced Tuesday that it's finally offering its Dynamics GP and Dynamics NAV ERP applications on the Windows Azure cloud. The offering comes six months later than originally promised, but it gives customers a "secure, enterprise-class cloud infrastructure [option] from a trusted provider," according to Paul White, senior director, Microsoft Dynamics ERP.

"We've been working closely with our first 'go-live' customers and partners, as well as with the Windows Azure team to develop guidance and tooling to ensure a great experience deploying on Azure," said White in a blog post about the announcement.

Microsoft Dynamics apps have been hosted by third-party partners for years, and those services are still available. But the new Azure option will enable customers to host their deployments in a private cloud on a Windows Azure Virtual Machine. Scale, supporting virtualization and development tools and speed of deployment were all cited as advantages of deploying on Azure.

[ Want more on Microsoft's enterprise app plans? Read Microsoft Gains Enterprise Clout With ERP, CRM. ]

"Having a hosted solution has given us the ability to create repeatable processes that enable us to quickly create demo environments," said Kenneth Kryger Gram, CEO of Microsoft partner Abakion, in a separate post on the Microsoft Dynamics Community site. "A customer can be up and running on a full system within one hour, [whereas] this used to take at least a month."

In the case of Dynamics GP and Dynamics NAV, Microsoft's ERP products aimed at small and midsized organizations, Azure hosting is strictly offered through Microsoft partners (and not directly through Microsoft), as the company wants to continue to work through its network of regional and domain-expert resellers.

" The reseller route] gives our customers the broadest possible range of choices in terms of partner selection, pricing and licensing, deployment options, hosting providers and more," said White. In fact, the channel-based selling strategy means you won't find prices listed anywhere for Dynamics GP or Dynamics NAV on Azure. Software licensing costs and ongoing hosting fees have to be worked out between the customer and the reseller.

The technical and sales model will be different for Dynamics AX, Microsoft's flagship ERP system, which is expected to become available on Azure sometime next year (if Microsoft's schedule holds). That's because AX will be delivered as a multi-tenant, public-cloud application (like, or Microsoft's own Dynamics CRM Online), and there will be direct selling by Microsoft.

"With GP and NAV, each tenant is completely separate and they run on Azure infrastructure," explained Michael Ehrenberg, a Microsoft technical fellow and chief technology officer for Microsoft Business Solutions, in an interview with InformationWeek at the 2013 Convergence Conference in March. "With Dynamics CRM Online, it's true, multi-tenant software as a service, and AX is going to be deployed the same way."

We're a long way from hearing any details on how Microsoft will sell and support AX as a cloud-based application, but the approach used with Microsoft Dynamics CRM Online will likely serve as a model. Microsoft will undoubtedly focus on the largest, global accounts, though channel partners are still likely to provide industry and domain expertise to even the largest customers.

Microsoft maintains its differentiator in the cloud is the ability to support hybrid deployments with some capabilities remaining on-premises and some functions moving to the cloud. Finance or entire headquarters ERP deployments can remain on-premises, for example, while subsidiaries or remote offices can run in the cloud (hosted on Microsoft Azure or third-party infrastructure).

Administrators can maintain consistent control across on-premises and cloud environments, according to Microsoft, using Systems Center to manage application assets and capabilities and using Active Directory to ensures single-sign-on and federated identity access controls.

About the Author(s)

Doug Henschen

Executive Editor, Enterprise Apps

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of Transform Magazine, and Executive Editor at DM News. He has covered IT and data-driven marketing for more than 15 years.

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