Why Not Just Stay on Dynamics AX 2012 and Avoid Azure Costs?

How do you choose between Cloud & On-premise? Data Security is an obvious & major factor that can depend on the deployment method you chose.

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    Interesting question, right? Microsoft Dynamics 2012 R3 is working well for you and undoubtedly represents a significant amount of time and money consumed to get it in place for your company.  You are pleased with the system performance and ongoing costs, so why change?  What does the New Dynamics AX deliver that your current solution doesn’t?

    We’ll share some information about the New Dynamics AX in this post and you can make your own decision.  Frankly, some companies may be just as well, if not better off, sticking with their current investment for a while longer.  Others may find technical, financial or business process reasons to move more quickly than previously planned.  Every company is unique and needs to find the right timing for such an undertaking.

    What’s so great about the New Dynamics AX?

    There are very few changes to the application features between the New Dynamics AX and AX 2012 R3. User training investments and even 3rd party solutions will be minimal so moving to the new release is fairly easy.  Other than a few improvements to budget planning and retail, almost all of the functionality is the exact same as it is in AX 2012 R3. Some features, including Microsoft Project integration to project accounting were deprecated, but may be seen in future revisions.

    The New Microsoft Dynamics AX offers an improved user experience that looks and works like a modern website with a touch of Microsoft Office and delivers deep integration that seamlessly shares information between Dynamics AX, Dynamics CRM and Office 365.  In fact, Dynamics AX is now a fully browser-based HTML5 client which gives people access to Dynamics AX across platforms and devices and enables organizations to extend and build business-specific mobile applications. The new HTML/JavaScript client replaces both the former Windows client and Enterprise Portal.  That means everything is available through the browser.  No more clients to install or manage and no more terminal services or Citrix required.

    Based on extensive usability analysis, the redesigned Dynamics AX brings a new touch-enabled, modern user interface that uses the principles of highly visual applications that users expect in consumer applications to their enterprise business applications.

    Power BI Integration

    The New Dynamics AX provides near-real-time analytics powered by Azure Machine Learning with the ability to visualize data through Power BI embedded right within the application. This gives users not only the information they need, but also predictive capabilities built right in the application.

    New Enhancements to Microsoft Dynamics Lifecycle Services

    The new release also introduces enhancements to Microsoft Dynamics Lifecycle Services, an Azure-based service that allows for turnkey deployment with prebuilt, industry-specific solutions available in the Azure Marketplace (see AXIO Professional Services in Azure Marketplace) and automated setup on Azure, empowering customers to deploy faster with higher quality. The new Dynamics AX delivers a more flexible solution architecture that enables incremental implementations, changes and updates, giving businesses more agility and faster time to value.

    Visual Studio for Development

    All of the development work in the new release of Dynamics AX is done in Visual Studio (VS), but has deep integration with the Dynamics AX Application Object Tree (AOT). The AOT is still there and even the data model is essentially the same as AX2012-R3. The native X++ language is still the primary development language for AX but is now considered the same as any other .Net language such as VB and C#. Microsoft now considers X++ a “first class citizen” .Net language. Developers still need to have extensive knowledge of X++ in order to perform base customizations in AX.

    Azure Cloud Power

    Building on the global Microsoft Azure platform, with its strong commitment and capability to meet diverse data locality and data sovereignty requirements, Dynamics AX is uniquely positioned to meet the needs of global customers. The new release brings with it the benefits of the cloud that are most important for business — from simple signup, immediate provisioning, and built-in high availability and disaster recovery to elastic capacity to add resources but only pay for them when they are being used.

    In fact, the New Dynamics AX database runs on Azure SQL and can be replicated across data centers within seconds when deployed in a production setting.  Microsoft geo-replicates the production database across multiple Azure Data Centers when deploying AX in the public cloud.  This means that AX customers automatically get high availability and disaster recovery services automatically just by running the database in Azure SQL.

    Is the Juice worth the Squeeze?

    The business case for the New Microsoft Dynamics AX is powerful and most of our customers are either in the process or planning on moving to the new platform.  For many, it will be their first opportunity to step into a truly cloud-based ERP environment as the New Dynamics AX is only available in Microsoft’s Azure Cloud today.  True, customers may choose between a Microsoft-managed environment vs a partner-managed environment, but at the end of the day all roads lead to Microsoft’s Azure Cloud.  For most, the cloud and mobile experience, enhanced LCS, improved BI, improved security and other new features provide all the justification necessary to make the switch.

    Some Dynamics AX 2012 Customers are reluctant to make the transition for fear of increased costs related to Microsoft Azure.

    “The New Dynamics AX is Great.  Microsoft Azure is great.  But what if I want to stay on AX 2012 R3 and save money by keeping our solution on-premises?”

    Fair enough.  For some customers, an on-premises solution may cost less and the functionality provided in AX 2012 may be sufficient to meet their business needs, but we would caution those who assume their Total Cost of Ownership over time is actually less.

    Moving to Dynamics AX in the Cloud

    First, we need to make sure everyone is on the same page as to what a cloud deployment is vs an on-premises deployment.  The basic difference between these options is simple: Cloud ERP is provided as a service, with your software, databases and associated data delivered through an internet connection from the Cloud. On-premises ERP solutions are installed on your company systems and managed by your IT department and/or third party contractors. So how do you choose between Cloud and On-premises?

    The most common factors taken into consideration are Agility, Cost and Security.

    Few companies remain static in size and need.  Acquisitions, seasonality, growth or even retraction can mean increased or decreased requirements for technology.  In the cloud, it is your cloud partner’s responsibility to handle these changes.  In an on-premises deployment, the responsibility falls on the customer.

    Handling these changes means staffing an IT department capable of recognizing needs and addressing them quickly and appropriately.  This can be costly and time-consuming, but for many companies there are other factors driving the need for in-house IT staff so these responsibilities are less of a burden.

    Additionally, the cost of hardware appropriation, housing and maintenance will fall directly on the customer in an on-premises deployment, while a cloud provider typically makes this somewhat transparent to the customer.  Economies of scale give cloud providers an advantage over most companies in this area as they’re sharing this burden across many companies.  Hardware, maintenance and other related costs are understandably lower, but not all of this is passed on to the customer.  Direct costs in a large enterprise can be just as large, but they enjoy the benefit of focusing on their core business instead of managing IT.

    Data Security is an obvious and major factor.  In today’s complex and regulated environment, businesses need to focus on building secure solutions in the cloud that deliver value to their customers, partners, and shareholders—rather than on the infrastructure to make it run. Cloud computing offers an opportunity to transfer some of the cost, risk, and effort of managing IT platforms and software to an independent, validated provider.

    Microsoft has decades-long experience building enterprise software and running some of the largest online services in the world so security is built into the Microsoft Cloud from the ground up.  They ensure that the Microsoft Azure Cloud is protected at the physical, network, host, application, and data layers so that our online services are resilient to attack. Continuous proactive monitoring, penetration testing, and the application of rigorous security guidelines and operational processes further increase the level of detection and protection throughout the Microsoft Cloud.

    Microsoft’s enterprise cloud services including Microsoft Azure, Office 365 and Dynamics CRM even meet the standards of EU privacy laws, European Union’s data protection authorities have confirmed. (read here in Computer Weekly).  “Microsoft is the first – and so far the only – company to receive this approval,” said Brad Smith, general counsel and executive vice president of legal and corporate affairs at Microsoft on  the company blog.

    Regulatory requirements and data sensitivity often drive the decision to host on-premises vs cloud where systems and even databases may be shared with other companies.  Oddly enough, cloud providers are often much more secure and dependable than privately hosted systems.  The choice is often made on “what if” rather than hard facts.

    So… Do all roads lead to the cloud in 2016?

    In the end, the business benefits of leveraging a cloud solution like the New Dynamics AX tend to outweigh the perceived cost savings of implementing and managing in-house.  A quick Google or Bing search will turn up dozens of “cloud calculators” that compare costs associated with self-managed environments vs cloud environments.  And, with the performance, new development and user-experience enhancements provided by the New Dynamics AX, the better question might be “how soon can we make this happen?”

    Also, read up on Dynamics 365, which is likely to change the cost impact of moving to Microsoft Dynamics AX – especially for customers currently or planning to implement Microsoft Dynamics CRM

    SBS Group consultants are here to help our customers review their business goals and make the best decisions for technology investments.  Reach out today and we’ll help you analyze potential ROI and cost of ownership across the different products and platforms.

    Robbie Morrison
    VP Enterprise Solutions and Services, SBS Group

    About Robbie
    Robbie Morrison has spent nearly 20 years helping customers build and deploy elegant technology and business solutions.  From start-ups to enterprise-class organizations worldwide, his knowledge of the Microsoft Dynamics ecosystem helps SBS Group customers maximize benefits from the ERP investments.  Robbie

    Today, Robbie serves SBS Group customers in his role as Vice President, Enterprise Group where he provides thought leadership and manages the enterprise delivery team.  Robbie received his MBA in Business Administration and Management from the University of Georgia, Terry College of Business.



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