The following is a blog post written by Terry Petrzelka, founder and former CEO of Tectura Corporation.
Sometimes a blow is so big, so strong, and so fast that even when you see it coming, you can’t duck it or block it. At WPC in early July, Microsoft delivered a giant slap upside the head to Dynamics resellers – Dynamics 365. There were early signs we should have seen it coming and, as a matter of fact, some partners did see it coming.
First, Microsoft launched the CSP program and provided significant financial advantages to Dynamics CRM sales through the CSP model over other buying models. Next, Dynamics ERP products were added to the CSP program. Followed by Microsoft’s release of AX7, ‘the new AX,’ where all sales would be through CSP. Then, companies other than Microsoft Dynamics partners were invited to participate in the Project Madeira program. Finally, we experienced the technology preview of Project Madeira, a true on-demand SaaS business solution incorporating Office 365 and comprehensive ERP capabilities, based on the NAV platform. Microsoft didn’t hide anything – we could all see the blow coming – but Dynamics 365 is the kind of haymaker that no one can avoid.
I was thinking about this when I read Gus Krabbenborg’s excellent article, “WPC 2016 Notebook: A look back at 11 big stories for Microsoft Dynamics partners” on MSDynamicsWorld.com. Three of the stories Krabbenborg noted represent the key elements of Microsoft’s slap:
- Dynamics 365 is shaping up to be a modern end-to-end cloud business solution on ERP, CRM, Office 365 and Azure. The solution architecture will introduce a new Common Data Model for integrated apps and incorporates Power BI, Cortana Intelligence and Internet of Things (IoT) technology. This new solution comes in two flavors: a Business/SMB edition for 10 to 250 employees and an Enterprise edition for 250+ employees.
- At WPC 2014 the Partner Account Manager (PAM) role expired and was replaced by the new Partner Sales Executive (PSE) role. This time Microsoft decided to replace the PSE role again by a new role called Partner Channel Development Manager – in short PCDM. Other than the PAM and PSE in the near past, the PCDM will have a focus on recruiting new partners. Interesting of course is to see what this means for you as a partner.
- The Cloud Service Provider (CSP) program is the basis for all Microsoft Dynamics partners to do their business in the foreseeable future. The importance of understanding CSP was stressed in nearly every single session. So every partner should understand what CSP is and how they can benefit from it.
Gus Krabbenborg, “WPC 2016 Notebook…”
Dynamics 365 is coming in November 2016. It will most likely be Microsoft’s primary ERP focus going forward – development, marketing and sales. While development and support will continue for GP, NAV, and SL, I doubt you will see significant Microsoft investment in selling and marketing these ERP solutions. All indications are that there will be more investment in the marketing and selling of Dynamics 365 than there has been in selling the on-premise software products we have seen over the years.
I have a colleague who is a managed partner in the Dynamics CRM channel. Long after Dynamics ERP partners experienced the significant reduction in people and resources dedicated to partner support, he and other CRM partners continued to have partner managers to assist them access a wealth of partner resources. But when Microsoft shifted their focus from on-premise CRM to CRM online, the mission of these partner managers was changed from supporting the growth of existing CRM partners to the recruiting of new partners. Significant resources were developed to identify and enable platform partners to sell and deliver CRM solutions as well as recruiting Salesforce and SalesLogix partners to join the channel. Microsoft is obviously replicating this model with the Partner Channel Development Manager. Dynamics partners must prepare for new competition as Microsoft will not only be recruiting and enabling existing Microsoft platform partners, but also NetSuite, Intacct, and Acumatica resellers.
Dynamics VARs will have to engage and get involved in the CSP program in order to survive. As of now, there are three options for VARs. Becoming a self-hosting 1-Tier CSP requires an investment well beyond the reach of a typical VAR. Another option is for a Dynamics Partner to align itself with a Tier 1 CSP Partner such as distributor like Ingram Micro, etc. However, keep in mind – in my opinion – their programs are essentially self-serve and geared to Office 365 and infrastructure partners. Another option, which I think is more relevant than ever before for Dynamics VARs, is Microsoft’s Master VAR program. Master VAR programs, like those from SBS Group, provide significant benefits such as access to a Dynamics ERP-focused CSP marketplace.
These are complex and serious issues for the channel and I’d like to engage partners in discussing these. To that end, I will be moderating a webcast in conjunction with MSDynamicsWorld on August 18th, entitled “Dynamics 365 – What Does it Mean for Dynamics ERP VAR’s?” You can learn more and register for the webinar by clicking here. I also welcome comments here on the blog or feel free to email me with your thoughts at Terryp@ThePetrzelkaGroup.com.