REDMOND, Wash., Nov. 6, 2006 — Today at the Microsoft Convergence EMEA (Europe, Middle East, Africa Region) conference in Munich, German, Microsoft announced a groundbreaking step forward in the delivery of a hosted subscription licensing model for Microsoft Dynamics AX, Microsoft Dynamics GP, Microsoft Dynamics NAV and Microsoft Dynamics SL.
Julio De Villasante, Director of Software as a Service Strategy, Microsoft Dynamics
PressPass spoke with Julio De Villasante, Director of Software as a Service Strategy, Microsoft Dynamics, to learn more about the new level of IT functionality this offering will provide to Microsoft’s customers and Partners alike.
PressPass: Why has Microsoft developed this offering? Have customers been asking for it?
Julio De Villasante: Companies are constantly finding new ways to deploy solutions that align with their evolving business needs. The challenge is that they must do this in the face of growing constraints on budgets and staffing. Many also lack the infrastructure to gain access to the IT functionality they need. The advent of hosted applications broke down some of these barriers, but it has really been subsequent advances in technology and telecommunications infrastructure that have enabled a whole new level of opportunity.
Another missing piece of the puzzle has been the availability of new licensing models that allow a company to choose between purchasing the solution or subscribing to a monthly service. This is what we are able to deliver today through our ecosystem of Microsoft industry partners. Microsoft Dynamics CRM has been available as a hosted application since last March and it has been extremely well received by partners and customers alike.
Now, our partners can also deliver the full suite of Microsoft Dynamics ERP applications, in either a hosted or on-premise deployment model – and they have the option of purchasing, subscription licensing or a combination of both. The grand finale to this offering is that there is no minimum time commitment; customers can sign up for a short time period, such as a few months, or as long as they would like.
PressPass: Specifically, how are customers most likely to benefit from the addition of Microsoft Dynamics to the Subscription Licensing Model? What types of businesses will benefit most?
De Villasante: Truly, there are as many different ways companies can benefit from subscription licensing as each organization has unique business models. For example, this opens a whole new world of possibilities for organizations that have limited IT budget or staffing constraints, yet a very high demand for functionality and continuity. It also allows a new level of flexibility to increase or reduce the scope of the solution and the number of users in order to help companies remain nimble and to thrive in their respective industries. This is true for businesses of any size, from small companies to large enterprises.
PressPass: How does the Subscription Licensing Model for Microsoft Dynamics differ from similar offerings?
De Villasante: Well, that’s easy. In a word: choice. Microsoft’s offering is much more than just a licensing model. There are other hosted application options in the marketplace, but none offer the breadth of options that make this model unique.
Microsoft is enabling this initiative via a company-wide program that allows our partners to deliver complete subscription-based solutions, including not only Microsoft Dynamics business applications, but also the operating system, database solutions, applications such as Microsoft SharePoint, Microsoft Office Exchange and Microsoft Live Communications Server, and even their own complementary ISV applications. Our partners bring an infinite level of experience and depth on Microsoft solutions, including deep vertical-industry knowledge. These partners can now bring that knowledge to bear equally for subscription-based applications and traditional on-site implementations.
Additionally, in terms of choice, a company can select the best licensing and deployment model for them based on their business needs and existing resources. Microsoft partners can help deploy a solution on premise, hosted or as a hybrid combination. From there, the customer may decide to purchase the application up front, arrange for Microsoft financing or pay on a monthly subscription basis.
What Microsoft is also doing that’s unique is using the exact same data schema and code base for our hosted Microsoft Dynamics business applications that are used for our on-premise, traditional applications. First, it’s not all or nothing – companies may start out with a subscription licensing model and then alter their approach because it becomes advantageous to bring that business application in-house. In this case, it’s virtually invisible, because it’s all built on exactly the same code. This is also a benefit because it automatically enables the choice to host some applications and perhaps not others.
Last but not least, our customers can now look to a pool of more than 4,000 already-engaged service providers, to develop and host their solution. Many of these service providers in turn will also likely be able to offer additional services, essentially creating an even more complete solution for the customer.
PressPass: Let’s talk more about the partner opportunities here. What benefits does the Subscription Licensing Model offer?
De Villasante: Simply put, this is an exponentially growing market – and now is the time for service providers and partners to adjust and capitalize on the opportunity.
Service providers find it attractive because they can expand the breadth of their offerings. Services such as hosted email are becoming more and more commoditized. Going up the value chain to deliver on business applications allows them to grow and to differentiate in the marketplace. It also opens a new ecosystem of customers for them, which allows potential for things like up-selling and packaging their existing services with these new hosted application options.
For our partners, again, the beauty with Microsoft’s Subscription Licensing Model, and especially with the addition of Microsoft Dynamics ERP solutions, is the ability to offer choice to customers. Suddenly, partners have significant new revenue streams open to them on products they already know inside and out. In addition to the value they already experience building on the Microsoft platform, they have even more rapid sales cycles, quicker upgrade capabilities and far lower “cost of sales,” with less time necessary to devote to the proposal, development, pilot and implementation stages. They can also easily mix in new subscription-based applications for clients who already have other aspects of their Microsoft platform solution developed in-house. And these are just a few examples of the potential benefits!
PressPass: With all of these new updates, why would partners continue to build traditional on-premise applications?
De Villasante Guzman: Well, hosted solutions and subscription-based pricing options are not a magic fix that applies to every business problem. It really depends on the customer’s needs and how they want to best align their technology solutions to meet those needs.
It’s very unlikely that on-premise applications are going to ever disappear. Even so, much like the rest of the industry, we at Microsoft understand that the capabilities of today are really just the beginning of what Software + Services might ultimately offer. We are also proud to say that, as of today, we have helped move the bar significantly forward on what’s possible with the advent of the new Subscription Licensing Model for Microsoft Dynamics business applications.