COPENHAGEN, Denmark, Oct. 23, 2007 –Today’s businesses face complex challenges and immense opportunities via the Internet. Among these challenges is the need to deploy – and have the IT infrastructure to support – business management solutions that align with their ever-evolving business needs with limited budget and staffing resources.
To help businesses address these challenges, Microsoft is offering customers who want to implement their enterprise resource planning (ERP) and customer relationship management (CRM) solutions with choices in how the software is delivered. These options include on-premise solutions, partner-hosted solutions or a combination of the two. The company is also providing more choices in how solutions are purchased, with options for upfront licensing, pay-as-you-go or financing. The strategy puts the customer in ultimate control of how they want to implement software solutions in their businesses.
To learn more about how Microsoft’s partner-hosted, subscription-based licensing model helps customers meet today’s business challenges, PressPass spoke with two Microsoft Dynamics ERP partners: Claus Bo Nielsen, sales director with TDC Hosting, Denmark’s largest provider of IT outsourcing services to the mid-market; and Nigel Redwood, managing director with e-know.net, a Microsoft Gold Certified Partner and supplier of fully managed hosted IT services to customers worldwide.
PressPass: What percentage of your business is dedicated to hosted solutions?
Nielsen: At TDC, our hosted Microsoft ERP and CRM offerings, which include Microsoft Dynamics AX, Microsoft Dynamics NAV and Microsoft Dynamics CRM, represent approximately 60 percent of our total revenue. We have approximately 250 IT-outsourcing customers and more than 15,000 people using the shared services we provide. Currently TDC Hosting is hosting a range of Microsoft products, including Microsoft Exchange Server, Commerce Server, Office SharePoint Server, SQL Server, BizTalk Server, Identity Integration Server, Content Management Server and Microsoft Office, among others.
Redwood: At e-know.net, 100 percent of our offerings are hosted. We offer our customers at 120 companies around the world the option to choose between per user, per month licensing sold through Microsoft’s Service Provider License Agreement (SPLA) program and more traditionally sold licenses that e-know.net hosts on their behalf. At present, we’re hosting Microsoft Dynamics NAV and Microsoft Dynamics CRM. In addition to these products, we also manage and host other Microsoft products ranging from Microsoft Office and Microsoft Exchange Server to SQL Server, Office SharePoint Server and many more. This total collection of Microsoft products enables e-know.net to offer our customers a complete hosted solution for their IT needs.
PressPass: What are the primary reasons you chose to deliver hosted Microsoft Dynamics ERP and CRM solutions?
Nielsen: Microsoft Dynamics is the natural choice for us. One of our key criteria was integration with Microsoft Operations Manager, which enables us to deliver a stable and secure managed service for mid-sized companies in this region. Not only does Microsoft Dynamics offer this integration, but it delivers so much more. The fact that Microsoft Dynamics NAV and Microsoft Dynamics AX are widely used throughout the Nordics reinforces our confidence that we made the right decision to build our IT outsourcing business around Microsoft Dynamics. Over the past three years, we achieved a yearly revenue growth of approximately 30 percent, and a major factor of our success has been relying on Microsoft Dynamics ERP products. These products will also play a key role for our expansion in the Nordic region in the following years.
Redwood: We wanted one single-source, integrated solution that included products such as Microsoft Office, SQL Server and Microsoft Exchange Server. This being the case, Microsoft Dynamics NAV was the logical choice. We were the first to offer Microsoft Dynamics NAV on a hosted platform in the UK, which provided us with a competitive edge. Choosing Microsoft Dynamics NAV has enabled us to capture business in the manufacturing industry – a sector we wanted to target. We have won hosted business through selling the benefits of Microsoft Dynamics NAV as a business solution first and then discussing the delivery model once the product selection has taken place. The efficiency gains that businesses can integrate through using Microsoft Dynamics NAV are then increased by having this hosted and fully managed.
Using Microsoft Dynamics NAV, we introduced hosted financial and supplier relationship management solutions for the small and medium enterprise (SME) sector. Subsequently we have been able to expand our business with additional products and services, such as Microsoft Office, Microsoft Exchange Hosted Services and IT consultancy.
PressPass: What types of customers typically want a hosted service?
Nielsen: Hosted solutions are ideal for small- or medium-sized businesses that have more than one physical location – whether domestic or international – which is our core customer base. They need highly skilled consultants and experts to handle their IT design, deployment and managed services. They want to ensure their IT services and tech support are up and running 24×7, rather than ending when office hours do. Other customers just need a fully outsourced IT service, delivering them an SLA (service level agreement) that exactly meets their requirements – they want to buy IT as they do other office utilities (e.g. water, power, etc.), and with a fixed monthly price tag and contract, making the budgeting of IT possible for years to come.
Redwood: Our customer base consists primarily of businesses in the manufacturing and distribution sector. They are using Microsoft Dynamics NAV to run their organizations and streamline their processes, whilst the hosted delivery mechanism removes the internal hassle and risk of running a system which is now critical to daily processing. We also have customers that are using Microsoft Dynamics NAV in industries such as computer services and health care. As a result of the delivery method, the majority of customers tend to be multi-location and focused completely on the use of the software to improve their business processes.
PressPass: What are the top three reasons your customers are choosing this deployment model?
Nielsen: Our customers appreciate the lower total cost of ownership (TCO) and access to experts for IT design, deployment and hosted services. We can deploy the Microsoft Dynamics solutions in a modern datacenter, using blade hardware, virtualization on all levels, including servers, backup, networks, security and firewalls, using the most modern monitoring systems that help our customers scale their businesses in a very cost effective way with maximum flexibility. This gives the basics for a high uptime guarantee and unlimited access to the customer’s core value – their data.
Redwood: Our customers have given us positive feedback about the product and the hosted deployment method and that is evidenced by the fact that they’ve signed long-term contracts and continue to renew them. We believe too it’s the right approach. First, there are no initial capital costs. We have high SLAs in place with our customers, guaranteeing 99 percent uptime around-the-clock, with users being able to connect from anywhere at any time. Finally, there’s the business continuity factor. The solution provides built-in disaster recovery facilities, which means our customers can spend their time focusing on maximizing their use of Microsoft Dynamics NAV because they no longer need to spend time maintaining their IT environment. They are required to employ only a minimum level of IT staff and the fixed monthly fees allow them to plan their IT costs accurately.
PressPass: What is the demand for hosted and hybrid solutions? Do you expect that demand to increase, decrease or remain steady over the next few years?
Nielsen: We predict a very high demand in the market for the hosted solutions we offer and are seeing more players join the market. In terms of the hybrid model, yes, there will definitely be more demand to deliver both models. Mixing the two models is providing a much-needed level of flexibility that’s important to a majority of our customers.
Redwood: All of the analysts are forecasting strong growth in this area, and we do not disagree. At the moment, most of our customers are running on purely hosted environments and we will continue to expand our business in this area. The Software as a Service concept is encouraging a hybrid model and e-know.net has recognized this with the launch of its message hub division. However, in my opinion, the fully managed hosted solution offers the ideal target market for Microsoft Dynamics products.