Is Dynamics AX the new flagship of Microsoft’s ERP software?
The most important bit of hard news to come out of this week’s Convergence 2012 conference in Houston was a firm timetable for the availability late this year of Dynamics NAV 2013 and Dynamics GP 2013 – the first of Microsoft’s ERP application sets to be offered as cloud software.
But it was clear from the buzz from Microsoft executives at Convergence that there’s a lot of focus right now on Dynamics AX, a product that until recently hasn’t enjoyed a lot of visibility.
First some background. Microsoft has four ERP application suites: Dynamics AX, GP, NAV and SL, all acquired by Microsoft in 2001 and 2002. GP and NAV, designed for small and midsize organizations, have been Microsoft’s most visible ERP products given the company’s SMB focus. They’ve also been popular with Microsoft channel partners for the same reason. Dynamics AX, meanwhile, is targeted toward the same large “enterprise” market dominated by ERP apps form Oracle and SAP.
So why the new emphasis on Dynamics AX? One reason is that AX has undergone a significant overhaul from the aging Dynamics AX 2009 edition to the Dynamics AX 2012 that began shipping last fall. (The company also shipped a version of the software for the retail industry in January and Dynamics AX 2012 R2 will ship later this year.) Listening to Microsoft executives, solution providers that work with AX and customers that use it, it’s clear the new release marks a quantum leap in the application set’s technology.
“AX 2012 is the game changer,” said Doug Kennedy, vice president of Microsoft Dynamics partners and support services, in an interview.
“It’s not a secret that we invest more in AX,” said Kirill Tatarinov, president of Microsoft Business Solutions, noting in an interview that the application’s capabilities or “functional footprint” is the broadest among Microsoft’s ERP apps.
The increased focus on AX is also a sign of Microsoft’s stepped up efforts to compete for big-company sales. As other Microsoft technologies such as the SQL Server database have “grown up” and are increasingly sold to enterprise customers as well as to SMBs, Microsoft now has its sights on competing with Oracle and SAP in the enterprise ERP application arena. And Dynamics AX is the product it’s leading with.
Microsoft in recent years has heavily pitched AX as a “platform” for ISVs to develop custom and vertical-industry applications. But it hasn’t been a big channel play. Speaking on a customer panel at Convergence, Bill Schlageter, CIO at AX customer Dentsply International, said he could not find an AX partner four years ago when the company first implemented the software.
But Microsoft seems to be in recruit mode for partners. While Tatarinov said Microsoft now has a stable of AX channel partners, he also said ”we need more. The opportunity that [AX] presents to a broad range of partners is phenomenal.”
Kennedy said Microsoft is relying heavily on systems integrators such as Accenture, Avanade, Infosys and HCL to take Dynamics AX to customers and the vendor is beefing up AX training to expand their capacity. And the company continues to recruit ISVs for AX, a list that already includes Cincom Systems, McLane Logistics Technology, and Ferranti Computer Systems.
For solution providers thinking of joining the AX bandwagon, Alpharetta, Ga.-based Junction Solutions offers a possible model. Chris Hafenscher, senior vice president of strategic alliances, describes the company as a “hybrid” VAR and ISV, reselling AX along with its own AX-based applications for multi-channel retailers and the food and beverage industry.
All this isn’t to say that Microsoft is pulling back from its other Dynamics ERP applications. Far from it. But it’s clear Microsoft is betting heavily on AX. For ambitious solution providers looking for a growth path, Dynamics AX could be an attractive option.