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What does the future hold for Microsoft Dynamics?

Mary Branscombe | June 24, 2015
Microsoft Dynamics software line isn’t dead. Instead it’s moving to be a service you can build into the tools you need to make your businesses processes work better.

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Increasingly, Microsoft has been adding tools to Dynamics that rely on Azure services. Credit: Microsoft

Alongside the news that the Microsoft teams that make devices like Surface and Surface Hub will now be in the same division that makes the operating system on which they run, Microsoft's latest reorg moves Dynamics to the Cloud & Enterprise group (Microsoft Dynamics is the company's line of ERP and CRM applications). That shifts it from the Applications & Services division that builds productivity products and cloud services like Office 365, and puts it alongside Azure, SQL Server, Intune, Power BI, Visual Studio and BizTalk.

The departure of Kirill Tatarinov, who'd been in charge of Dynamics since 2007, and the fact that it's taken a number of years since Microsoft acquired the component parts of the product line for it to become a $2 billion business, might suggest that Dynamics is in trouble (and there have certainly been continued rumors about Microsoft's interest in buying Salesforce.com). But if you look at the future plans Microsoft announced for Dynamics at its Convergence conference this past March, as well as what's happened to BizTalk in recent years, the future for Dynamics looks much more interesting than just being another ERP and CRM tool.

If you're using Dynamics in your business, you don't need to worry about switching to a different vendor. But you'll probably want to start thinking about how you're going to take advantage of the new approach.

Agility and integration

A Microsoft spokesperson called the changes "a natural and logical step in the evolution and progress of the Dynamics business" and confirmed that the senior engineering teams for ERP and CRM are moving to the Cloud & Enterprise group without any downsizing or layoffs.

In many ways, Cloud & Enterprise is actually a more natural home for Dynamics, because the value of what Microsoft wants to deliver is less a commodity IT system like email or document storage, and more a strategic tool for managing the way your business works. Microsoft CEO Satya Nadella referred to these as "systems of intelligence" at Microsoft's Convergence 2015 conference earlier this year, talking about "the reinvention of productivity and business process" together, because improving productivity is so deeply linked to improving both business applications and business processes. That's much more than simply moving to the cloud for agility or cost savings.

"This latest move with Dynamics is in line with the trend for CIOs to focus on business transformation rather than just be a supplier of IT," says Frank Scavo, president of Strativa, a management consulting firm that tracks Dynamics.

"For customers, all of these technologies are interrelated. You never know what combination of products a customer would want or need for a given application. So having them all be part of one mainstream Microsoft development organization makes good sense."

 

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