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Wednesday, September 23, 2009

Microsoft's Vertical Strategy for Dynamics AX

Yesterday, a lot of news broke about Microsoft in a buying mode for Vertical solutions from four different Microsoft based ISV's.

The offical Microsoft Press Release can be found here.:
Microsoft Dynamics Acquisitions Accelerate Industry Innovation for ERP Customers

Also over at MSDynamicsWorld.com, they covered this as well, with similar content and reference.:
At Long Last, Microsoft Unveils Its Verticals Strategy for Dynamics AX

Those two cover the broad, overall purchasing that is taking place. The two entries I did yesterday, were focused on what will be called "AX For Retail"

Those post can be found here.:
- LS Retail’s Industry Solution for Microsoft Dynamics AX Acquired by Microsoft
- AX For Retail - More news!

The coverage of this has been pretty good, with Microsoft's Crispin Read going over the high level benefits and vision to these moves. Once thing that I want to point out, and focus in on, for more detail is the following quote.:
"Partners will be able to focus on other more specialized functionality to serve companies that need additional customization, and will reduce their time to market and lower their investments"

That above statement comes from the MSDynamicsWorld.com article on this, which the link for that article is posted above.

So, Microsoft has been saying for years that more vertical solutions is promised, and in the making. Also for years, the Dynamics AX ecosystem for vertical solutions, has been delivered by the partner channel. Microsoft has always been a platform company, and wanting to provide a platform in which it's partners develop solutions on top of.

With this move, Microsoft raises it's own IP foot print up into the vertical solutions area. There are some great benefits to this, for example those mentioned of having these verticals have the R&D money and impact only a company the size of Microsoft can bring.

This also changes the game a bit, to where the support for these will move more in-house, more in-house MS knowledge will exist for these verticals, and it will also mean that certain partners will be able and feel more free, to make use of these verticals for thier customers or possible customers and not have a second partner involved.

So now, what we see in Dynamics AX is Microsoft is no longer just the platform provider, but also the major vertical solution provider as well. This will cause a shift in companies, like To-Increase, FullScope, etc. ISV's that had broad vertical focus, to switch gears, and focus into what is called Micro-verticals, that sit on top of these broader vertical offerings.

This means possible big changes for the development staffs that created those verticals at the companies mentioned. A change in direction, or a refocus.

So the partner, in this vision, is more focuses in on the services side, after the software sale, and the Dynamics AX Partner ISV offerings will continue to be more specialized, micro-vertical focused.

It's going to be interesting to see how this ripples through the entire ecosystem. I will end on I think this is mostly a positive move, looking at the benefits and all. Still there is a part of me wondering how far Microsoft plans to go up the Vertical in the future... interesting times for Dynamics AX either way.

You can say this, that for the Customer, it's a win. And for the Partners that already focused heavily in the Services side, and already did Micro-Vertical focus, it's a win. It's the larger ISV's that will have to re-invent themselves, and their staff.

Check back soon, as more to come!

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