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Microsoft Dynamics ERP software now available on the Azure cloud

Microsoft is upping the stakes in the growing market for cloud-based ERP, with its Dynamics GP 2013 and NAV 2013 products now available for deployment on its Azure service.

The launch, announced Tuesday, gives customers another option for cloud-based ERP (enterprise resource planning) services besides NetSuite, SAP Business ByDesign and others. It’s a bit late in coming, as Microsoft originally said availability would be toward the end of last year.

Microsoft was apparently intent on making sure the Dynamics applications ran well on Azure before scaling up the business.

“Over the past several months we’ve been working closely with our first ‘go-live’ customers and partners, as well as with the Windows Azure team, to develop guidance and tooling to ensure a great experience deploying on Azure,” wrote Paul White, senior director of Dynamics, in a blog post. “That work is now complete.”

Given that ERP applications serve as the backbone of a company’s business, Microsoft was no doubt wise to ensure Azure could stably deliver Dynamics.

But Microsoft hasn’t quite pulled a NetSuite, in that it’s not directly selling Dynamics GP and NAV as SaaS (software as a service). Dynamics has always been sold through Microsoft partners around the world, who tweak and extend the product for customers in various industries. That will remain the case with Azure deployments.

Microsoft is loath to alienate its Dynamics partners and also at a disadvantage going it alone, given the effort and expense of building out a separate global consulting practice for Dynamics.

But it also sees Azure as a way to give partners who offer both Dynamics consulting and hosting a chance to get out of the latter business and move their operations to Azure.

Dynamics GP and NAV customers who choose the Azure option will be hosted in a “secure, virtual private cloud on a Windows Azure Virtual Machine,” with desktop, Web and mobile client access, White wrote.

One Microsoft partner that has worked on early Azure-based Dynamics projects praised the service in another blog post, which was posted on Microsoft’s website.

“Over the last few months, our experience in hosting has shown some very positive results,” wrote Kenneth Kryger Gram, CEO of Abakion. “From a sales perspective, we have been able to reduce the sales cycle from months to days.”

Abakion can now build demo environments and customize them much more quickly than before, Gram wrote. It is also able to get a customer instance up and running within an hour, he said.

Early Abakion customers have said they are saving between 30 percent and 70 percent on their operational costs, and Abakion expects the Azure option will help the company boost its own revenues as well, according to Gram.

Pricing for Azure-based deployments will be worked out entirely between partners and customers, according to a Microsoft representative.

“The move to Azure really means more to partners than it does to end-user customers,” said analyst Frank Scavo, president of IT consulting firm Strativa, via email. That said, “there will probably be some economic benefit” to customers through the Azure option, he added.

“In addition, it gives partners a more global reach, as Microsoft has Azure data centers around the world,” Scavo said. “Long term, the move is strategic for Microsoft. But in the short term, I don’t expect to see a mad rush to Azure by either partners or customers.”

Microsoft has two other Dynamics products, SL and AX. The first is used by project-based businesses, while the latter is Microsoft’s high-end offering for larger companies. The next major release of AX will also get the Azure treatment, with early adoption programs beginning next year, Microsoft has said. No plans have been announced for SL on Azure.

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