Microsoft Plays SAAS Catch-Up

By Renee Boucher Ferguson  |  Posted 2006-03-27

Microsoft Plays SAAS Catch-Up

Microsoft might be late to the game with a software-as-a-service offering for business applications, but its working to lay the foundation for service-enabled applications with its Dynamics application architecture, according to industry insiders.

The company will announce March 28 at its Microsoft Convergence conference in Dallas a Web services integration layer that will be delivered this year across its range of Dynamics ERP (enterprise resource planning) suites to enable composite application development and integration.

Microsoft Dynamics CRM (Customer Relationship Management) and Dynamics GP are available now with a Web services layer, and Dynamics AX (Axapta) will ship in May with its Web services layer. The remaining Dynamics suites, SL (Solomon) and NAV (Navision), will be available with an integration layer later this year.

The Web services integration layer will allow Microsoft to standardize data models across its four ERP suites. It will also bring much greater integration capabilities to customers and partners developing third-party applications around Dynamics and hooking into Microsoft applications for customers.

The Web services in GP, for example, provide standard schemata for orders, customers, shipping addresses and inventory information, according to Microsoft Certified Gold partner Travis Smith, president of Appolis. They also provide the ability to write that information back into GP using an SOA (service-oriented architecture) model.

Read more here about Microsoft Dynamics.

"What theyre telling us is [that], as they move to the next version, and then the next version, [schemata] will remain intact, so the customer application will not be broken," said Smith in Minneapolis. "Microsoft will provide new information [in the form of new Web services] but provide a layer of isolation between the guts of GP and information that needs to be provided to us," which wasnt the case in the past.

The bottom line, however, is an integration layer across Dynamics that provides the necessary ingredient for Microsofts applications to be delivered as services—something Microsoft is not ready to confirm yet, but analysts say is coming.

"With SAAS, today Microsoft is passing it off largely to partners, but I think they will do more and more of this [with Dynamics]," said Gartner Group analyst Yvonne Genovese. "They have the ability to do some of that in individual applications. They could do some CRM Live initiatives, or some GP Live initiatives. This is one of the end goals—not the end goal," for a Web services integration layer.

Microsoft officials skirted around the question of whether on-demand business applications are part of the companys Dynamics road map.

Click here to read why analysts think on-demand software services will go mainstream in 2006.

"We believe in a hybrid model where customers can have the choice to deploy [on-site], hosted and in a combined manner," said James Utzschneider, general manager for strategy at the Redmond, Wash., company. "Support for Web services protocols enables many of these scenarios."

"For them to do [SAAS] across all the applications would be a pretty big deal," said Genovese, in Stamford, Conn. "What they have to do is pull functionality out that is more likely to be offered as a service. The next step that theyre going to have to go through—part of Wave 2—is where they come to a common business platform, where they can pull common pieces out that can live on their own. That is something they are preparing themselves for."

Forresters Ray Young agrees.

"As Microsoft is integrating with Office 12, if you think about the services their calling from Outlook, plus the SQL Server 2005 reporting functionality, eventually it will get them to a hosted solution, or to be able to host the complete Dynamics product line," said Young, in Cupertino, Calif. "But for the time being, theyre making that functionality more accessible for Web services."

Microsoft is in the midst of Wave 1 now, a two-pronged approach to Dynamics that will eventually enable process orchestration and integration based on roles and the work people do.

Next Page: For integrations sake.

For Integrations Sake

Satya Nadella, vice president for development with Microsoft Business Solutions, the business applications team within Microsofts Information Worker group, laid out three types of application development Microsoft is focusing on with the Web services integration layer: Mash-ups (Microsoft Snap is the companys version of mash-ups) that bring together different application functionality using Web services (think Google maps and a supply chain application); Composite applications, where users create an application from various components based on a business process; and business-to-business integrations, where one partner is integrating with another using Web services.

SAAS companies are being called to the mat for outages that have prevented them from providing 99 percent uptime. Click here to read more.

"The core of what we are doing as a division, in terms of technological design, is all around roles-based productivity," said Nadella. "It comes down to starting with people in specific role, and connecting to their work, or business process. When you look at the issue, the thing that really jumps out is the seams that exist between multiple applications people use to get their job done."

The idea is to break down the "seams" between applications and systems using Web services integration, along with other Microsoft technology, for example, Windows SharePoint Services, with which Dynamics is linking.

Mike Gillis, CEO of MBS partner Iteration2, said his AX customers arent asking for integration technology per say, but rather asking for solutions to business problems.

"No ones asking for Web services, but theyre asking for ways to be more nimble," said Gillis, in Irvine, Calif. "Web services enable that."

Gillis said he as a "strong vision" for how hell use the Web services integration layer in the future: a middleware layer to connect systems together—for example, Axapta 4.0 and Dynamics CRM—and to integrate Microsoft Snap applications. Hell also couple the integration layer with BizTalk for business process orchestration and timing across systems.

As for SAAS, Gillis has heard rumors of "some sandboxing and things going on as far as [Microsofts] own hosting," but he cant confirm that.

"The whole thing would make sense," he said. "I like the idea; I would like a strongest player in the world to do hosting, but I dont know how far along they are with that."

Appolis Smith is banking on Dynamics Web services integration capabilities for his own on-demand services.

"Right now were building an application, Without Wire Warehouse for GP, to be released in May. Its our first real offer thats going to take advantage of the Web services integration layer," said Smith, who will offer the application as an on-demand application. "Going forward, we plan on building a lot more applications using this model. Its our future. Its what people want."

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