Microsoft made Microsoft Dynamics AX 2012, its enterprise resource planning application, available Sept. 8 to business customers in 25 countries. The software is yet another litmus test for Microsoft’s “all in” cloud strategy, which involves leveraging its formidable position in traditional, desktop-bound software to convince users to sign up for subscription online services.
In a speech broadcast online, Microsoft CEO Steve Ballmer described the new offering as “powerfully simple,” a buzz term repeated by other Microsoft executives during the launch. Certainly the company wants potential customers to perceive the solution as a flexible one, with the ability to provide a broad array of business intelligence for decision-making. Microsoft Dynamics AX 2012 has been designed to play well with other Microsoft products, including Office and SharePoint.
For most companies, though, the more interesting aspect of Dynamics AX 2012 might be its integrated cloud offerings, notably the Rapid Start, Payment and Commerce services available via Windows Azure. In theory, that draws public cloud services into a private cloud or on-premises deployment. That hybridization could add an extra element of flexibility to an ERP deployment.
Microsoft’s “all in” cloud strategy involves convincing businesses to embrace a subscription-based model for software. The Office 365 suite, which bundles online versions of Microsoft’s productivity software, is a recent example. However, Microsoft also faces considerable competition in the “professional cloud” arena from the likes of Google, Salesforce, Oracle, SAP, and others.
In order to provide a competitive differentiator from those aggressive and well-funded rivals, Microsoft has emphasized how its cloud solutions interoperate with its existing software, such as Office. Microsoft’s long history and wide range of solutions, in theory, provides a value-add unmatched by the other companies’ emphasis on offering a combined hardware-software stack, say, or an easy-to-use interface modeled after consumer products.
However, Microsoft continues to draw a significant percentage of its quarterly revenues from traditional, desktop-bound software, which its nascent cloud applications have yet to eclipse. Microsoft executives doubtlessly hope to see greater uptake, accompanied by more sales, over the next several quarters. At the very least, that would validate this “all in” cloud strategy.
Until that time, products such as Dynamics AX 2012 show Microsoft easing into its cloud role.