By: Valerie Miller
Microsoft Dynamics NAV users seem to be finding more comfort in the cloud this year. Those were the findings of a new MSDynamicsWorld survey that were reported in a recent webcast, Microsoft Dynamics NAV and the Cloud in 2016: Customer Successes, Challenges, and Future Plans.
Dynamics NAV customers are using the cloud for a range of business needs today, still, NAV itself is only running in the cloud for a small number respondents. One explanation could be that eighty-four percent of Dynamics NAV users surveyed reported having used NAV for three or more years, and nearly half have used it for five or more years, suggesting they could still be working on older releases of NAV that were deployed with on-premise hardware.
The Dynamics cloud survey, conducted in March 2016, looked at customer sentiment among 284 Microsoft Dynamics ERP users and professionals. The survey was created and run by MSDynamicsWorld. VARs and consultants made up 51 percent of survey respondents, while Dynamics customers made up 49 percent of respondents. About 27 percent of respondents were Dynamics NAVs VARs, consultants and customers.
ERP, accounting trail among cloud uses, but are built for cloud
Only about 20 percent – five out of 26 respondents – listed ERP/Accounting when asked, “Where do you use cloud services today?” By comparison, that is about tied with cloud usage among Dynamics AX users, and a little more than double that among Dynamics GP users.
Webinar panelists Tyler Doerner, vice president of sales for Dynamics hosting provider WatServ, described Dynamics NAV as unique among Microsoft cloud offerings.
“NAV was one the first one of the Dynamics products to actually have a true viable web-client-type deployment,” he said. “NAV was the first true multi-tenant architecture, as well, from Microsoft, which kind of lends it to that hosted-type deployment. So, I am not surprised to see NAV customers being a little more adopting in the cloud type scenario, given that [NAV] is most state-of-the-art architecture of the Microsoft products.”
The most popular uses of cloud services consumed by Dynamics NAV users included Email and Calendar at about 55 percent; Payroll, a distant second at about 35 percent; and File and Document Management, about 30 percent. ERP/ accounting tied for fourth place along with HR/HCM and Custom Applications, a position that Doerner said was not a surprise considering the typical cloud adoption trajectory he sees with all Dynamics ERP products.
“HR, payroll, e-mail, calendar that kind of functionality, [are] generally … the first to go up into the cloud,” said Doerner. “And it is because of what is their role in the criticality of success of the business. If somebody can’t send an e-mail for a couple of minutes, while it’s a pain…everybody will agree, it is not critical to the day-to-day functionality of the organization.”
If the ERP is unavailable, “All of sudden you can’t take orders or you can’t ship something, you can’t invoice,” Doerner said.
Cloud success measures begin with skills and resources
When asked how well their organizations have adapted to managing their cloud based solutions (on a continuum between Less Successful and More Successful), most organizations ranked themselves highly for:
- Internal skills and resources
- End user support
- Costs (software, data, fees, services, support)
They ranked themselves somewhere in the middle for Compliance requirements (SOX, HIPAA, FDA, etc.), and below the median for Calculating ROI. Here, said Doerner, “success” is hard to quantify:
Regarding ROI, he said “It is a tough calculation to make…you truly have to try and compare apples-to-apples from a cloud solution to an on-premise solution.” An Infrastructure as a Service (IaaS) calculation is easy to make; but with managed services like backups, monitoring and support, then the ROI costs become “fuzzy” between people costs, labor costs and risk mitigation.
“Compliance is an interesting one,” Doerner said. Pointing to security compliance, he observes that “There are very few service providers who own the physical data center.” Two providers may claim physical compliance certification, and both pass an audit; but while one simply puts locks on the door, while another uses facial recognition, cameras and biometrics. Doerner advises that not all compliance certifications are created equal. This puts an onus upon the provider to detail their compliance offerings, and the customer to demand those details.
Deployment methods: On-premise, leaning toward hybrid
When asked about various NAV deployment architectures, VARs and consultants appear much more likely to recommend on-premise, compared to cloud models like hybrid, private cloud, or SaaS.
But even where ERP is on-premise, Doerner believes an organization is likely a hybrid one. He said, “If you look at it from the context of an organization, instead of an ERP perspective, I couldn’t honestly say. But my wager would be 90 percent of companies out there are in some type of hybrid scenario,” be it CRM Online, Salesforce.com, on-premise file share and so on. “The reality is that most companies do some kind of hybrid infrastructure at an organizational level.”
Among comments by VARs and consultants which indicate increasing acceptance of cloud:
- “SaaS recommended especially for smaller customers.”
- “We serve middle market and they are looking to eliminate infrastructure.”
- “Hybrid offers my company the ability to let the customer choose from every possible strategy.”
Another respondent observed that “Dynamics NAV in the cloud is starting to take off but slowly.”
Cloud-solution investments: Customers say ERP first
The Dynamics NAV customers tell a different story. When asked where they plan to add cloud service s, ERP first at 40 percent, tied with File/Document Management. Reporting and CRM were tied for the third spot with roughly 27 percent.
Interestingly, at 40 percent planning to invest in cloud ERP, Dynamics NAV customers tied with Dynamics GP customers, and edged Dynamics AX customers (35 percent).
Also true, fully 70 percent of Dynamics NAV users plan to increase investment in a cloud solution next year, while only 5 percent were planning to decrease investments. Another 5 percent said their investment in a cloud solution would remain unchanged. The second-largest chunk of survey participants – 20 percent – said they were unsure of how their cloud-solution investments would change next year.
These results indicate that 2016-2017 could be the year in which the ship turned for Dynamics NAV in the cloud. Dynamics NAV customers are heavy cloud users to begin with, comfortable with cloud services like Office 365 and CRM. Perhaps sold on the lower infrastructure costs they achieve with those smaller applications, they seem eager at last to take ERP into the cloud.