Perspectives on moving to Microsoft Dynamics 365 for Operations (AX7): Making sense of early user, partner reactions

By:  Chris Hurley

Microsoft disclosed many important details about the future of Dynamics AX at AXUG Summit 2016 in October. Our team at Computer Futures was very interested to hear the announcements related to Dynamics 365, which brings CRM and AX, along with other application and platform capabilities, together into a seamless solution that could be a game changer for customers, partners, and Microsoft.

Then again, it’s not all roses, and some users have genuine concerns. In our role as a Dynamics AX support firm, my team and I spent a lot of time over the past month on follow up calls with end user IT executives and Microsoft partners to get a temperature check on their thoughts with the announcements concerning Dynamics 365.

Below we present a few highlights of these conversations, as well as information on a short survey generated from questions direct from other users that they’d like to hear back from the community on.

One loyal AX user, a systems manager at a food and beverage company, did not mince words in describing his reaction to the news that Dynamics 365 for Operations (AX7) will not be offered as a pure on-premise solution. He explained:

“I’ve been a huge proponent of Dynamics AX for years. I’ve recommended it to other businesses in my area as late as this summer. Now I don’t even know if I’ll be on AX in three years and am making contingency plans. Unless I see some concrete signs Microsoft is listening to the concerns about a lack of an on-premise solution and actually going to do something about it, we’ll go in a different direction.

I feel like Microsoft is not listening to the users on what suits their business needs best – it’s doing what makes the most sense for Microsoft and the bottom line. I’ve got a really bad taste in my mouth. I understand that it makes sense for some industries and businesses to go with a cloud solution, but I didn’t speak with a single user at Summit who was demanding a cloud solution like I’ve heard Microsoft say the community is demanding.”

An AX partner said he observed similar responses from AX 2009 and 2012 users after learning about Microsoft’s Azure-centric plans, announced at AXUG Summit:

“Dynamics 365 will bring some very large enterprise clients to the table for Microsoft, and a lot of businesses looking at Dynamics for the first time are really excited about what Microsoft is doing in this space. Other users who have been early adopters of AX might be feeling angry or at least nervous that Microsoft isn’t listening to their concerns or business requirements. I know of at least one AXUG chapter leader who will move to another ERP if Microsoft doesn’t offer an on-premise version of AX7 in the somewhat near future.

“My gut is that Microsoft will sell a lot of 2012 instances now, with 2009 users choosing to upgrade to 2012 R3 now, and then batten down the hatches and see what happens in the next three years. Then if Microsoft still isn’t getting the message that a significant number of users are demanding an on premise version of AX7, if they pull support from 2012, a lot of users will look at other ERPs.”

Concerns about the cloud come down to a few key areas, including security, uptime, and system performance. For example, if an Office 365 customer already feel the service’s performance is not adequate, then they will not have confidence in Microsoft’s ability to make AX on Azure perform well. Users may also have questions about uptime guarantees and will compare those levels to their current systems.

Security is another concern, the food and beverage company systems manager told us:

“We’re a private company, a small target, and I understand that Microsoft is making a huge investment in security, but they’re also a much larger target and my President does not want our financial data out in the cloud.”

One partner noted that the licensing structure of Dynamics 365 could offer AX customers the benefit of greater flexibility in choosing the right partner at any time.

“Because of the new licensing framework, users can be a lot less tied to a partner in terms of both buying licenses and not needing a partner of record, so they can much more easily cut ties if they don’t feel they’re being taken care of, or want extra help and oversight on project delivery. The new licensing format also allows new partners and consulting firms to more easily step in mid-implementation because they no longer have to sell the full package.

“Therefore, partners that sell an implementation can’t take their clients for granted as much as maybe they could have in the past. Hopefully this will keep partners more honest in the initial sales process and on the delivery side in ensuring they stay more true to their customers’ needs, as the fear of the loss of business is much more real now. Overall, that creates a better user experience so I’m fine with that and am happy to see some of the habitual bad apples who just move from one failed project to the next get put out to pasture finally.”

While there is real concern in some segments of the Dynamics AX customer base, Microsoft seems to be aiming for the long term promise of Dynamics 365. And partners are more likely to appreciate that opportunity. As the partner we interviewed explained, it would be short sighted to disregard Microsoft and AX7 because of a lack of an on-premise story. In his words:

“I’m really excited for the long term prospects of Dynamics 365 – but there are definitely going to be some growing pains, and maybe that’s what we’re seeing here of a bit. For every ten happy customers not saying much you have one who’s complaining loudly, so maybe there’s a perception that a ton of customers are unhappy, when maybe it’s a smaller ratio than the chatter suggests. I’m curious to see the results of your survey for that reason.

“Then again this is what Microsoft does – they take a marginal product and incrementally improve it over time until it’s ubiquitous. Look at what they did with SharePoint – I remember people making fun of how bad that product was, and now it feels like everyone uses it. So, Dynamics 365 is much the same – how far the product has come in the last five years is remarkable – so where we’ll be in another five is really exciting. It doesn’t change the pain for some of us along for the ride, but I hope people stick it out.”

As you can tell, the reviews are very mixed and many people have unanswered questions. We’ve generated a short anonymous survey for AX users about Dynamics 365 that we hope you’ll take the time to answer. We’ll compile the responses and get them back to the community and send them to our contacts at Microsoft.