I’m back from Madrid for 3 days now. In case you don’t know what Directions is, it’s the yearly conference for Microsoft partners, focused on the SMB market. About 180 partners attending and 2.100 people eager to learn about all the new stuff Microsoft has to share.
This year was for many partners an eye opener. As explained by Marko Perisic and his team, we will still have a Dynamics NAV2018 by the end of this year, but it will probably be the last version in its current format. After NAV2018, the product will come together with its cloud twin currently called Dynamics 365 Tenerife.
Now if you look in the ‘Ongoing’ column in the picture above, you will see the name “NAV” is no longer mentioned. This is the first reason why some of the current Dynamics Partners panicked a bit. They were afraid that their beloved product Navision would simply vanish. This is of course not true. The current product will live on, but under an unknown title and more as a SaaS product that you can easily deploy, just like the other already popular products within Dynamics 365. And there you have the second reason why some of the partners were slightly displeased. An easy to use and implement SaaS product will take less time to deploy at a new customer, therefore generating less paid services as before. And services is the type of thing you want the most as a reseller, because it brings margin.
While I’m only active in the Dynamics channel for the past five years, I understand why some partners react the way they do. As Marko described, for a reseller that is in the business for more than 20 years, it’s more than just an ERP system. It has become their way of life.
There is however one massive flaw in the way that a classic NAV partner thinks and disagrees with the future of Microsoft Dynamics… Your customer does no longer want to buy and implement a business application the same way he or she did 20 years ago. That same customer does no longer ask for an estimation of mandays. Instead, he or she asks for a price per user per month, and almost assumes there are close to 0 implementation services needed. Just like Netflix, just like Spotify and yes, just like Office365.
The past two years I noticed this new way of thinking quite clearly. While asking and understanding the requirements of a new prospect, I was evaluating whether or not the prospect would fit in our SaaS offering Scapta365. If they did not fit the ‘100% standard product’, we would offer Dynamics NAV with a classic, but quick implementation. Sometimes I left the two options open for the customer and then something interesting happened. They started to compare the price and implementation method. All of a sudden their custom requirements, that were so important before, were just left out by the decision maker. Just to fit the out-of-the-box (OOTB) approach and product.
As you can see in the keynote slide above, Microsoft also understands this new customer need and, luckily for us partners, adapted the Dynamics offering to fit what the market wants. In the end, your customer doesn’t care about the name of a specific product. They just want a solution for their problem. They don’t want any surprises. They want a clear and transparant price. They don’t want to spend much time implementing a new ERP system. They just want to use a new application instantly. And Microsoft Dynamics 365 delivers on all of these areas.
If the amount of services decline for each new customer and licensing becomes subscription based, where does this leave the Dynamics partner? Well the answer is a bit paradoxical. Using a new ERP/CRM application is not the same as opening up your Netflix or Spotify for the first time. A customer still needs quality training, a helping hand and guidance for each step taken. So the answer is again superiour and personal service. Maybe not in the volume per customer that we were used to, but more in a recurring manner for each new customer.
All the stuff we learned at Directions might be hard to take in and will require a big change for several partners. We all require change management from new customers when we deploy a new Dynamics product. Maybe now it’s the first time we apply some change management on ourselves.