Aug 4, 2018
Dynamics 365 Customers and Partners have had a few changes pushed
to them in recent years. Dynamics 365 was evolving at a pretty
rapid pace since it hit the cloud, and when James Phillips took
over the team, he took both of his feet and smashed the gas pedal.
It's like the USS Enterprise when it hits Warp Drive (I get a chill
every time I see that).
Trees in the Forest
I have been seeing a lot of posts about the October Release Notes
and the #freighttrain of new features coming. Everybody seems to be
writing about their favorite new feature(s). Don't get me wrong,
new features are always fun, but if you move out of the trees, and
look at the whole forest, there is a lot more going on here than
meets the eye.
Seismic Shift
I get that "Seismic Shift" is probably an overused term... but I
think it is a very real thing that is happening in Microsoft
Business Applications... right now! If you have followed this blog
in the past, you know that when I get highly animated about
something, you probably want to pay attention to it. I said in the
title that CDS changes everything you know. But at the same time
you have been hearing that, if you know XrM, you already know CDS,
and that is completely true. But that is looking at CDS through a
specific narrow lens, a legacy Dynamics lens. But if you circle
around to the other side of CDS, you can clearly see that Dynamics
365 is really just one door to CDS, of many doors.
A PowerApps Stamp
I was talking to Charles Lamanna recently, the GM for the CDS
Platform; I suggested that he had a PowerApps rubber stamp, and
that he was stamping "PowerApps" onto everything in sight. He
smiled... like a guy with a rubber stamp in his pocket. PowerApps
is one leg, of a three-legged stool, known as the "Power Platform",
the other legs being Power BI and Flow. Dynamics 365 is not
mentioned as a component of the Power Platform. I think in the very
near future, the term "Dynamics 365" will actually refer to the
First-Party Apps, and those apps will be sharing the spotlight with
applications built by others on the Power Platform.
The Power Platform
I know I have mentioned it before, but it was not that long ago
that I was told unequivocally, that Microsoft will never release a
platform-only license. In order to get CDS, you will need to
license one of their first-party apps. In hindsight, I think I
recall hearing this from a GM for one of the first-party app teams.
Whether he was unaware, or the decision to release a platform-only
license, was made afterwards, I don't know. But somebody decided to
take a risk and release a platform-only license. What risk? The
risk that smart folks might actually build better "apps" than
Microsoft, on Microsoft's own platform.
Risky Business
A quote from this 1983 movie was "Sometimes you just gotta say,
"WTF". "WTF" gives you freedom". Somebody at Microsoft said "WTF",
let them have the platform. At the end of the day, cloud is about
scale, whoever has the most recurring revenue wins. If all of Wall
Street could only place their bets on one number, it would be
growth of recurring revenue. Wall Street does not give a shit about
how you get there. Up until now, in the Microsoft Business
Applications space, their recurring revenue growth doorway, was
tied exclusively to their sale of their first-party applications.
Well, they just broke down the doorway... hell the whole wall has
come down.
Let's do some Math
Let's say you are a mid-sized Real Estate firm looking for a
business solution to improve your sales process for your 500
agents. In your web search you discover
this link to Dynamics
365, and click to explore it. Obviously, not wanting to waste your
time, you will go to the pricing page first, and see the Customer
Engagement Plan at $115/Per user/month. Hmm, that's about
$57,500/month (we, as partners, know that is a worst case cost
scenario, but the visitor does not). For almost $60K a month, this
application must be awesome! So the customer initiates a trial. In
their poking around, they are duly impressed with all of the cool
features and capabilities, but... where is the Real Estate angle?
"RING" There goes the phone, who could that be? "Hello Mr Real
Estate CEO, I'm your friendly Dynamics 365 Partner and I see you
are interested in Dynamics 365". "Well yes, but where are the
features for Real Estate?". "What do you need? We can build
anything for you, Dynamics 365 is fully extensible". "Well, I would
need blah, blah and some blah to make this work". "No problem, we
can build that for you for $100K". "Thanks, I'll get back to you".
Back to the web search results, there's another link for the "Acme
Real Estate Application". Taking a closer look, Acme is only
$75/Per user/month. Hmmm, that's about $37,500/month... let's take
a look at this. Wow! This application has been built for exactly
what I need... it already has blah, blah and even blah! It says it
is built on the Microsoft "Power Platform", whatever that is... I'm
Sold! Looking at the difference in cost, you might think that
Microsoft just lost $37,500/month ($115 Plan License, vs, $40 P2
license) to an ISV, but in reality, without that ISV solution, that
customer was going to another platform. Net gain to Microsoft...
$20K monthly recurring revenue. Microsoft has a half-dozen
first-party apps that run on the CDS platform. Imagine 500 vertical
ISV solutions running on the same platform. Microsoft will take
that to the bank all day long.
Transition of Power
Up until now, Microsoft Business Applications success was largely
tied to their Partner ecosystem of System Integrators. These are
the partners that sell the first-party applications, and then
configure and customize them for their customers. ISVs have been
around for a long time, but mostly in the role of "Addons" offered
by SIs. That wall that Microsoft knocked down, is about to change
that. Already there are some ISVs, like us with our
RapidStart CRM solution, that are
trickling over the transom. That trickle will become a flood, and
ISVs will become Microsoft's most valuable partners, in the very
near future. According to Mr. Spock, “When you eliminate
the impossible, whatever remains, however improbable, must be
the truth.”.