Podcast: Microsoft Partner Outlook: Is Microsoft’s Cloud Channel Strategy in Full Bloom for FY2018?

Jason Gumpert: It started with an article that Elliot, you were kind enough to participate in and got some pretty good traction with our readers. It was talking about the topic of partners who had considered D365 sales and customer experience apps in addition to Salesforce and maybe even other competing solutions and then eventually decided to come back to focusing on the Dynamics 365 Solutions, for whatever reason.

Can you talk a little bit about where you are at? Maybe about some of the decisions that Catapult has made recently in terms of the focus on the Dynamics Suite as opposed to other suites that you might have been working on.

Elliot Fishman: Historically we’ve always been deeply invested in the Dynamics Channel – both Dynamics NAV and Dynamics CRM. That has always been the focus for Catapult. What we found over the years with the increase in information, demos and trials available to prospective customers is that the sales process has changed dramatically. Prospective customers tend to show up fairly self-qualified for a given technology platform. We get prospects who ask us for a Dynamics CRM platform, or something else. Dynamics CRM is an amazing platform. Salesforce is as well and there are organizations, for whatever reason, who are inclined to look at Salesforce for their Sales Process Automation, Marketing Automation and Customer Service Solutions. We found that we were getting requests. So rather than trying to get them to change their minds and focus on the other platform that we offered, we started a Salesforce Consulting practice a couple of years ago. We got that off the ground with moderate success and we are pretty convinced that if we kept at it we could have built up that capability. But what we learned along the way is that it’s a very different kind of partner channel. Salesforce has a different relationship with their partners than Microsoft does. I think our legacy of being embedded in the Microsoft Channel Serves us really well. We know how to navigate the channel and work with them as they evolve their capabilities. With the shift to Dynamics 365 things suddenly got interesting from the view of capabilities across the platform. When we looked at our business at a whole and tried to rationalize our offering, we felt that we would ultimately be serving our customers better by reallocating our customers back into Dynamics and dropping our focus on Salesforce.

In doing so we don’t mean any disrespect to Salesforce customers or to the good work that people at Salesforce are doing to bring innovative technology into the market. We just think that Microsoft is doing a fantastic job. There are some really exciting changes with Dynamics 365; enough to wrap our arms around and build a compelling offering.

Jason Gumpert: Maybe we can broaden the conversation a bit and talk about the partner technology outlook. It goes deeper than just CRM. Elliot – it sounds like you’ve seen an inflection point – or you’ve changed your perspective on where you see MS in terms of their direction and the promise in their platform going forward where maybe you weren’t as confident or weren’t as certain about what their vision was. You’ve gained more confidence recently, is that fair to say?

Elliot Fishman: I think so. I’ve always been confident that Microsoft makes some fantastic products for business in terms of ERP and CRM solutions. They’ve always been committed to their offerings and have a loyal customer bases so in that sense I’ve always had tons on confidence n Microsoft. But I am certainly more excited about the vision. I think Microsoft is showing a lot of vision and emerging as a Market leader when it comes to enterprise business software. More than I’ve seen before. With this shift to Microsoft Dynamics 365 – it’s funny, I’ve read various accounts of it online which describe this as a branding shift more than anything, sort of relabeling of what we previously knew as Microsoft CRM or Microsoft Dynamics NAV or GP or what have you, under this Dynamics 365 label. Much the way we’ve seen on the office side with Office 365. I think it’s much more that than this. I do agree that there is a branding component and its long overdue frankly. I think MS has had a real challenge in their Dynamics business with branding. Partly because they acquired most of these platforms. Not CRM so much, but on the ERP side we’ve seen Microsoft acquire NAV, GP and AX – all which had customer bases in existence. So, it was always difficult for them to create a harmonized brand around these products because they had to maintain the legacy branding to some degree.

So now finally, we are seeing this shift to more of this harmonized brand where D365 is the umbrella brand which represents enterprise business capabilities in the cloud. Which I think is significant just from a marketing point of view. It helps the customer make a lot more sense of what the Microsoft offering is. From an actual capability point of view I think it’s a fantastic change. I think what it represents is the breaking down, at least notionally at the outset, and eventually in concrete terms, of these traditional silos between what you would call CRM or front office capabilities and ERP or back office capabilities. Now MS is starting to evolve capabilities that are oriented around specific business processes – like Sales or Finance or Operations – and making them available to customers basically as Apps in the cloud that will ultimately share a common data model. I think this is a massive shift and something to get very excited about.

Jeff Bacon: Yes, If I could add to this from a technology standpoint – what we saw when Dynamics 365 was being released is that it’s made Microsoft somewhat cool again. We had a lot of siloed base applications – CRM and/or NAV – and to extend these platforms or to get them to work with even Office was a big release. What we are seeing now is breaking down technology barriers. You can run these tools on a mobile phone or on a website – it doesn’t matter. It’s taking infrastructure out of the game. There was a huge outlay in terms of getting things set up and integrated from an infrastructure standpoint. You don’t have to worry about that anymore. It’s just a service you plug in and you bring your own device. On top of that, Microsoft is adding some cool little goodies like Microsoft Flow for example, so it you want to have workflows that operate between these tools – like finance and CRM – you can start to have an enterprise level workflow that works in between these things as a service that you bundle in.  So, you are starting to get a lot more real integrated enterprise applications. Not just these siloed base tools that we used to have as well.  It’s breaking down the barriers from a technology perspective.

Jason Gumpert: You’ve named a lot of the new technology that you see coming down the pipe and I absolutely agree that there is a lot of promise with a lot of those areas and they are doing a lot of things different than in the past. Do you feel like the prospects you are talking to, or the existing customers you have, that they are getting the message that there are some things that are different now in the future roadmap that are diverging or taking a very different approach than in the past?

Jeff Bacon: I still think there is a messaging challenge. They know that there is something different with Microsoft Dynamics 365. However, my sense is that it isn’t driven by a brand or by Microsoft, it’s actually a little bit more subtle that that. Its driven by the fact that their own IT strategy is dictating the fact that they need to do something about their aging servers or equipment and they want to move in an online world. And then of course the path leads to – well what is Microsoft offering. Then they start looking at Dynamics 365 and from there, because it is Microsoft, they have ample complexity with regards to licensing. It is our job to help them navigate the options and determine what the right solution is. What the right level of services are in the cloud world. It’s a very different world than what it used to be, which was pretty easy. Buy some licenses, get a server stood up and away you go. In the new world it is a little bit different. It is very easy once you get there but at the same time, clients need a lot of guidance in terms of understanding what the right level of service subscription really is. To answer your question, I think clients are getting it but it’s almost self-dictated by the fact that they are wanting to move to the cloud and they already own Microsoft.

Other highlights of the podcast include:

• 2:50 – Why Catapult chose to refocus on Dynamics 365/CRM rather than Salesforce
• 8:30 – On becoming more excited about Microsoft’s current technology vision.
• 13:05 – Are buyers acting on updates by Microsoft and other vendors, or are they evolving their own approach to investing in technology away from on-premise?
• 17:15 – On Dynamics partners picking up value-added competencies related to planning, deploying, and managing public cloud infrastructure
• 28:15 – The impact of the Cloud Solution Provider (CSP) model on partner software and services offerings in the future.
• 32:00 – Why CSP’s evolution makes Microsoft more interesting than Salesforce.