The Return of Microsoft Dynamics: From Lost Colony to Work in Progress

It’s taken a while, and some prodding, but Microsoft has finally stood up and acknowledged that its Dynamics portfolio of enterprise software products are strategic enough to warrant talking about. I count it as a big positive for the market that the former Lost Colony of Dynamics has been found again.

But while the overall picture of Microsoft as a cloud and desktop juggernaut that also sells enterprise software looks enticing to customers and threatening to competitors, the fact remains that the daylight finally shed on the Dynamics part of the business shows a number of homegrown challenges that are still to be surmounted. So, kudos for getting the Dynamics brand back in the limelight, but it’s hardly time to sit back and pretend it’s all smooth sailing from here.

The homegrown challenges are familiar to enterprise software watchers, and those of you who read this blog with some frequency. The basic issues that Microsoft faces are story-telling issues: How to weave all the moving parts that make up Dynamics’ big competitive opportunity into a coherent and cohesive message, one that field sales and partners can take to the customers with gusto? And, conversely, how to give existing and prospective customers a way to connect to the Dynamics story that is both compelling and heads off attempts by competitors to build similar communities of users, developers, and partners, all targeting the same customers?

In the recent past, this looked relatively easy: Dynamics was the best place to show the “one Microsoft” vision of enterprise success. An enterprise customer arguably does need “one of everything” that Microsoft has to offer if she’s going to deploy Dynamics 365, and it wasn’t hard to demo a lot of Microsoft assets – Azure, Office, Sharepoint, PowerBI, Hololens, etc. – in service of the digitally transformed Dynamics customer. Those demos lit up Dynamics’ annual use conference, Convergence, in a rather convincing manner.

That became a little hard when Dynamics was relegated to sitting on the sidelines as Microsoft invested in other, arguably more profitable lines of business, and rejiggered its conferences in order to, in theory, appeal to its different, constituent audiences. The conference changes were perhaps the most troublesome for Dynamics – the end of the Dynamics-only Convergence conference left this community without a home. And the replacements – Envision for business decision-makers, Ignite for the techies, and Inspire for partners – did nothing to provide Dynamics customers and partners with a home to call their own.

Dynamics has been offering up a series of new conferences under the rubric of “Business Forward,” mini regional conferences, a day-long, that do a decent job of passing on information about Dynamics to prospects but do nothing to build community. I went to one in Chicago last year, and, while I was a little disappointed that Dr. Oz was the featured celebrity speaker (seriously? Check out John Oliver’s takedown of this charlatan here), the event was good for what it was.

But not good enough to solve the problem of who and what Dynamics is and will be moving forward. It’s a problem that is going to need more than a single analyst event to rectify, particularly if Microsoft, with Dynamics as a proxy, is going to do battle for the hearts and minds of the big enterprise customers that the likes of Infor, Oracle, Salesforce, SAP, Workday, and others are also gunning for.

For one, there’s a leadership problem. It’s not that the current leadership – James Phillips, Alyssa Taylor, Muhammad Alam, and others aren’t up to the job of leading, on the contrary. It’s that these individuals need a bigger platform for the stories they can tell about Dynamics’ capabilities in order to compete in the marketplace of ideas with the above-mentioned competitors. The need is even more compelling in the wake of the enormous brain-drain that has seen many of the top Dynamics execs that helped create and maintain this community leave for greener pastures – Salesforce.com in particular has become a refuge for top Dynamics talent looking for a little more love than they – and Dynamics – were getting at Microsoft. Those who remain have some catching up to do, and they need a place where they can do that catching up.

This is why I called out the conference problem above. As much as I have grown to detest large, messy conferences like Dreamforce and OpenWorld and SAPPHIRE, these mega-conferences are touchstones of a collective identity shared by their respective user bases. Dreamforce in particular is Marc Benioff’s Woodstock, a fitting tribute to the man and the myth. I wouldn’t ask anyone to recreate that monster – I only need one Dreamforce-caliber conference in this lifetime to attend. But identity is important, and all those Salesforce admins who are now upscaling their careers through Trailhead, or those genuinely caring people who love associating with a company that can’t stop talking about ohana, and has a real voice in the current debate about human and civil rights in this country, or those customers who have great stories to tell about how Salesforce.com transformed their business – every one of them has a personal connection with Salesforce.com that is worth their collective weight in gold.

Oh, and, by the way, Salesforce also sells stuff…just like Microsoft Dynamics. But selling stuff is only part of what Salesforce does, they know it, and they take that knowledge to the bank every quarter.

Over at Dynamics, there’s a lot of cool stuff to sell. I liked what I saw about LinkedIn integration – there are still major issues about how to make sure people keep their LI profiles up to date, because otherwise the data that LinkedIn Sales Navigator wants to leverage may not be as valuable as it could be. (Which is not why my friend and colleague Paul Greenberg has some serious antipathy towards Sales Navigator. His excellent look at the Lost Colony refound can be seen here.)

I’m also impressed with the work that is being done to enable a wide range of developers to build apps that can treat pretty much the entire Dynamic suite as a library for data and objects that can be used to extend enterprise functionality – aka PowerApps and Common Data Store – is as cool and functional as anything I’ve seen from any competitor. With the added bonus that PowerApps are usable by pretty much anyone with a decent Excel background or a basic inclination towards data and enterprise apps. I’ve actually used it, and PowerApps is pretty much the best tool I’ve seen for citizen developers to build great edge apps.

And there are pieces of the story, like the Microsoft Graph, that looks like it might be a good thing for Dynamics, if only someone would talk about it. (I will say for the record, in public, that I have been asking for a briefing on this topic for months and months and months. The fact that I can’t get one means either this is marketing fluff masquerading as good technology or it’s good technology that marketers don’t know how to market. Until we prove the latter I’m tempted to go with the former, frankly. But to be honest, the fact that most of Microsoft has no idea that the very best and only cloud-based ALM tool in the market comes from Dynamics – Lifecycle Services, or LCS –  makes me think there may be something in that Microsoft Graph stuff after all.)

The above, including the parentheticals, highlight the real problem for the former Lost Colony: how to get the word out. The good news for Dynamics is that they have some great coattails to ride in the form of Azure and Office 365. There’s no doubt that Office 365 is pretty much the most successful cloud app around, and Azure is a serious contender in a healthy two-way race with Amazon AWS – with Google Cloud Platform making a serious play as well.

But it’s not enough to draft behind cloud and desktop software, Dynamics has to be deeper in the mix where the decisions on digital transformation and new functionality – IoT, ML, AI, etc. – are being made. And they have to cut through the advantage that their competitors have in the lines of business where the decision makers work. This means stepping away from talking tech to the traditional techy Microsoft audience and begin talking business to the business decision maker.

Despite the fact that Microsoft has a TLA for this effort – talking to the BDM – it’s not as easy as Microsoft would like. And, to be fair, this audience issue bedevils everyone. At Salesforce.com, they’re well ensconced in their core LOB, sales, but there’s a big difference between selling CRM to sales and selling IoT to manufacturers, or even marketing software to marketers  – and Salesforce has to learn the music and the dance steps that these buyers expect to hear when a vendor is courting them. SAP, famously touting its broad LOB support, needs to learn how to both refine its message and extend the appeal of its individual LOB apps – SuccessFactors, Ariba, and, yes, CRM – beyond their individual buying centers. Infor needs to move up and out of a core customer base that is complacently living on last century’s technology and find an audience with the mavericks and dreamers in its customer base. The audience challenges are everywhere, and they effect everyone.

Microsoft is, of course, further challenged by having depended forever on its channel to talk this business talk. While Microsoft has made huge changes to its sales model, including a massive reorg last year that was intended to position its direct sales efforts at LOBs and industries, this is a work in progress that will take years to bear fruit – DNA transplants from selling tech to selling business solutions are painful, take time, and are often rife with casualties. Meanwhile, the Lost Colony aspect to Dynamics for the last few years hasn’t been lost on the partner community, which frankly has been pretty baffled about what’s been happing in Dynamics land. Emblematic of this is the email sent to be me by a partner when she found out I was going to the first-in-a-long-time analyst event: “tell them that we need to know what to call the products we are selling!!” Yeah, I feel your pain.

In summary, the analyst summit was a good one, and a good start on what needs to be a long term process of education, community building, and branding. Based on what I saw, Dynamics has a solid future as a member of the Microsoft family, if Microsoft can keep up its side of the bargain. If only I felt that there was a solid commit from the top: this last go round as the Lost Colony wasn’t the first time Dynamics has been neglected by Microsoft. In fact this on-again-off-again relationship has been the norm since the initial acquisition of Great Plains in 2000.

The result is that Dynamics is still perceived as the baby brother everyone kept forgetting at the mall when they headed for the car, even though little brother is actually both grown up and fully capable of taking a Lyft home instead. And the last several years of silence reinforced what I’ve always wondered about Dynamics: Would it be better off outside Microsoft than inside? As a standalone cloud company Dynamics would definitely be worth, in my opinion, more than the $9.3 billion that Oracle paid for Netsuite. An independent Dynamics would in theory continue to leverage Microsoft technology, it would be able to focus on its partner channel while letting Microsoft sales people sell Dynamics on Microsoft paper, and it would even be in a position to resurrect what was truly a destination user event , Great Plains’ Stampede. Maybe they could even bring back Doug Burgum, the former CEO of Great Plains and the first head of what would eventually be called Dynamics. Maybe not…. Doug is probably a little busy, I understand he’s enjoying his new job as Governor of North Dakota.

But I digress. Which is what I worry will happen next to Dynamics – a digression. What was truly missing at the analyst event was the faintest nod by Satya Nadella or Scott Guthrie that they personally believe in the future of Dynamics. Even a little welcoming video would have been nice. But, of course, they couldn’t be there, they were too busy doing other, more important things. And so the saga of Dynamics continues. Until the next time….