Microsoft: Our apps are really coming to Azure! Eventually, maybe

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As of today, none of Microsoft’s major applications are hosted on the company’s Windows Azure cloud. On Monday, the company said that the Azure version of its Dynamics NAV enterprise resource planning (ERP) software, announced last year, is still not ready, with a beta promised for May and general availability by the end of the year. (To be fair, last year, the company did not provide a due date.)

Another ERP product — Dynamics GP 2013 — will go to beta this summer and should also hit the year-end deadline.  Still a third ERP product, Dynamics AX,  will be Azure-enabled in its “next major release,” said Kirill Tatarinov, corporate VP of Microsoft Business Solutions, but he did not provide a timeline.

Microsoft, like other legacy software providers, is trying to navigate the tricky course between its profitable  on-premises software, and the cloud-hosted software delivered as a service. And, perhaps more than any vendor, Microsoft has to figure out a way to do this while keeping its reseller and implementation partners in the fold. Traditional resellers sell the software itself and provide the customization and other services so critical in ERP. When the software itself flows from a vendor cloud, these partners  feel — with reason — cut out of the transaction. That is especially true for partners that now host Microsoft ERP on their own infrastructure.

That’s why Tatarinov and Microsoft COO Kevin Turner, speaking at the Microsoft Convergence 2012 conference in Houston, continued to stress that even Azure-hosted ERP will be “delivered by partners.”  In theory that means Microsoft will not sell those services direct to end users — a claim that some partners don’t buy.

The Windows Azure  platform-as-a-service cloud went live in February 2010  and one reason for the lack of Microsoft Azure applications is the lengthy development cycle of those products. The company has said that its plan is to put all of its software on Azure.

But Microsoft needs to get on the stick. Devoted Microsoft Dynamics partners and customers — mostly small and medium sized businesses — may hold out for these Azure offerings, but the rest of of the world is moving on.  NetSuite has offered ERP as a service for years and now other competitors such as  Workday, the cloud-based ERP brainchild of PeopleSoft founder David Duffield, do as well. Even SAP, the great grand-daddy of old-school, on-premises ERP, offers a cloud-based option in Business ByDesign. Microsoft is definitely late to this party.

Feature photo courtesy of Carlos Gutiérrez G.

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