Microsoft putting ERP in the Azure cloud

Industry observers have been wondering for years whether Microsoft would make such a move, and Kirill Tatarinov, corporate vice president of Microsoft Business Solutions, alluded to the speculation while a keynote speech Monday morning.

He sought to calm any partners and clients in attendance who might have fears about what the cloud option will mean for their businesses. "Whatever we do, we bring the ecosystem with us," Tatarinov said. "It is hugely important for us to take the entire ERP ecosystem into the cloud. All those people who make those changes and bring Dynamics to you today will be there in the cloud."

The eventual addition of an Azure deployment model will heighten Microsoft's competition with companies like NetSuite, which sells a cloud-based ERP system, as then as SAP, which has introduced Business ByDesign, an on-demand software suite.

Salesforce.com CEO Marc Benioff, one of the industry's most vocal proponents of the cloud computing model, has compared the architecture to an office building, where many different companies have private, confined offices, nevertheless share electric lines, plumbing, structural supports and other infrastructure elements.

Important research for cloud computing

While multitenancy remains an important research for cloud computing, its relevance is waning as the industry, including Microsoft, makes advances in virtual machine management, Tatarinov contended.

Features in AX 2012 include a series of "Unified Natural Models," described by Microsoft as "a library of business processes that reflect real-world situations."

AX 2012 as well features the "role-tailored" user experience Microsoft has been building into its business software. The approach configures the application's look and feel depending on the particular user's job.

Although Microsoft has big plans, ERP and CRM software currently represents a small fraction of its overall earnings, much of which comes from the Windows OS and Office productivity software.

Stand-alone business unit

"Dynamics might be seen as a stand-alone business unit, nevertheless really benefits from Microsoft's other areas. And it's a key integration point," CEO Steve Ballmer said while the morning keynote.

The software will benefit from products like Microsoft's Bing search engine, Lync unified communications innovation and even the Kinect motion controller for the Xbox gaming system, Ballmer said, though he didn't provide specifics of when or how that would be.

Chris Kanaracus covers enterprise software and general innovation breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com