AX

1409 Views
li-620-christmas-retail

Threat to channel

Microsoft recently announced that it will launch Dynamics for Retail in April 2014 and the press release was punctuated with the words ‘alliance’ and ‘relationship’. Is it a threat to channel?

In an associated Technet blog post, Tracy Issel, General Manager of Worldwide Retail Sector at Microsoft, talked passionately about the new functionality, the organisations that have helped Microsoft to develop this solution and how it will be beneficial for the retail sector.

A plethora of advantages…

If you read the whole article, you’ll find a customer success story for the large American retailer Ashley Furniture where it is stated: “They ultimately chose Microsoft Dynamics AX Retail because of the direct relationship with Microsoft it offered through Microsoft Consulting Services, (and) because of the cost advantages of Microsoft Dynamics for Retail vs. the competition.”

But who is the competition?

It is likely that in the context of the article, Microsoft was referring to SAP and Oracle in the enterprise space, and specialist vendors such as Micros in the midmarket.

A problem for partners?

But what about the thousands of partners who make their livelihood by developing AX-based applications for this sector? What does the announcement mean for them? Given they have collectively invested millions in creating retail-specific applications on AX, it sounds to me these ‘partners’ are now in the competition camp too.

With a purely commercial hat on, we should enter into business relationships with our eyes wide open. We choose where to place our bets and have to respond accordingly when things change, but when you are partnered with a global organisation with more assets than the GDP of many countries, and one that can make channel-changing decisions without consultation, the partnership is not entirely equal.

We have a strong community of AX and NAV retail specialists in the UK who are now in a position where decades of development could be under threat. And it’s not just about the software – as the Ashley Furniture quote states – the customer elected to use Microsoft Consulting Services (MCS), taking another aspect of the project from a partners reach.

Driving differentiation

Microsoft’s response is likely to be that by taking away some of the time-consuming, capital-heavy development activities, it is giving businesses new opportunities to further differentiate themselves by offering ever-more niche services. It is likely to respond that in certain Enterprise businesses, the customer requires (and expects) a direct relationship with the vendor.

You could argue that this is just an extension of Microsoft’s existing practices.

The ‘classic’ channel has long had to deal with Microsoft selling and consulting directly, it’s just Dynamics being brought further into the fold. You could argue that Microsoft’s investment has kept NAV and AX going longer than it would have done if left alone.

But as someone who’s working with this community every day, and knowing the disastrous impact these kind of vendor decisions can have on a business, I’d rather Microsoft spends its billions of development dollars in making AX 2015 the best platform ever than trying to compete with the community that it relies so heavily on, and yet fails to mention in its press release: its partners.

But what do you think?

Is this the thin edge of the wedge, or is it business as usual with partners having to fight with Microsoft at the same time as depending upon it? Or is it the start of a new kind of opportunity for partners to make the most of whatever interest Microsoft can generate in the retail space?