Microsoft Dynamics: A Managed Services Opportunity?

While the mainstream media focuses on Microsoft-Yahoo today, I’d like to drill down into a rather interesting trend involving Microsoft, managed services and SaaS (software as a service). Seems like Microsoft Dynamics, the company’s ERP offering, is emerging as a platform for managed service providers to potentially host and offer to customers. Here’s why.

For example, two solutions providers — Sunrise Technologies and SolidSpace — are partnering to offer Dynamics AX software as a hosted per-user/per-month service. The duo plans to aim the SaaS offering at smaller manufacturers and wholesale distributors that want to automate business processes without upfront hardware and software costs.

Sunrise Technologies is a Microsoft Gold Certified Partner specializing in Microsoft Dynamics AX. SolidSpace provides IT hosting and networking services for the software industry. It’s safe to expect more partnerships like this to emerge across the MSP and network integrator space.

Hosting ERP, CRM and accounting applications certainly is a hot trend. But it isn’t fool-proof. On January 30, RightNow — one of the larger hosted CRM providers — announced weaker-than-anticipated financial results and the company’s stock plummeted. And an index of SaaS-focus stocks fell nearly 17 percent in the month of January 2008, SeekingAlpha notes.

For traditional Microsoft solutions providers, Dynamics represents a stepping stone into the world of SaaS. But it’s safe to expect competition from Microsoft itself.