I am very excited about getting solid coverage on a new development in the accounting/ERP software space: Microsoft Dynamics 365 for Financials. It is quite technically sound and very robust on features. Because of that, it is Microsoft’s strongest foray into small and midsize business (SMB) financial products and the one with the best chance of success. One of the goals of this article is to let readers know what markets Dynamics 365 is aimed at, its pros and cons, and how it is positioned against other SMB accounting products. All of this, from the experience and vantage point of someone who has been very well ingrained in QuickBooks products and the Intuit Reseller Program.
Mario Nowogrodzki will present the sessions, MICROSOFT DYNAMICS 365 FOR FINANCIALS: A POWERFUL NEW OPTION, and ADVENTURES IN INVENTORY: CHOOSING THE RIGHT SOLUTION, at Accountex USA 2017.
In this series of articles, we discuss:
- Market positioning of the Microsoft offering — Introducing Microsoft Dynamics 365 for Financials
- Becoming a Microsoft Cloud Solution Provider: Our Story (this article)
- Pros/Cons of the Microsoft partner program
- Product features, functionalities, and technical background of Dynamics 365 for Financials
Available Only Through Partners
Dynamics 365 for Financials is aimed at SMBs with less than 300 employees and, as such, is in a similar space to QuickBooks Enterprise — which is my firm’s focus area of consulting. Dynamics 365 for Financials is priced at $40 per user per month. This also puts it at a competitive price point when compared to QuickBooks Enterprise on a hosted environment. One target market for this product is organizations that are outgrowing their basic accounting software — for example, QuickBooks’ user and transaction limits — or that are looking to replace older systems.
Of particular interest to us was the fact that Dynamics 365 for Financials is available only through resellers (Microsoft Cloud Solution Providers) and is not sold directly by Microsoft. We had been looking for an SMB software partner program that does not include competing for customer sales directly with the software company per se. On a recent call with our Microsoft partner manager, I said: “You had us at ‘It is available only through partners’” (to borrow from a famous phrase from Jerry Maguire).
The Business Case
The cloud is transforming how businesses consume information technology, including financial and business management software. SMBs are rapidly moving to the cloud and this shift is creating new revenue streams for partners. Microsoft Dynamics 365 is part of this generation of business applications that enable organizations to grow, evolve, and transform. These applications unify customer relationship management (CRM) and accounting/ERP capabilities by delivering applications that work seamlessly together with Office 365 and Power BI (Microsoft’s advanced reporting and dashboard solution) to help SMBs manage specific functions across sales, service, marketing, and financials.
One of the inherent advantages of the cloud is the recurring revenue model of subscription-based software. Recurring revenue is a very desirable model for any business. Just ask your telephone, cable, or insurance provider. Research shows that cloud partners have 1.8 times the recurring revenue of other solution providers. It is also known that recurring revenue promotes higher company valuations, which can bring about funding benefits such as improved borrowing terms and higher value for investors.
In this area, it did not take much thinking or convincing — they had us at “cloud business application.”
How Our Journey Began
I was one of the beta testers for Dynamics 365 for Financials, when it was called Project Madeira. The software officially launched at the beginning of November 2016, just prior to the ACCOUNTEX conference. One of my goals at that conference was to learn more about this new entry into the SMB accounting software market.
On the first morning of ACCOUNTEX 2016, on my way down to the conference in the elevator, I ran into someone struggling with a large cardboard box. Although not wearing a conference badge, it quickly became evident that she was a vendor/exhibitor with marketing materials for their booth. Upon reaching the ground floor, we put the materials on their rolling cart and parted ways exchanging pleasantries.
A little later that morning, I walked up to the Microsoft booth and, lo and behold, there was the exhibitor who I helped in the elevator! Using the bit of rapport we had built just minutes before, I mentioned that I was looking for more information about Dynamics 365 and interested in a partner program, if they had one. She introduced me to the Partner Enablement and Recruitment manager for Dynamics 365 for Financials. He and I struck up a very interesting conversation, including the coincidence that he lives only blocks away from where I have family in the Chicago suburbs.
Immediately upon my return from the conference, I registered our firm to be a Microsoft Cloud Solution Provider or CSP. And that is where the journey officially began.
We signed up under what is called the Indirect Provider model (versus Direct Provider). Many resellers prefer this approach because it helps go to market more quickly. Under this model, we partner with a large distributor who provides customer support and billing.
In another article, I will focus on the pros and cons of the Microsoft partner program and the different models that fit different businesses’ goals.
Working With Microsoft
From the very first meetings, I could tell there was a difference. I mentioned to one of my colleagues that I learned more about the partner program in the first hour of the first web conference meeting than in about 10 years of another reseller program of which we are part (one which I helped design with participation in advisory councils, incidentally).
We immediately gained access to professional marketing materials and sales tools, including ready-made presentations and videos for software demos. We also obtained a powerful onboarding checklist — a set of interconnected spreadsheets for drafting an action plan, sales readiness plan, owner readiness plan, marketing calendar, and business modeling tool with revenue and expense assumptions.
Then came the personal attention. Our Partner Manager arranged for a two-day onsite partner onboarding meeting. He and a Microsoft Cloud Solution Architect traveled to South Florida exclusively to meet with us. Also, Microsoft hosted a two-day configuration workshop for partners only, offered in three cities across the country. I had the opportunity to attend the one in Chicago, not long after the partner onboarding meeting.
Since then, we have had standing ongoing meetings with our Partner Manager, to update each other on progress and help us grow as a Microsoft CSP.
Until the Next Installment
This new development from Microsoft presents a new opportunity for SMB accounting/ERP consulting. I am happy to share as we go through the voyage into this new world, facilitating our path to growth and breadth of knowledge together.