m~hance, one of the largest Dynamics GP partners in the UK, also providers of hosted Dynamics GP in the cloud, have announced a move that acknowledges the market direction of ERP delivery. They have committed to Cloud ERP with the creation of a new division named “HighCloud Solutions”. In a letter to existing customers m-hance state, that this will be an “accredited NetSuite Provider supporting customers who are seeking a cloud-based Enterprise Resource Planning (ERP) platform”. In the same letter m~hance talk about the market challenges of migrating large complex installations to cloud based ERP using the current Dynamics products.
So from this do we conclude that for some customer prospects that are seeking Software-as-a-Service (SaaS) that Dynamics is currently uncompetitive, when stacked up against competing ERP suites that were born in the cloud? Although with the new web clients for NAV and GP, the story is improving for cloud hosted Dynamics ERP, the native cloud apps still have the advantage of being developed for the cloud platform and the are easier to provision as a result.
m-hance reassure the Dynamics customers that the company “remains dedicated to Microsoft”, and that “we’ll continue to invest in best-of breed, future-proof Microsoft Solutions to ensure we can go on meeting your needs now and in the future.”
This is an interesting move for the UK ERP market and would seem to indicate that m~hance feel they have been loosing too many new ERP deals and existing customers to competitors in the cloud. They now join other Dynamics partners such as Nolan, using Netsuite to plug the SaaS product gap. This move will also fuel the questions over where the future lies for the long term future of Dynamics GP within the UK, however many companies need a very good reason to consider a major ERP project so for the moment Dynamics GP should remain strong, certainly I know many new sites are still adopting GP in the UK and there is a large existing user base.
Back in Jan 2015 Forbes published this Five Catalysts Accelerating Cloud ERP Growth In 2015 that indicates new hybrid business models that are two tier (cloud and on premise). It also states "net new license revenues for traditional ERP systems have been declining since 2013". It also goes on to talk about the new world of business, " Scale and speed need to be measured from the customers’ perspective, not just from internal – and often highly myopic – metrics. Monolithic legacy, on premise ERP systems have often been designed to match a predictable drumbeat of production". The article is worth a read.