Microsoft's (NASDAQ: MSFT) soon-to-be released Dynamics AX 2012 is a major redesign of the vendor's flagship enterprise resource planning (ERP) product – and yet another addition to its five-member Dynamics ERP family.
The other members of the Microsoft ERP product family are: Dynamics GP, Dynamics NAV, Dynamics SL and Dynamics C5.
Dynamics AX 2012 is a more user-friendly and powerful offering than the previous version, Dynamics AX 2009, claims the vendor, which is targeting the product at mid-sized enterprises.
The new version has role-based screens; a customizable, model-driven architecture; and comes with pre-built, extensible applications for manufacturing, distribution, public sector, professional services and retail.
Microsoft has done a nice job of combining process manufacturing, discrete manufacturing and lean manufacturing into one product, said Christian Hestermann, research director for ERP at Gartner.
Microsoft has also improved the software's project-oriented accounting and manufacturing capabilities, which should appeal to such project-oriented industries as aerospace and construction.
'Much to Like' About AX 2012 ERP
"There is much to like about the new version," said Frank Scavo, principal analyst at Constellation Research.
Scavo said he likes these features: the new core ERP features and functions for supplier relationship management and case management; a new constraint-based product configurator; public-fund accounting; project quotation and budget control for service businesses; better multi-entity capabilities; and embedded business intelligence and reporting.
"There is also enhanced interoperability with familiar Microsoft tools such as Word, Excel, Outlook and SharePoint," he said.
With this release, Microsoft is positioning AX as more than just another ERP offering, said Scavo.
Microsoft Pursues ISV Partners to Build AX Solutions
Scavo said Microsoft is pushing AX as a platform for other independent software vendors (ISVs) and business partners to build industry-specific solutions, and is aggressively recruiting partners.
For example, Microsoft signed up LexisNexis to build its legal firm solutions on top of native AX functionality for professional services. Likewise, Aldata is providing fashion and apparel industry functionality on top of AX's retail industry solution.
In addition, Microsoft partnered with Tyler Technologies to roll intellectual property for the public sector into the AX core, enabling Tyler to build government solutions on top of AX.
"Few ERP vendors are moving as aggressively to position their products as a platform for other ISVs," said Scavo. "Smaller ISVs often do not have the resources to keep their products up to date with the latest technologies. By building on top of AX, they can focus their efforts on the part that really counts – the industry-specific part – instead of modernizing legacy code or reinventing the wheel with another general ledger."
The beta of Microsoft Dynamics AX 2012 was released in April. The final release and launch date are set for Sept. 8.
"Microsoft Dynamics AX 2012 frees customers from the electronic concrete that has plagued the ERP industry for so long," said Kirill Tatarinov, president of the Microsoft business solutions division. "Customers want flexible yet cost- effective business applications that work the way they do instead of being forced to adapt to the software."
ERP Game Changer?
Addressing Microsoft's worldwide partner conference earlier this month, Tatarinov predicted that Microsoft Dynamics AX 2012 would be "the game changer" in the ERP industry.
"This is the product that sets the new era for what ERP and business applications ought to be," he said.
It delivers ERP for everybody, added Tatarinov.
"Every single person in the organization can benefit from Microsoft Dynamics and from the powerful simplicity that the products bring to our customers," he said.
"Our ERP system runs the processes that the entire company uses every day," said Bob Jablonski, operations manager of Hydra Power Systems. "It's our life blood; we depend on it."
Jablonski said Microsoft Dynamics AX 2012 delivers "phenomenal" functionality.
"With richer BI capabilities, the ability to easily develop and change business processes, and the ability to seamlessly interoperate with Microsoft Office, we expect to empower all of our employees to get the data they need, when they need it, to collaborate better and, overall, to lower our operating costs," he said.
A Cloudy Future?
While Microsoft has been making a lot of noise about moving all its ERP products into the cloud, the reality is that it is moving them in stages. At present, companies can have their AX systems hosted in partner data centers.
"When the 2012 version is released in August, it will be continue to be available as a hosted solution in partner data centers," said Scavo, noting that hosting in Microsoft's Azure cloud will not be available until the next major version of AX.
"Hosting in partner data centers should be sufficient for most customers," he added.
Scavo noted that customers today tend to be conservative in moving their core ERP functions such as financial applications off-premise, although they may be interested in cloud deployment for selected functions, such as CRM, time and expense reporting, and applications that support the mobile workforce.