Understanding Dynamics 365: What You Need to Know and How it Affects Your Business

At the 2016 Worldwide Partner Conference in July, Microsoft CEO Satya Nadella announced the release of Dynamics 365. Here’s the video:

In his keynote, Satya talked about a platform that would encourage the creation of purpose built, micro business applications; getting away from suites of software and into role based apps.

… digital transformation won’t happen with another bolted-on cloud app or a giant implementation of monolithic and closed business application packages that take half a decade to customize and deploy, and another for employees to begrudgingly learn how to use.

Digital transformation requires systems of intelligence that are tailored to each industry, each company, each micro-task performed by each person. Systems that can learn, expand and evolve with agility as the world and business changes.

Moving forward, Microsoft said it will offer the platforms formally known as CRM and AX (ERP) under the umbrella moniker of Dynamics 365.  This announcement was met with favorable press from the Wall Street Journal and ZDNet among others.  

The official unveiling was made at the Dynamics User Group Summit in Tampa.  You can watch it unfold here.

The roadmap for the entire Dynamics 365 stack is below.  You’ll notice that Dynamics GP and Dynamics SL will continue to be supported and developed.  Dynamics NAV is the basis of Project Madeira, which will become Dynamics 365, Business Edition.  The Business Edition is a lighter version of Dynamics 365 aimed at the SMB market. 


With the avalanche of information pouring in on Dynamics 365, we wanted to answer some nagging questions you may have on how this new approach will affect your business.

“So what is Dynamics 365, really?”

At first glance, it’s a new pricing and marketing scheme.  Dynamics 365 will include the platforms we know as AX and CRM, and be connected by the Common Data Model (more on that below).  Microsoft wants to make it easy to buy sales, service, operations and financial workloads either in a bundle or a-la-carte.  Seems simple enough, right?  

But the real power comes from the possibilities provided by the Common Data Model.  This will allow for easier integrations, cross platform BI and workflows, easier discrete application builds and a robust marketplace and ecosystem.  Partners, businesses, developers and end users will all be able to build industry specific apps directly from the CDM.

The goal of Dynamics 365 is to make it simple for businesses to purchase and implement.  So instead of businesses purchasing CRM for sales and service, and AX for finance and operations, users can purchase individual workloads.

So for example, if your company wanted to ditch their legacy field service system ONLY, they could purchase workloads of Dynamics 365, without having to buy the ‘whole hog’ of CRM and AX and a stand-alone mobile app platform.  And if your businesses wanted to switch their sales team to Dynamics 365; it’s as easy as adding the sales automation workload. 

“I’m an existing Dynamics AX customer.  What does this mean for me?”

Well first of all, if you are an AX online customer, you will not have to re-implement or migrate.  Dynamics 365 has been designed for a seamless transition for existing AX and CRM online customers. 

Speaking last month at Ignite, Microsoft’s Mike Ehrenberg said, “When AX customers get the AX Fall release, the easiest way to think about it is…..the name will change.  It will say Dynamics 365 for Operations.”  Existing AX7 online customers may elect to continue to use their existing plan, but upon renewal must upgrade to a Dynamics 365 SKU.

If you are a hybrid or hosted AX customer, you should follow the coming news closely for your options.  You can find more information in this roadmap which discusses support in 2017: Dynamics AX Roadmap.  Partners like Hitachi Solutions are also offering service plans to ease the transition to the cloud, if you’d like to chat with us about this, click here to email us.

“I’m an existing Dynamics CRM customer.  What does this mean for me?”

 “Same thing is true with the CRM Update; customers will see the new naming (Dynamics 365),” said Mike Ehrenberg.  Existing CRM online customers may elect to continue to use their existing plan, but upon renewal must upgrade to a Dynamics 365 SKU.

A Microsoft issued timeline is available here

“What will it cost?”

The official price guidelines will go into effect on November 1.  Plans start at $50 user/month.  As some in the press pointed out, the plans are not simple, but that is probably because there are multiple ways to bundle, group and tier.  You can see an example of tiered pricing below. And of course there are Salesforce and Oracle switcher discounts which can reduce your price by as much as 20% for certain deals.  A Business Insider headline recently read “Microsoft will launch its price war with Salesforce on November 1.   So we are seeing that compared to a standalone enterprise platform, the combined power of Dynamics 365 with the rest of the Microsoft stack looks to be a pretty good value. 


“What is this Common Data Model?”

Simply put, the Common Data Model is a unified approach to traditional CRM and ERP solutions that allow for the delivery of new purpose-built applications.   The PowerApps team explains it as, “The CDM is the Microsoft Azure–based business application model and storage mechanism for the Microsoft business application platform.”   The CDM comes as a set of standard entities that ensures your legacy AX and legacy CRM data models can talk to each other.  It comes out of the box with a set of business entities (over 100) that span common data points in AX and CRM (think accounts, contacts, quotes, etc.). The CDM roadmap will continue to add standard entities and will include other data sources too. You can extend these entities and add custom entities as well.  Here’s a great tutorial. But wait, there’s more….

“What is the difference between the Business and Enterprise versions?”

The Business version is the incarnation of Project Madeira, and is being rolled out to the SMB market. This version came from Dynamics NAV.

The Enterprise version is a based on the combination of Dynamics AX and Dynamics CRM and linked by the Common Data Model. For clarification, Hitachi Solutions is currently focused on the businesses that will use the Enterprise edition.

“What is Hitachi Solutions doing with Dynamics 365 to improve our customers’ experiences?”

We’re doing everything. Aside from prepping our go-to-market to explain the changes to our customers, our consultants and developers are digging into the common data model to try to uncover new opportunities for productivity.  Our industry solutions are being updated to reflect the new data model.  And our development team is looking into how to leverage Flow across applications and how to use Power Apps for quick and easy app development.  We have a number of solutions on the AppSource and the PowerBI Showcase.  

We will also be continuing this Dynamics 365 conversation in this space in the coming weeks. Much more to cover. Stay tuned!

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