Are you selling ERP software? Here are some predictions for 2018.
Microsoft will release the full Microsoft Dynamics NAV functionality in the first half of 2018, finally providing a serious cloud product for mid-market organizations (Ok, yes, they have the Microsoft Dynamics AX product in the Microsoft Dynamics 365 toolkit, but this complex product is only appropriate for large organizations). Traditional NAV resellers will be ready to move their IP and customers to the Dynamics 365 world on Microsoft Azure.
Traditional Microsoft Dynamics GP and SL resellers will start to train or hire staff to support the full NAV product on Dynamics 365. They will make the substantial investment in training and sales efforts but will struggle to recover the investments due to low margins on the low per-user price of this product. Many will sell App Store products that offer bigger margins, thus moving them into verticals.
Many partners will take on Microsoft Dynamics 365 CRM, which offers more seats per customer and thus better profitability. Accountants will struggle to implement CRM. Many will look for CRM expertise to lead this practice area. Integration opportunities will become important ways to relate the ERP and CRM solutions.
Microsoft will continue to believe that partners can be profitable on services and will keep margins on Dynamics 365 lower than the cost of selling. They will continue to offer their ERP solutions through Cloud Solution Providers, with no requirements for ERP certifications. The implications of this strategy will take years to resolve. Partners are looking for a true partnership but the volume strategy currently popular at Microsoft will make this difficult.
Sage will continue to be fascinated with their new shiny toy, Sage Intacct. They will try to position it with their other cloud products and will realize that Sage Intacct, a unique technology will continue to build momentum. Sage Intacct will continue to build a quality partner channel, including terminating non-performing partners. Dynamics 365 price point will put pressure on the Intacct channel, but the product will compete with unique functionality – something better than ‘integrates with Office’.
NetSuite will continue to build momentum, even though they are now officially owned by Oracle. They will continue to emphasize the ‘Suite’ aspects of their products. Customers will realize that the suite is really a collection, but the concept is compelling. NetSuite and Sage Intacct will continue their head to head competitive battles and both will move to answer the Microsoft momentum starting in late 2018. NetSuite will start to impact SAP, PeopleSoft, and other traditional large products.
SalesForce will continue to be a disruptor in the ERP market and interest in their ERP product, Financial Force, will grow. Once an organization uses SalesForce, they start to want to relate that data to all the other systems in the firm, including ERP. SalesForce integration will be a differentiator for ERP partners, even for Dynamics 365 resellers.
In the short run, things seem to change slowly, but by the end of 2018, change will be accelerating.
Best wishes for profitability reacting to new opportunities!
I would love to hear from you.
Bill Aiton, President, SSi Consulting, Vienna, VA