Microsoft Dynamics AX: A new ERP is born, this time in the cloud

Announced on Thursday, Dynamics AX differs from its predecessors in many ways. Certainly most notable is that it was born in the cloud; an on-premises option will follow next year. It also borrows heavily from the consumer side of technology, including a browser-based, HTML5 user interface.

Dynamics AX taps Cortana, Microsoft's voice-commandable personal assistant, along with Azure Machine Learning for near real-time analytics through Power BI. Even its name is different, no longer reflecting release dates or versions.

In short, it's a major departure from many of the traditional conventions of enterprise resource planning technology. Will large companies be convinced Only time will tell.

"Most ERP customers remain on older releases and may not have plans to upgrade anytime soon, but, like its competitors, Microsoft needs to show it has a future vision for Dynamics AX -- and its ERP product lines overall," said Chris Kanaracus, managing editor and principal analyst with Constellation Research, via email.

Customers will have the option of hybrid deployments, Kanaracus noted. For example, "you can imagine some Dynamics customers continuing to run their core financials on-premises while choosing the new cloud version of AX for areas such as HCM."

In the meantime, any new ERP product today has to include features such as a refreshed UI, broad mobile support and a cloud deployment option, he said.

Dynamics AX is designed to offer a guided user experience that looks and works like Microsoft Office and can easily share information with tools such as Office 365 and Power BI. With its browser-based client, it's available across platforms and devices; a Windows 10 Universal App will deliver the same HTML5 experience, as will apps for iOS and Android.

A new feature called Task Guides can help users via on-screen guidance. Essentially, a recorder in the user interface can record business processes, explained Pepijn Richter, Microsoft's director of product marketing for ERP, in an interview on Tuesday.

Those processes are then captured in an XML file and stored in a library for later reference.

"Whenever users need to use processes that they don't use every day, they can pull out the Task Guide and the system will guide them," Richter said. "It's a way to be compliant and productive."

Cortana makes it possible to interact with the system using voice commands.

"There's an interesting conversation we often have with CIOs, who often ask, 'Why can my people master a mobile device in hours, but it takes them years to master ERP'" Richter said. "Now we're in a better position to bring what we've learned on the consumer side of the house to make an ERP system people love."

Embedded Power BI puts analytics close at hand, while Azure Machine Learning delivers predictive capabilities that enable companies to offer services such as product recommendations.

A new Workspaces feature, meanwhile, makes it possible for different users to get role-specific views of data, tasks and activities in a tailored experience.

"A finance manager doesn't need or want the same application views as the head of warehousing," Kanaracus said. "If Microsoft has executed on Workspaces well, they should drive user satisfaction and adoption, which has always been a problem with ERP."

Along similar lines, Task Guides could help cut down on training costs, which have been another longtime pain point for ERP customers, he added.

Built on Azure, the new release also introduces enhancements to Microsoft Dynamics Lifecycle Services, an Azure-based service that allows for automated setup on Azure. Pre-built, industry-specific software will be available in the Azure marketplace.

"I think this cloud-first approach was partly taken so Microsoft could use AX to further prove out the viability of Azure for mission-critical apps like ERP," Kanaracus suggested. "It was important for Microsoft to do this sooner rather than later."

A public preview of Dynamics AX will arrive in early December, with general availability of a regularly updated cloud version planned for the first quarter of next year. Subscription-pricing details will be announced next month. An on-premises offering will arrive later in 2016.