Microsoft is addressing legacy data silos and advancing digital transformation with a combined two-in-one product, Dynamics 365. The new solution, scheduled for release this fall, pulls together customer relationship management from Dynamics CRM and enterprise resource planning from Dynamics AX.

Microsoft Dynamics 365 will also be connected to Office 365 collaboration and productivity apps, and also provide users with data insights from the analytics app Power BI and Cortana voice intelligence.

All this will be built on a single platform and data model, which will allow enterprises to add third-party solutions from a new app store called AppSource. AppSource will provide purpose-built apps for finance, field service, sales, operations, marketing, project service automation and customer service.

Dynamics 365 is not a replacement for the existing Dynamics AX and CRM product line, but an alternative that offers deployment and data management possibilities.

Addressing Digital Transformation Challenges

The new product addresses two significant enterprise issues: legacy data silos and the demands of digital transformation initiatives.

As James Phillips, corporate vice president of Microsoft Business Applications, Platform and Intelligence Group, explained in a blog, “Business processes are at the core of every business. Across all industries our customers are looking to adapt their customer engagement and business operations processes to the digital era, to secure and expand their businesses.

“This digital transformation requires a degree of business process agility — and a unification across the business — not supported by the traditional siloed ERP and CRM approach of the past.”

In explaining why Microsoft chose to name the solution Dynamics 365, Phillips provided insight into how Microsoft sees the future of its CRM and ERP products , as well as how it relates to its Office 365 productivity suite.

“Microsoft Dynamics 365 is our next generation of business apps in the cloud. These apps bring together the full power of Microsoft across productivity, advanced analytics, Power BI and IoT, with the strength of Azure and a new application platform and common data model,” he wrote.

Simply put, it pulls the two worlds of structured business processes and unstructured personal productivity together so business customers can “get work done,” one of the Microsoft rallying cries at least year’s Ignite conference.

Dynamics CRM, AX

Dynamics 365 has specifically been designed to offer a seamless transition for those customers using Dynamics CRM online or Dynamics AX online. While not replacing the traditional CRM or ERP applications, the release does seem to point CRM and ERP customers in the direction of Dynamics 365.

Microsoft is also introducing a new licensing model: It is keeping the traditional licensing model whereby users can license it by application, but also introducing a new role-based model. This will give users access to all applications within Dynamics 365 according to their role and needs in the enterprise although pricing won’t be announced until just before it becomes available.

“Our new role based approach will give customers the flexibility they need to support modern, more agile, more diverse employee roles – enabling them to access functionality across all applications within Dynamics 365. We’ll share additional details on pricing closer to availability,” Phillips wrote.

The AppSource marketplace that feeds into the new Dynamics 365 gives business users access to Microsoft partner Software-as-a-Service (SaaS) solutions. To date there are 200 apps lined up. 

To illustrate the point, Takeskhi Numoto, corporate vice president for cloud and enterprise, cited the example of AvePoint with its incident report app for public agencies,  Veripark’s customer experience app for financial services and the Retail Execution from AFS.

Next week’s Microsoft Worldwide Partner Conference is expected to go a long way to explaining how all of this is going to work.

Microsoft CRM?

While this may look a little bit like Microsoft trying to jostle past Salesforce in the CRM space, what Microsoft appears to be doing here goes way beyond that.

With Dynamics 365, Microsoft is pulling business processes, productivity and customer relationship applications onto the same platform and giving its partners and developer community the space to build on top of that platform.

Of course, Salesforce offers development capabilities, too, but if you stand back and look at it the focus is different.

Microsoft is about offering productivity apps to all kinds of enterprises workers. Salesforce is about managing and providing customer-facing apps, something it already underlined last month when it bought Demandware for e-commerce.  Microsoft hasn't given an exact date for the release of Dynamics 365, but it should do soon.