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Microsoft Dynamics AX Software Review

 

Microsoft Dynamics AX Cloud and Hosting Options

Hosting & Software as a Service (SaaS)

Dynamics AX 2012 is available as both an on-premise and a (semi) cloud solution. Dynamics AX was not developed as a native thin-client, cloud-based ERP system and Microsoft does not offer the solution in the traditional software as a service (SaaS), subscription-based pricing model. However, partners and VARs have implemented hosting infrastructures to deliver AX over the Internet from remotely managed data centers. While some of the cloud benefits can be realized, this approach falls far short of native thin-client, browser-based cloud solutions from competing cloud vendors such as Financial Force, Intacct, NetSuite and SAP's Business ByDesign.

For example, even in a Microsoft hosting model, hardware (i.e. storage, database servers, app servers, etc.) is sometimes shared and sometimes not, and each client typically operates with an autonomous SQL Server database instance. This approach is inefficient and contributes to both higher platform costs, longer cycles for upgrades and new versions, and much more IT labor to support both the ERP application and the infrastructure.

The cloud option offered through Microsoft Partners and their colo data centers gives rise to different offerings but also inconsistency and generally weak information security, uptime assurance and Service Level Agreements (SLAs). In fact, almost all Microsoft cloud partners reviewed had no credible ISMS (Information Security Management System) or independent security and hosting certifications (such as ISO 27001 or SAS 70), and SLAs that were both weak and not financially backed.

In fairness, most ERP application hosting partners cite their data centers as having certifications, however, we find this to be misleading. The data centers manage infrastructure, ping and power, and in reality, those facets are routine, backed with redundancy and seldom the causes for outages or interruptions. Instead, hosted ERP applications tend to incur downtime when a software patch is improperly installed, a point release is improperly uploaded or a new version incurs unexpected ramifications. These types of situations remain the responsibility of the application provider, and are not included in any data center assurances, audits or certifications.

Microsoft's hosting and Software as a Service (SaaS) plan is to eventually use the Azure cloud to host the ERP solution directly by Microsoft, although not exclusively. Such a move will likely increase the standards and competencies of Dynamics AX in the cloud, as partners will have to match or compliment Microsoft's hosting credentials if they are to compete.

Since Dynamics AX 2012 versions are hosted by Microsoft partners, the ERP system is locally or regionally hosted in countries around the world. This can be appealing to companies in certain regions with unstable Internet connectivity, in locations incurring more significant Internet latency, for certain types of organizations such as Government and financial services, and for those company cultures which prefer in-country data storage.

Data assurance, security and performance remain the precursors to a valid cloud ERP solution. As part of any SaaS ERP evaluation process, it is critical to validate these factors. Last year, Microsoft achieved an uptime rating of 99.99% and an update release schedule which averaged 24 to 36 months. Most hosting partners didn't fare so well, and the challenges will be increased as Microsoft increases the frequency of upgrades and new versions. From an information security perspective, most Microsoft hosting partners offer standard SSL encryption (at different strengths depending upon the particular country) for data in transit, however, very few offer methods for securing data at rest. This may be a particular concern to companies in states such as California, where laws and liabilities applying to data compromise vary dramatically based on whether stored data is encrypted or not.

A unique feature that Microsoft offers is the ability to create a hybrid ERP system installation, where some components can be housed on premise and other portions can remain in the cloud. This can be a good option for companies that want to house their own database in house and leverage the cloud for data sharing, collaboration and real-time reporting.

Dynamics AX Software Pricing

With the August 1, 2011 release of Dynamics AX 2012, Microsoft introduced a new pricing model—and most notably a shift from concurrent user pricing to named user pricing. The new named user pricing is based on four named user types.

  • Enterprise user - requires access across lines of business or business units
  • Functional user - access to a particular business unit function, such as Accounts Receivable
  • Task user - requires CRUD (create, read, update, delete) permissions to point functions
  • Self-service user - largely read only access, but small edits may be permitted

Along with this change, Microsoft also simplified pricing by reducing what was approximately 150 product SKUs (stock keeping units) to seven SKUs. The reduction comes in large part as a result of bundling various modules and language packs. Interestingly, the former access technology type (e.g. fat client or thin client) pricing calculation has also given way to user types.

Module-based pricing has been eliminated, and software licensing is a combination of named users, server-licensing and devices. ERP software pricing and volume discounts also vary by country. While ERP software pricing is still far from simple, it's getting better and it's actually less complicated than competing vendors such as Oracle, SAP and Infor. It seems reasonable to assume the move to named user pricing will further facilitate a smoother transition to a SaaS subscription pricing model in the future.

While pricing varies, Dynamics AX is priced at the higher end of the midrange ERP market, but much less than Oracle or SAP Business Suite.

Next - Dynamics AX Strengths and Weaknesses >>

Dynamics AX ReviewDynamics AX ERP ReviewDynamics AX Manufacturing ReviewDynamics AX CapabilitiesDynamics AX Software ReviewDynamics AX Hosting ReviewDynamics AX Strengths & WeaknessesDynamics AX Best Fit & Alternatives

 

Microsoft Dynamics AX

 

 

Microsoft Dynamics AX Software Review

 

 

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