What Does The Cloud Mean for Dynamics? Chris J.T. Auld CTO, Executive Director Intergen Sam Hazledine Managing Director - MedRecruit 10 August 2011
What We ll Discuss What is The Cloud Generally The Microsoft Cloud Platform Cloud Benefits Promised Realized The Dynamics Cloud Offerings Cloud Challenges Getting there Security, reliability, legality Real World Example: MedRecruit
Cloud Computing is a model for the procurement of computing resources whereby they are purchased as a utility and consumed over the Internet.
What Does The Cloud Mean for Dynamics Software as a Service Platform as a Service
What Does it Mean for Dynamics Trust Microsoft as a massive cloud vendor Sum Business and Consumer services to establish scale Global Foundation Services (GFS) run all data centers http://www.youtube.com/user/msgfsteam Plenty of Cloud Bits to Consume Even if you don t consume Dynamics from the cloud Office 365, Windows Azure etc
Cloud Value Proposition The Why
New Economics Reduced Management Increased Agility Pay for what you use Predictable costs Shift from capital expenses to operating expenses Economies/Qualities of Scale No maintenance Faster deployment Instant upgrades Multilayered security framework and backup Latest software for users Internet collaboration Anywhere access Instant self-provisioning
What is driving investment decisions?
What are we actually buying?
Dynamics CRM Online 1 st Class Cloud Support Underlying architecture is multi-tenanted CRM 2011 is 2 nd iteration of Cloud offering True Software as a Service Near 100% parity between Cloud and On-Premise Commitment to release to Cloud first New features will land in CRM Online immediately Very fast setup Up and running in 15 minutes
Typical General costs Microsoft Dynamics CRM On-premise 50 user cost deployment = Infrastructure, Hardware OS s & maintenance Microsoft Dynamics CRM Online cost $85,000 Included Savings CRM Software/ SaaS Fees $78,000 $94,000 Operations (1 day / month) $45,000 $45,000 Total $208,000 $139,000 $69,000 Per user per month $115/user/month $77/user/month $38/user/month Back of the Envelope. Incl. External connector, 3 servers. Cost of capital: 12%
Dynamics ERP Online Commitment to ship all 4 ERP s as Online Offerings NAV 7 will be first sometime in 2012 AX, GP, SL will follow with their next versions Caveats We don t know exactly what it will look like yet Don t know how Azure COGs will affect pricing Right Now SPLA Hosted NAV in Intergen virtualized datacentre App-V can deliver additional benefits
What Does it Mean for Dynamics Customers Office 365 is an easy first step for existing customers Light up SharePoint and Lync integration quickly/cheaply CRM Online default choice for new deployments Cost saving are real and significant Migration more nuanced Windows Azure ideal for Customer Portals Cheap (~$200/month) Reliable Scalable independent of Dynamics bits All in the Cloud possible for new businesses Office 365 + CRM Online + Windows Azure ERP Products still >9 months out for cloud support Anticipate more challenges to CRM Online Don t delay ERP investment in anticipation Focus on web services based integration
Challenges
Getting there Migration costs are largely fixed. Similar cost to move 10 users as to move 1000 users Say it costs $25,000 to move our CRM to Online Number of Users Cost Per Month @ $77/user Savings Per Month @ $38/user Cost per Month incl Cost to Move (36mnth@12.5%) Savings per Month by moving 10 Users $770 $380 $836 ($456) 100 Users $7,700 $3,800 $836 $2,964 1000 Users $77,000 $38,000 $836 $37,164 10,000 Users $770,000 $380,000 $836 $379, 164
Guidance for Migration Run the numbers Especially if you are chasing cost savings Are there other reasons to move- can you value them? Don t invest in migration Much of the fixed cost is in up-skill No way for enterprise to re-use these skills Use 3 rd party with skill to minimize cost Consider phased approach E.g. Move code to be CRM Online ready during maint. Endeavour to maintain deployment neutrality Keep on-premise code online compatible
Who is concerned about security? Why should I trust <xxx> with critical systems?
How secure is your current datacentre? + +
or 0 People per Day US Airline Fatalities 2010 Total = Zero ~120 People per Day US Vehicle Fatalities 2010 Average
Comments on Security and Reliability Qualities of Scale 24/7/365 onsite staff Best engineers in the world More redundancy Consider reliability per mile Resist psychological foibles Being in control doesn t make things safer Use savings to improve on-premise assets Save money moving to CRM Online? Spend some of it on a redundant network connection.
The Legal Minefield What Does The Cloud Mean for Dynamics
Legal Questions What do local laws say about data storage? Tax Administration Act requires us to keep sufficient records in New Zeaand http://tinyurl.com/ird-alert Does cloud hosting create a nexus to a jurisdiction? For tax purposes? Anti-trust law? Securities law? Which law applies & courts would rule on any dispute?
A Worked Example MedRecruit Limited
About MedRecruit KEY DETAILS Founded 2006 Started on CRM 3 + Small Business Server 2003 Grow at 100+% per year 2 nd Deloitte Fast 50 in 2009 Originally all on premise; now hybrid on premise + cloud Key focus now is driving operational efficiency HQ is Queenstown Australian office is Coolangatta
Email and Core Productivity KEY DETAILS Email is Mission Critical Don t want anything fancy; Great Outlook support is a must Moving to Office 365 was an obvious choice Moving was harder than we expected; plenty of gotchas Exploring opportunities to use Lync + SharePoint What does Skype acquisition mean?
Dynamics CRM + Customer Portal KEY DETAILS CRM is Core LoB System Users since version 3 Extensively customized Customer self service portal Would like to move to Cloud Not for cost reasons Reliability focus Hard to get there 3 versions of customizations A big functionality work stream Will move portal first Prepare CRM over time
Core Financials KEY DETAILS Been on Xero since day 1 Xero delivers all those promised benefits of Cloud Xero runs out of Ooomph as business becomes complex Integration with CRM Large invoice volumes Buyer generated invoices Moving to NAV; Hosted by Intergen
Questions
Thank you chris.auld@intergen.co.nz twitter.com/cauld sam@medrecruit.com twitter.com/medrecruit