This document discusses the cloud and its implications for Microsoft Dynamics. It begins by defining the cloud and describing the different cloud models. It then outlines the benefits of the cloud, including lower costs, reduced maintenance, and increased agility. Some challenges of moving to the cloud are also discussed, such as migration costs, security, and legal issues around data sovereignty. The document uses the example of MedRecruit, a recruitment company, to illustrate how different parts of their business have adopted cloud solutions like Office 365, Dynamics CRM Online, and hosted NAV. It addresses common concerns around security and reliability in the cloud.

1. What Does ‘The Cloud’
Mean for Dynamics?
Chris J.T. Auld
CTO, Executive Director – Intergen
Sam Hazledine
Managing Director - MedRecruit
10 August 2011

2. What Does ‘The Cloud’ Mean for Dynamics
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

3. “Cloud Computing is a model for the procurement
of computing resources whereby they are
purchased as a utility and consumed over the
Internet.”

4. What Does ‘The Cloud’ Mean for Dynamics
Software as a Service Platform as a Service

5. What Does ‘The Cloud’ Mean for Dynamics
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…

6. Cloud Value Proposition
The Why…

7. What Does ‘The Cloud’ Mean for Dynamics
New Economics Reduced Management Increased Agility
• Pay for what you use • No maintenance • Latest software for users
• Predictable costs • Faster deployment • Internet collaboration
• Shift from capital expenses • Instant upgrades • Anywhere access
to operating expenses • Multilayered security • Instant self-provisioning
• Economies/Qualities of framework and backup
Scale

8. What Does ‘The Cloud’ Mean for Dynamics
What is driving investment decisions?

9. What Does ‘The Cloud’ Mean for Dynamics
What are we actually buying?

10. What Does ‘The Cloud’ Mean for Dynamics
Dynamics CRM Online
 1st Class Cloud Support
 Underlying architecture is multi-tenanted
 CRM 2011 is 2nd 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

11. What Does ‘The Cloud’ Mean for Dynamics
Typical Microsoft Dynamics CRM 50 user deploymentDynamics
General costs On-premise cost
Microsoft
Savings
CRM Online cost
=
Infrastructure , Hardware
$85,000 Included
OS’s & maintenance
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%

12. What Does ‘The Cloud’ Mean for Dynamics
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

13. What Does ‘The Cloud’ Mean for Dynamics
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

14. Challenges

15. What Does ‘The Cloud’ Mean for Dynamics
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…
Cost per Month incl
Cost Per Month Savings Per Month Savings per Month
Number of Users Cost to Move
@ $77/user @ $38/user by moving
(36mnth@12.5%)
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

16. What Does ‘The Cloud’ Mean for Dynamics
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 3rd 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

17. What Does ‘The Cloud’ Mean for Dynamics
Who is concerned about security?
Why should I trust <xxx> with critical
systems?

18. What Does ‘The Cloud’ Mean for Dynamics
How secure is your current ‘datacentre’?
+ +

19. What Does ‘The Cloud’ Mean for Dynamics
or
0 People per Day ~120 People per Day
US Airline Fatalities US Vehicle Fatalities
2010 Total = Zero 2010 Average

20. What Does ‘The Cloud’ Mean for Dynamics
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.

21. What Does ‘The Cloud’ Mean for Dynamics
The Legal Minefield

22. 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?

23. A Worked Example
MedRecruit Limited

24. What Does ‘The Cloud’ Mean for Dynamics
About MedRecruit
KEY DETAILS
 Founded 2006
 Started on CRM 3 + Small
Business Server 2003
 Grow at 100+% per year
2nd 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

25. What Does ‘The Cloud’ Mean for Dynamics
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?

26. What Does ‘The Cloud’ Mean for Dynamics
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

27. What Does ‘The Cloud’ Mean for Dynamics
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

28. Questions

29. Thank you
chris.auld@intergen.co.nz
twitter.com/cauld
sam@medrecruit.com
twitter.com/medrecruit