2023: Microsoft’s search for new business application capabilities

One of the highlights of 2022 in Microsoft’s business application ecosystem was the revelation that Viva Sales, the company’s new CRM-agnostic sales experience engine, was developed by the same team that creates Dynamics 365 Customer Engagement apps and Power Platform services. Regardless of whether or not Viva Sales succeeds in the long term, the approach of bringing together productivity tools and business processes could serve as a useful lens through which to assess Microsoft’s broader business application plans for 2023 and beyond. Dynamics applications remain important, but future generations of Microsoft business solutions could look noticeably different in a variety of ways. Let’s take a look at a few recent developments at Microsoft that could affect the future of the Dynamics 365 and Power Platform products and ecosystems.

The world of Microsoft business applications, but not always Dynamics

Microsoft could be working on releasing a new portfolio of point solutions built on the Power Platform that are focused on meeting industry- or role-specific needs. Based on Mary Jo Foley’s report, this so-called “Power House” approach would provide Power Platform licensees with pre-built business applications that serve a range of specific needs: financial approvals, contract management, or production requirements, for example. Microsoft has not confirmed this report, but the concept appears to align with what Microsoft has already demonstrated with Viva Sales: an application and process engine focused on the activities of one or several job roles. Another example is the company’s work on building elements of its own invoice approval service, with mixed results so far.

From the perspective of a traditional Dynamics 365 partner, the idea of ​​customers getting access to a range of pre-built Power Platform solutions could be helpful or a new headache. In an optimist’s world, this could drive more productive conversations between partners and clients, thoughtful analysis of functional and process requirements, digital adoption journeys and long-term technology investment strategy. For pessimists, this Microsoft approach, if true, could serve to slow decision-making, drive inefficiencies in technology adoption, lead to the accumulation of new technical debt as users try to incorporate more limited applications into their organizations, and reduce Dynamics 365 licensing.

2022 also offered some ominous signs of momentum in the Dynamics 365 product line, particularly the risk of the products losing out to Power Platform in terms of attention. Microsoft Ignite 2022, one of the company’s key global events, served as a particularly clear example of this trend, with far fewer Dynamics-focused sessions than Power Platform sessions at the hybrid event. In the case of physical conferencing, Power Platform easily outperformed Dynamics 365 in terms of visibility and perceived investment. Microsoft is fully behind the privately run Power Platform conference, pledging to support its growth in 2023 when the event moves to a bigger venue, the MGM Grand in Las Vegas. Meanwhile, they sent relatively few executives or even product managers to events focused on Dynamics products. An exception to this trend is the Dynamics 365 Business Central team, which brought key representatives to a number of events and demonstrated a consistently high level of engagement with its community.

New strategic opportunities in small and medium-sized companies

In December 2022, Cecilia Flombaum rejoined the Business Apps group with a new SMB-focused strategic growth role within the R&D organization. As she told MSDW, her new role is about identifying ways to scale business application growth in SMBs, including reaching a larger percentage of the Microsoft 365 user base. That mission seems to align nicely with the ideas of the “Power House,” at least to some extent. As Flombaum explained, technology investment decisions in the SMB space are often made by one or two executives, rather than through the kind of distributed process that enterprise organizations often do.

But what will really motivate partners with SME expertise? A new LinkedIn survey conducted by Microsoft channel veteran Guus Krabbenborg suggests that the biggest motivator for partners focused on Dynamics 365 Business Central may be simple: Pay them a better licensing margin.

Faced with other, more indirect ideas that Microsoft is pursuing, such as encouraging more integrated solutions that combine Microsoft 365 with Power Platform applications and services and encouraging partners to seek ISV opportunities through AppSource, a “pay me” approach could simplify partner plans, though it would likely worked against Microsoft’s goals.

For some clues about what the future of Business Central might look like, Microsoft MVP Erik Hougaard cast the investigator’s eye over screenshots taken from a short video of Microsoft’s internal hackathon that was shown during a presentation in late 2022. Some of the clues from the video point to various ideas that would could appear in the future in some form: new onboarding experiences including role-specific settings, use of bots or virtual agents, user collaboration features, process analytics, and perhaps new pre-built BI.

ODOP: One Dynamics One Platform sets the roadmap for cross-application F&O capabilities

The recent “One Dynamics One Platform” roadmap update for Dynamics 365 F&O is “the most significant conversation about engineering roadmaps for Dynamics 365 that I’ve seen in a long time,” according to Microsoft’s Fredrik Saetre. The ODOP plan calls for a “One Admin, One User, One Developer, One Insight” vision in pursuit of a converged Dynamics 365 Finance & Operations and Power Platform experience. ODOP will lead to the prioritization of a range of research and development efforts, the presenters say, with examples including:

  • Move Lifecycle Services capabilities to the Power Platform Admin Center to treat F&O as an application rather than an environment.
  • Easier and more comprehensive integration of F&O data into Dataverse, including extensive use of Azure Synapse virtual tables and analytics use cases
  • More Power Apps embeds. While both model-driven and canvas apps can be embedded in F&O, you can now embed F&O pages in model-driven apps with a new built-in look and feel.
  • A growing list of “aligned concepts for multiple application scenarios” in areas such as master data, business process flows such as quote-to-cash, inventory management and field service
  • Incorporating Power Platform tools for Visual Studio and Power Platform CLI into F&O development

Convergence must occur across a range of technologies, Microsoft representatives explained, with layers coming together at many points, from data to security to storage and administration. But Microsoft also plans to uphold core principles such as avoiding rewriting existing technology, aligning new work with Power Platform, and working methodically with community input.

leadership in 2023

2022 ended with some updates to the business application marketing leadership, rounding off a year of important changes. Alysa Taylor has moved to lead Azure + Industry Marketing, CVP Jared Spataro now has overall responsibility for marketing the Modern Work and Business Applications group, and Emily He has apparently remained in her role as CVP Business Applications Marketing since late 2021 after a move from Oracle.

Earlier in 2022, James Phillips announced his departure from Microsoft, and CVP Charles Lamanna replaced him as head of Dynamics 365 and Power Platform, reporting directly to executive vice president Scott Guthrie. Mike Morton has also been given a new role, with his responsibilities expanding from being General Manager of D365 Business Central to leading all SMB offerings in the business applications group. The strategic leadership of the channel passed to Peter Jensen.

While it’s not uncommon to see Microsoft employees changing roles, the number of new and updated roles last year could be a sign that the group will see more stability in these positions in 2023. And hopefully, it will give Microsoft staff opportunities to better connect with partners and customers in to all parts of the ecosystem.

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