Dynamics Trending Towards the “Master VAR”
Microsoft Dynamics serves as a valuable ERP system for numerous companies, representing a value option for mid-to-large sized companies with flavors that will allow custom solutions without the expense of SAP or Oracle. Most often, the preferred implementation method for this software involves a VAR (value added reseller) or a consultancy. However, Microsoft itself has experienced some difficulties with this model, resulting in a trend towards greater verticality in their reseller networks.
The Problem With Small VARs
In order to market and sell software, Microsoft implemented a multi-channel system wherein VARs would be responsible for recommending and implementing the software on their own. The idea, at the time, was an allowance for custom implementations to match specific business needs. It makes sense, but ultimately Microsoft Dynamics does not receive the marketing that an SAP or Oracle solution does.
Jim Barnes, president and CEO of Envista, a supply chain consultancy specializing in ERP and CRM solutions, believes this to be the case. “In my opinion, the reason why Microsoft struggles as an organization is because it doesn’t spend enough money on marketing,” said Barnes. “Then Microsoft uses VARs to market the product. We're fighting for the same customers, so there's not much cooperation between VARs. It's more of a feast or famine.”
In an environment where you eat what you kill, VARs (who often specialize in specific flavors of Dynamics, such as AX or NAV) do not form a cohesive representative force for the Dynamics product on the whole.
Going beyond the marketing, implementations by small VARs can become difficult when dealing with the larger variants of Dynamics, specifically AX and affiliate programs. Barnes has experience there as well, with numerous successful AX implementations under his belt. As an example, he states, “When you have a client that is, say, $100 million to $1 billion, you have to consider the complexity of the business and find subject matter experts who can speak to the pain points of that client. You won't find that with a two-person company who is pushing software. You need 200-300 people in a firm who understand the problem.”Continued on the next page