What is Dynamics 365?

Microsoft has announced the upcoming availability of “Dynamics 365”. Set to be released this fall, Dynamics 365 promises to “turn business process into business advantage for organizations everywhere”. But what does that really mean?

Dynamics 365 is a Combination of ERP and CRM

Dynamics 365 is a cloud-based ERP and CRM enterprise system. It was built by Microsoft for maximum flexibility and extensibility.

Dynamics 365 isn’t an ERP or a CRM product, it’s both. Microsoft already has significant plays in ERP (Microsoft Dynamics GP, Microsoft Dynamics NAV, Microsoft Dynamics AX), and CRM (Microsoft Dynamics CRM). Dynamics 365 is the next step in the evolution of a combined ERP and CRM product.

Dynamics 365 will be a starting place for organizations. It is unlikely that it will fit your business perfectly from day one. But once you start using it, Microsoft’s vision is that you’ll find the customizations you need on Microsoft AppSource. (Read on…)

Dynamics 365 Has a “Common Data Model”

Traditionally, enterprise software has been built on a layer of complicated databases. Consultants would have to set up, maintain, and customize databases for unique business processes. Microsoft seems to be trying to move away from this (customized databases are difficult to integrate and upgrade).

Microsoft’s partners are enabled by the standardization and consistency of database schema. They can build innovative applications and customizations with confidence that their solutions can be deployed and used across Microsoft’s entire customer base. Customers will browse these applications in a new store – Microsoft AppSource – which is different from the Office Store and Azure Marketplace.

The common data model also allows for tighter integrations with other apps, such as Office 365 or any other business app with a standardized API. Microsoft Office 365, Power BI, the Internet of Things, and Cortana Intelligence are all central to Microsoft’s value proposition of the Microsoft Cloud and Dynamics 365.

Microsoft is using a common data model so that customizations built for one company can be used at another without complication. This increases repeatibility, lowers costs, and makes Microsoft an attractive option for those evaluating enterprise software.

Dynamics 365 is in the Cloud

Microsoft’s increasing commitment to the cloud means that the availibility of their new product is not a surprise. The cloud also allows Microsoft more control and standardization over the development of Dynamics 365, which is necessary given the common data model.

On-premises users can still go with Microsoft Dynamics GP or NAV; also, Dynamics 365, Enterprise Edition can be deployed on-premises if desired.

There Will be Two Editions of Dynamics 365

Dynamics 365, Enterprise Edition

The “Enterprise” version is going to be a newly developed combination of Microsoft Dynamics AX and Microsoft Dynamics CRM, and will be the higher-powered of the two offerings. Microsoft recommends Dynamics 365, Enterprise Edition for companies with more than 250 employees. It has six modules:

  1. Finance & Operations
    • Previously known as Microsoft Dynamics AX, the operations module contains all of the finance and operations functionality of Dynamics AX. (Which is a lot).
  2. Sales
    • This is the core functionality of Dynamics CRM, with all of the lead management and sales process functionality you need as a salesperson.
  3. Marketing
    • At launch, Microsoft announced a partnership with Adobe for the marketing portion of Dynamics 365; given their discontinuation of Microsoft Dynamics Marketing.
  4. Customer Service
    • The Customer Service module integrates CRM functionality, new functionality, existing Parature functionality, and more Microsoft partnerships.
  5. Project Service
    • For project-based businesses, the Project Service module allows for the estimation and scheduling of projects in Dynamics 365. Great for professional services organizations! This module was previously available as a Dynamics CRM extension.
  6. Field Service
    • For businesses with field agents or workers, this extra module leverages the mobility of the Microsoft cloud and delivers extra features these organizations will find handy. This module was also previously available as a Dynamics CRM extension.
  7. Talent
    • The HCM module of Dynamics AX will be developed on its own track and can be purchased seperately.
  8. Retail
    • The Retail module of Dynamics AX will also be developed on its own track and can be purchased seperately.




Dynamics 365, Business Edition

The “Business” version of Dynamics 365 is the evolution of project Madeira, the cloud-based ERP/CRM. Microsoft recommends Dynamics 365, Business Edition for companies with somewhere between 10-250 employees. It has three modules:

  1. Finance & Operations
    • The finance module is based on Microsoft Dynamics NAV. Some functionality has been removed, however – most notably manufacturing.
  2. Sales
    • The sales module of Dynamics 365, Business Edition is based on Dynamics CRM and optimized for SMB customers.
  3. Marketing
    • The Marketing module of Dynamics 365, Business edition is going to be released in Spring 2017.

Dynamics 365 Isn’t Replacing Other Microsoft Dynamics ERP or CRM Products

….at least not all of them, and not yet. Microsoft has stated that “Dynamics NAV, GP, and SL will continue to be enhanced, supported and licensed to new customers”. Curiously, Dynamics AX and Dynamics CRM are missing from this statement – the two products brought together for Dynamics 365 Enterprise. But in another statement, they said: “we will continue to innovate in, and support, our great Dynamics CRM, Dynamics AX, NAV, GP and SL solutions”.

What’s happening is that Dynamics CRM and Dynamics AX are going to combine and become Dynamics 365, Enterprise Edition: you probably won’t hear Microsoft talk about “Dynamics CRM” or “Dynamics AX” ever again.

Microsoft Dynamics GP, NAV, and SL are sticking around: they have a large userbase, and these products do an excellent job of addressing the on-premise market.


Microsoft’s new Dynamics product has been an interesting development! We look forward to seeing what Microsoft has in store for Dynamics 365 as more details get released.

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