In-Depth

Convergence in the Cloud: Dynamics, Azure and Going Hybrid

Microsoft might be "all in" for the cloud -- where it now has competition from Salesforce.com and VMware -- but its Dynamics applications will likely benefit most from a hybrid model.

• By Lee Pender
• 06/01/2010

Never before has the word "convergence" been so appropriate a description of Microsoft enterprise-software offerings. The company has long called its annual Dynamics conference (last held in late April) Convergence, but now products and product categories really are beginning to converge in Redmond.

Just a couple of years ago, enterprise resource planning (ERP) applications were the centerpiece of the Microsoft Dynamics product collection, which consists of four ERP suites and a multi-platform customer relationship management (CRM) offering. But now Redmond is selling CRM first -- particularly the Dynamics CRM Online service the company hosts itself.

Microsoft offers three versions of Dynamics CRM -- its own hosted service (Dynamics CRM Online), a version hosted by partners and an on-premises deployment. At Convergence, it was Dynamics CRM Online that gomost of the attention, says Josh Greenbaum, principal at Enterprise Applications Consulting in Berkeley, Calif.

But it's a hybrid model, Greenbaum believes -- rather than a pure hosted model -- which will be most critical for Dynamics.

"Windows Azure is turning out to be the thing that's going to propel Dynamics into the forefront of Microsoft strategy," he says. "The value-add is going to come from the business services that Microsoft can provide on top of Windows Azure."

Java and the Cloud
Two Microsoft competitors, one of which is not a proponent of the hybrid model, made news in April with a Platform as a Service (PaaS) offering that will provide some competition for Windows Azure. Hosted-applications giant Salesforce.com Inc. and virtualization titan VMware Inc. have joined forces to create VMforce, a Java-based cloud-development platform that's due out for a preview in the second half of this year. The VMforce platform will be a cloud-based development platform for Java developers, who number about 6 million worldwide, Salesforce.com and VMware officials say. With VMforce, developers can create .WAR files in Java and drop them into VMforce.

VMforce is an "hermetically sealed environment," says Mitch Ferguson, senior director of alliances at VMware. "The Java developer downloads [the .WAR file] into VMforce, and we handle everything from there," Ferguson explains.

New Battlegrounds
The new platform will provide some competition to Windows Azure, says Ray Wang, partner for enterprise strategy at Altimeter Group LLC in San Mateo, Calif., but it'll mainly serve as a rival to other Java-based platforms.

"VMforce is more a threat to other Java vendors," Wang says. "The decision to go .NET PaaS via Windows Azure remains safely in Microsoft's camp, but the Java and .NET wars now move to a new battleground."

It's on this battleground that Windows Azure, VMforce and other platforms will fight the wars of product convergence. Enterprise apps like Dynamics will end up running on or combining with one platform or the other -- or both -- but Microsoft and the VMforce team have thus far set out different visions for how the convergence of apps and platforms will take place.

Salesforce.com and VMware emphasize the software-free nature of VMforce, touting its automation capabilities and its lack of complexity.

"We're going to make [VMforce] a more abstract platform where you don't have to deal with the lower-level infrastructure as you do with the Windows Azure platform," says Eric Stahl, senior director of product marketing at Salesforce.com.

Greenbaum, however, contends that hybrid connections with on-premises software will make Windows Azure more appealing than VMforce.

"VMforce put a stake in the ground that I think Windows Azure can compete against very successfully," he says.