Introduction and building for cloud
The latest version of Dynamics AX, Microsoft's ERP system, doesn't just have new features like business intelligence, new tools for purchase orders, cost management and checking if you have the materials you need for orders, integration with Office, workspaces that organise the tools you need for different tasks and a new HTML5 interface that means businesses can create custom solutions using Visual Studio. It's also switching to be a cloud service that's only available on Azure – or, by the end of this year, on Azure Stack.
There won't be a version of Dynamics AX 7 you can run on Windows Server, the way you can run Exchange or SQL Server – you'll have to have an Azure Stack setup for it if you don't want to use public cloud.
That means Microsoft's new private and hybrid cloud system isn't just a way to get cloud-style services – including IaaS for running VMs and PaaS tools like storage, Web Apps and Service Fabric. It's also shaping up to be a way to get Microsoft cloud applications on your own server – something that Microsoft originally suggested wasn't likely.
Building for cloud
In many ways, this makes perfect sense. Microsoft is keen to shift businesses to new development patterns for building applications, and that applies to Microsoft's own applications as well.
Dynamics AX is built on Azure services like SQL Azure, it includes Power BI and it integrates with Dynamics CRM Online and Office 365. As those services get updated, so will Dynamics AX; the current limit of 1,000 users per business will go up when SQL Azure can cope with that. (Microsoft won't update Dynamics AX every time an Azure service gets an update though – it will get its own updates and administrators will be able to have some control over when those are applied.)
Just as businesses don't want to build apps that they'll have to rewrite to take them to the cloud, having built Dynamics AX 7 as a cloud service where businesses don't have to worry about buying servers and setting up infrastructure to get it running, Microsoft wouldn't want to write a different version that runs just on Windows Server and loses the advantages of cloud application design.
"The old monolithic three-tier apps don't cut it anymore," points out Azure CTO Mark Russinovich. "They're not agile enough. Teams have problems getting updates into them and they can't scale out on the hardware resources that companies are paying for." Applications built for the cloud are built out of microservices that are easier to update, and they run on cloud infrastructure that's standardised, automated and monitored (and frequently updated itself).
Stacking up the advantages
The claim with Azure Stack is that you get the same cloud advantages of automation and standardisation and frequent, reliable updates, but on your own – likely much smaller – systems; an Azure Stack setup can be as few as four servers.
Deploying new services and applications on Azure Stack will be cloud-style as well, using a marketplace in the Azure Stack Portal or Azure Resource Manager templates. That fits very well with the Lifecycle Services Microsoft has been using to help Dynamics customers get more reliable systems via a standardised setup and regularly updated services, especially for retail customers.
You can work with your own data without having to move it all to the cloud, and if you have data sovereignty issues – something Russinovich says is a major concern for the UK and Germany, even though new data centres in the regions will address much of that – having your own cloud means you don't have to worry about where your data goes. Really, it's about giving customers what they want, he says: "The journey will take time and customers in the meantime have business requirements."
Where to draw the line
Not all Microsoft cloud services
The plan is to have "one Azure ecosystem" but Microsoft has already said that not all Azure services will come to Azure Stack. "Should all services make the transition? There are going to be trade-offs and saying you can take a copy of all of Azure doesn't necessarily make sense," explains Ryan O'Hara from the Azure team. "There are some services where customers benefit from the shared tenancy model, operated at great scale."
The Azure IoT services in particular are set up to deal with streams of data from large numbers of devices and it would take a lot of hardware to run that yourself. "Does an IoT customer want to have the Azure IoT Suite on premise?" questioned Mike Neil, the corporate VP of Microsoft's enterprise cloud group when Azure Stack was announced.
"Right now," he said then, "our thinking is we're drawing a line at PaaS services and probably not bringing SaaS services on-premises." Instead, it would be easy to run the server versions of Microsoft software on Azure Stack – he said "what we'll provide is the resources so you can deploy SQL Server as a template, you can deploy SharePoint as a template". But he also noted "technically, there isn't anything that would prevent this."
Russinovich also suggested that some Microsoft cloud services – including Office 365 – simply wouldn't be ready to run on Azure Stack. "Office 365 has grown up independent of Azure – we're in the middle of a migration to Azure now, but it's probably not something that would be ready any time soon if we did decide we wanted to do it."
Instead, he predicted developers would use the Azure Resource Manager template system that's in Azure Stack and public Azure to make it easy to get new SaaS services designed to run on both. "I think what you will see is a SaaS ecosystem start to build up around that, so you'll see new SaaS apps that can come down to Azure Stack."
Because the Dynamics team was ready to completely rebuild Dynamics AX for Azure, they've already done a lot of the work necessary to make it run on Azure Stack. And while Salesforce shows that businesses are very happy to put their CRM in the cloud, some companies may be less comfortable about having the financial information in their ERP system there, so an on-premise version is still important – and Azure Stack is the way Microsoft is trying to square that cloud circle.
Of all Microsoft's cloud services, Dynamics AX is the most logical to see on Azure Stack, but it also opens the possibility that more of Microsoft's SaaS offerings that are built on Azure (probably those that have launched more recently, like Power BI) could be available on Azure Stack in future.
When Azure Stack ships
Although Dynamics AX 7 is available now on Azure, if you need to upgrade from an earlier version – which really means extracting all your data and business processes from whatever version of Dynamics AX you use and moving them to the cloud service – you'll have to wait a little longer.
Migration from Dynamics AX R3 will be possible later this year, and migration from Dynamics AX 2009 should be available this autumn. But because Dynamics 2012 customers will only recently have installed their systems Microsoft doesn't expect them to be in a hurry to move, so the tools for that will come next year. And you'll have to wait that long to have Dynamics on your own hardware.
In the launch chat, one of the Dynamics team also let slip the planned date for when Dynamics AX will launch on Azure Stack. We already knew from Microsoft's licensing FAQ that Windows Server 2016 (which Azure Stack is built on) will be commercially available in Q3 of 2016. Now we also know that Azure Stack will come at the end of the year.
"The Azure Stack release is slated for December 2016," said Arif Kureshy, the development manager for Dynamics. "Once that is released, [we] will provide a timeline for on-premise."
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