Offer Microsoft Dynamics as a Hosted Services Under a Subscription Licensing Model


Last Modified 3/12/2007
Posted 11/2/2006

Microsoft Dynamics™ allows customers to choose from multiple flexible solution scenarios, licensing options and deployment models to best fit their evolving business needs.

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Read the Partnering Model Guide to learn how to maximize your software as a service success

Guidance on the growing Software-as-a-Service Opportunity, the Microsoft Dynamics market, licensing options and other key elements of an effective partner offering

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This Presentation gives you an overview of the Microsoft Dynamics Hosted Solution

FAQ for Microsoft Dynamics Hosted Solution

Subscription Pricing flexibility are provided with the help of the Microsoft Service Provider License Agreement (SPLA)

Microsoft Dynamics Business Ready Licensing

Take Advantage of a Fast-Growing Opportunity

Software as a Service presents a significant opportunity for firms such as yours to broaden your customer base and increase your revenues. Software as a service is a rapidly growing market segment within the IT industry. Analysts estimate that SaaS will grow at over 20 percent compounded annual growth rate (CAGR) until 2010, while packaged software is estimated to grow in the high single digits during the same period.

More importantly for your hosted Microsoft Dynamics offerings, in the business applications space, the expected growth rate will slightly exceed general SaaS trends. Customer relationship management (CRM) has been the leader in the business application space and has gained market acceptance. It is expected that hosted CRM will continue to grow at close to 20 percent CAGR.

According to recent surveys, customers are increasingly interested in business application outside of CRM and will be evaluating these solutions over the next 12 to 24 months at an increasing rate. This is important for the area of enterprise resource planning (ERP), for which analysts expect growth to be above 23 percent.

How to Position Your Hosted Microsoft Dynamics Offering

Microsoft believes that businesses can significantly improve their overall productivity by rethinking their financial management, supply chain management, and customer relationship management (CRM) business processes and making their organizations People Ready through the integration of personal productivity software with back end business management applications in a way that is tailored for how people work on a daily basis. Microsoft Dynamics is central to this vision: a line of integrated, adaptable business solutions that works like and with familiar Microsoft software, automating and streamlining financial, customer relationship, and supply chain processes in a way that helps your customers drive business success.

Solutions That Align With Your Customer’s Evolving Business
The growing network of Microsoft Certified and Gold Certified Partners offers customers broad and flexible choices for solutions tailored to fit their business needs. Microsoft Dynamics solutions provide the following advantages:

  • Business fit. Microsoft Dynamics provides your customer with relevant insight because it is designed to adapt to their type of business.
  • Built to change and evolve with your customer’s business and technology needs.
  • An ecosystem of finely tailored offerings helps ensure solutions that fit your customer’s specific business. You can also extend Microsoft Dynamics with other Microsoft software such as Microsoft Office SharePoint® Portal Server, Microsoft Exchange Server, Microsoft BizTalk® Server, and Microsoft business intelligence solutions as well as independent software vendor (ISV) applications.
  • Familiar to your people. Regardless of your customer’s deployment scenario, the Microsoft Dynamics integrated solution works like other Microsoft software you and your customers are familiar with, such as Microsoft Office, Microsoft Internet Explorer, and Microsoft SharePoint.
  • Flexible solution scenarios. Based on your customer’s business needs and existing resources, together with other Microsoft partners, you can help your customers to successfully deploy an onsite Microsoft Dynamics solution that is either fully hosted or a combination of both hosted and local solution components.
  • Diverse licensing options. Microsoft offers a number of licensing options and deployment models for Microsoft Dynamics. Your customer’s business needs to determine the correct choice for both licensing and deployment. Your customers might decide to:
  • License the application up front or arrange for Microsoft Financing
    – OR –
  • Pay on a subscription basis

Licensing Choice

Deployment Choice




On-premise Customer Service

On-premise Managed Service


Hosted Perpetual

Hosted Subscription

Business Proposition for Service Providers

Combining the expertise of a solution provider in networking and hosting with a solution provider’s deep understanding of Microsoft Dynamics, your firm can maximize the opportunity for success in this lucrative market. Since service providers have the opportunity to broaden their offerings in their target markets, engage with VARs and ISVs to extend their sales channel, and increase sales and productivity while minimizing operational costs.

  • Broaden Offerings in Target Markets

Through broadening their offerings in various target markets, your organization is able to capitalize on the SaaS market opportunity through expanding service offerings with Microsoft Dynamics business applications, other Microsoft software, as well as Microsoft infrastructure solutions designed especially for service providers. By leveraging the Hosted Messaging and Collaboration solution to offer a Microsoft Dynamics hosted solution, service providers can quickly capture a large portion of this market. The choices afforded by Microsoft technologies enable service providers to give customers exactly what they want and need.

  • Engage with VARs and ISVs to Extend Sales Channels

As a Microsoft partner, you can participate in the vast partner ecosystem to leverage complementary ISV applications and a powerful sales and marketing channel. Microsoft has created guidance and models to help service providers create lucrative partnerships with VARs and ISVs that already license Microsoft Dynamics and have close ties with customers who need hosted services. By working with these partners, service providers can greatly expand their market reach and achieve a rapid time to market.

  • Increase Sales and Productivity—and Minimize Operational Costs

Service providers can take advantage of cross-sell and up-sell opportunities to increase average revenue per customer and reduce churn.

Business Proposition for Microsoft Dynamics Solution Providers

Microsoft Dynamics solution providers have the opportunity to significantly expand their customer footprint and while expanding their business.

  • Expand Business Opportunities

Microsoft Dynamics solution providers can capitalize on the growing SaaS market opportunity by offering hosted application management of Microsoft Dynamics from service providers. In the past, Microsoft Dynamics solution providers had to rely on selling that next big deal and make all of their money up front. Now, when you win a customer and sign them up for SPLA, you know that you will have monthly recurring revenue. By offering hosted Microsoft Dynamics solutions your organization can benefit from a valuable new revenue stream for your firm.

  • Lower Cost of Sales

Solution providers can cost-effectively increase their customer base by using pre-provisioned hosted instances of their solution for demos as well as proofs of concept. Customers will be able to easily sample Microsoft Dynamics integrated solutions without time-consuming onsite visits. By reducing the amount of resources required during the early stages of the sales process, you can save time and strategically focus more of your resources on value-added offerings and consulting services.

  • Increase Revenues

The Microsoft Dynamics solution provider can increase revenue through concentrating resources on full-rate consulting hours, and by providing software customization and integration services for business applications. As a Microsoft Dynamics solution provider, you can now dramatically increase your revenues by focusing your resources on the business consulting and the integration value of the engagement and away from the provisioning of Microsoft Dynamics and the underlying stack.

Craig Sroda