A new user interface (UI) and architecture originally planned for Dynamics NAV 5.0 has slipped for a second time, to late 2008, further delaying major updates intended to modernize the product's technical foundation. In addition, general availability of the Microsoft-hosted CRM Live customer relationship management (CRM) service in the first half of 2008 could give other Dynamics CRM hosting partners a head start on Microsoft, since those partners will build their services on the packaged CRM 4.0 product, which will ship in the fourth quarter of 2007.

NAV 5.1 Becomes 6.0

Dynamics NAV (formerly Navision), which Microsoft acquired in July 2002, is an accounting and business management package for midsize businesses. It is perhaps the most widely deployed of Microsoft's enterprise resource planning (ERP) products, which include Dynamics AX, GP, and SL. As of early 2007, the product has more than 60,000 customers, many of which are manufacturing or distribution companies. The product's most recent revision, NAV 5.0, was released in Apr. 2007.

That release was originally intended to deliver major updates to the product's architecture and user and programming interfaces. However, in early 2007 Microsoft quietly split the release in two, deferring the more sweeping product changes to a second NAV release (NAV 5.1) scheduled for the last quarter of 2007. The changes deferred until NAV 5.1 include the following:

• A new Web Services API to allow developers to extend NAV using development tools and languages other than NAV's proprietary ones
• A more flexible and scalable three-tier architecture (NAV currently employs a two-tier, client-server architecture) and a rewrite of the product's runtime engine to use the .NET Framework
• A new UI based on Windows Forms, the .NET Framework's graphical library for forms-based client applications
• Improved integration with the SQL Server Reporting Services managed reporting platform and the Windows SharePoint services portal and collaboration platform.

In Oct. 2007, the company announced another delay, pushing the NAV 5.1 release into the second half of 2008. Furthermore, the company has renamed the release NAV 6.0.

A blog post by Darren Laybourn, general manager of research and development for the NAV product, indicated a final beta of NAV 6.0 would be available in the third quarter of 2008, which suggests that the product will probably be generally available in the fourth quarter of 2008. As a result, partners and customers anticipating these updates will probably have to wait at least another year. Furthermore, the slip delays the debut of a major component of Microsoft's plan to rationalize its ERP product line—the technology foundation of the NAV 6.0 UI also will serve as the foundation for future releases of other Dynamics ERP products.

The NAV delay likely reflects the ongoing challenges of rationalizing the products gained in Microsoft's acquisitions of Great Plains and Navision earlier in the decade: the company continues to develop and maintain each of those four overlapping products while making the difficult and far-reaching architectural changes required to modernize their underlying technology foundations and pave the way for eventual product consolidation.

NAV is not the only recent Dynamics product to slip—in fact, each of Microsoft's most recent Dynamics ERP releases shipped later than originally planned.

CRM: Price Cut for Partners, Live in '08

A new pricing plan for Dynamics CRM 4.0 (previously code named Titan) along with delays in Microsoft's own CRM Live service could help partners offering hosted Dynamics CRM services weather Microsoft's entry into the hosted CRM market.

In Jan. 2006 Microsoft introduced a subscription-based licensing program designed to encourage hosted solutions on the Dynamics CRM 3.0 product. Under the program, partners offering hosted services paid Microsoft a cut (US$25 per month per customer) of the recurring fees charged to their customers rather than paying for the product upfront. At Microsoft's European Convergence conference in Oct. 2007, the company announced that with the release of Dynamics CRM 4.0 the fee will drop to US$15 per month per customer.

Also in Oct. 2007, the company indicated that CRM Live would become generally available in the first half of 2008 (lack of a more precise date suggests it is likely to be late in the first half). Earlier Microsoft announcements hinted that general availability would be in early 2008, immediately following a trial period for selected early adopters that would run through the end of 2007.

The new licensing model will further lower the startup and ongoing costs for Microsoft's CRM hosting partners, which should translate into increased profitability, lower prices for their customers, or both. The CRM Live holdup could also work to hosting partners' advantage. Since those partners will build services on the CRM 4.0 product, which Microsoft plans to release by the end of 2007, they could have up to a six-month head start on Microsoft's CRM Live service.

However, partners will ultimately face stiff competition from CRM Live—although the new pricing plan will lower their costs, Microsoft will always enjoy a more favorable cost structure, since it does not have to pay for the underlying CRM software.

Resources

The Dynamics NAV home page is www.microsoft.com/dynamics/nav.

More information about the Dynamics NAV delay is at blogs.msdn.com/nav/archive/2007/10/21/microsoft-dynamics-nav-5-1-becomes-6-0-delivery-date-h1-of-2008-becomes-h2-of-2008.aspx.

The Dynamics CRM home page is www.microsoft.com/dynamics/crm.