What the Cloud Really Means for Microsoft Dynamics NAV (Navision)
To understand what the cloud really means for Microsoft Dynamics NAV (Navision) we first have to agree on what we mean by the cloud. Forrester published the SaaS (Software as a Service) Maturity Model which probably does the best job of helping to calibrate cloud conversations so that everyone is talking about the same thing. The model is predicated on how the basic question is answered of who provides what and to whom.
The levels of Forrester's SaaS Maturity Model are as follows:
Level 0 is simplifying outsourcing applications to an outsourcing firm. Forrester would argue that this is neither SaaS nor part of a cloud conversation.
Level 1 is characteristic of the manual application service provider (ASP) that hosts applications for other companies. While it can be argued that hosting is part of the SaaS or Cloud conversation it should also be understood that this is the starting point for the conversation and represents the lowest level of SaaS or Cloud maturity. For the Microsoft Dynamics NAV (Navision) customer that has chosen simply to take what they would have previously deployed in house and move it to a hoster would be characteristic of a Level 1 cloud deployment.
Level 2 is the realm of the manual application service provider or hoster that has begun to create and deploy preconfigured instances of the same software that would be have traditionally been deployed on premise or with a hoster as in Level 1. However at this level the hoster is focused on driving down operational and maintenance costs so customization is held to a minimum and the focus is on replicating identical software across multiple instances. For the Microsoft Dynamics NAV (Navision) customer that has chosen to run a preconfigured instance of NAV with a hoster and has agreed that they can operate with little to no customization would be at a Level 2 in terms of SaaS maturity.
Level 3 is what Forrester would call Single Application SaaS. What this means is that the underlying architecture of the product has been rewritten to support multiple clients with one scalable architecture. This is often referred to as multitenant. The best examples of this are Microsoft Dynamics CRM Online and Salesforce.com. At this level of maturity provisioning new clients is simply a matter of adding them to the existing infrastructure. Also at this level customization is most likely limited to configuration. Microsoft Dynamics NAV (Navision) along with most ERP packages would not be considered Level 3 or single application SaaS. The two major reasons are that Microsoft Dynamics NAV (Navision) is not multitenant but instead requires each company to run their own instance of the application. Also one of the great strengths of Microsoft Dynamics NAV (Navision) is its ability to be easily customized. Traditionally level 3 SaaS or cloud applications are designed to limit customizations and instead focus on shared infrastructure and a common application that is universal to everyone using the application. While this can be compelling to a company without unique business requirements it also limits how a company can adapt the business application to meet the needs of the business.
Level 4 is business domain SaaS where all of the applications are provided within a SaaS framework to meet all the needs of a particular business domain. There are very few examples of Level 4 SaaS or Cloud maturity however the Level 4 offerings are emerging. Microsoft is working to provide business domain SaaS within the Azure framework and Microsoft Dynamics CRM Online. However this vision will not be fully realized until Microsoft and partner product offerings can all be provisioned within the Azure framework providing a seamless experience to the client from provisioning to operation. There are current examples of domain level SaaS on the Force.com platform which will soon be matched by Microsoft at least in the Microsoft Dynamics CRM Online domain.
Level 5 is what Forrester would call Dynamic Business Apps-as-a-service and this today still represents a visionary target. The basic idea of Level 5 is that users would no longer have to make a trade-off between the cloud and flexibility. The benefits of a Level 3 and 4 cloud offering come at the expense of customizability and adaptability. However the vision of Level 5 is definitely having your cake and eating it too where users can enjoy the reduced operational costs and maintenance of Level 3 and 4 cloud deployments while not being forced to sacrifice the ability to adapt the business application to their business’s unique needs.
So what does this really mean for Microsoft Dynamics NAV (Navision)? For existing Microsoft Dynamics NAV (Navision) customers this simply means running the numbers to determine if running NAV in a hosted environment delivers operational cost savings that would justify the switch from on premise to hosted. For most NAV customers that have already acquired the licenses and hardware it won't make sense to switch to a SaaS or cloud model. However for a company who has lapsed on maintenance and/or would like to license NAV on a subscription or monthly basis a SaaS model can become an attractive option. Also for a company that needs to frequently change the number of licensed users a SaaS model makes the most sense since under a SaaS deployment of NAV you only pay for the users you need each month.
With the release of Microsoft Dynamics NAV 7 the product will begin to approach Level 3 in Forrester's SaaS maturity model. This will also require partners to adopt a more templated approach to their implementations to truly achieve the benefits of a Level 3 cloud deployment.