Dynamics 365 ERP landscape report

Earlier this year, I was pleased to be asked to contribute my thoughts on the current ERP landscape for the twelfth annual edition of Nigel Frank’s Microsoft Dynamics Salary Survey.

The most comprehensive study of its kind in the global Dynamics ecosystem, the report shines a light the skills, motivations, and sentiments of Dynamics professionals in the global partner, ISV, and customer communities. It also benchmarks the latest salaries and benefits across a range of Dynamics roles.

The new survey is available to download now, and in this post, we’ll take a brief look at some of its key findings. 

Popularity of Microsoft Dynamics products
The most-used Microsoft Dynamics app among end-user customers is Dynamics 365 for Finance and Operations, with 36% of survey respondents reporting that their organisation runs the stable’s core ERP platform. 

Close behind was Microsoft’s other ERP offering, with 35% of respondents currently using Dynamics NAV. A further 21% indicated that they used NAV’s new incarnation, Microsoft Dynamics 365 Business Central. Just 14% of respondents identified themselves as Dynamics GP users.

Dynamics 365 for Finance and Operations was also the most in-demand app according to Microsoft Partners; 43% of Partner respondents reported that the ERP product was the most sought-after by their customers. A quarter of Partner respondents stated that Dynamics 365 Business Central was their most in-demand Dynamics product. Dynamics 365 Business Central is considered actually the most attractive Microsoft’s ERP platform and many F&O companies are considering switching to this new platform.

The growth of Dynamics 365 

Two-fifths of the survey’s end-user respondents are using Dynamics 365 ERPs—that’s an increase of 5% compared to last year. A further fifth expect to use it in the future. Of those participants that planned to upgrade their instance to the most recent, Dynamics 365 edition within the next year, 79% reported taking advantage of new features as their primary reason. Improving productivity was another high-ranking reason to make the switch, with 48% citing this as a motivator, and a further 38% reporting that a drive to move processes to the cloud was behind their planned move. 

A shift to the cloud

Almost half of Dynamics end-user respondents on the whole—that’s organisations who are still using older versions of Dynamics as well as those using Dynamics 365—host their instances on-premise. But this number is falling. Though 48% of users reported hosting on-premise this year, that’s a decrease of 11% on last year’s survey findings, indicating that more Dynamics users are adopting a cloud-based approach

The number of customers hosting their Dynamics instance on Azure is up 31% compared to last year, while those deploying in the cloud through private of Partner hosting dropped slightly from 10% to 9%. Hybrid and Edge deployments also saw a minimal change, rising to 4% from 3%. 

Perhaps unsurprisingly, given its cloud-first mantra, cloud deployment was significantly higher among end-users who’ve already made a move to Dynamics 365.

Just 20% of Dynamics 365 ERP users host their app or apps on-premise, with a further 5% opting to take a Hybrid or Cloud and Edge approach. Notably, this year’s survey saw a 41% increase in Dynamics 365 users hosting their instance on Azure, with 58% of end-users now utilising Microsoft’s public cloud to deploy Dynamics 365.

The report contains interesting data, I suggest to give it a read. It’s a great momentum for Dynamics 365 Business Central…

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