The Cloud is hot. Everybody seems to be talking cloud computing like it is the holy grail of computing. I try to have a bit more cold headed view of it since I am often faced with the complexities of integrating systems with each other, I often find that it can be very complex to integrate two systems residing in machines next to each other, adding a level of complexity by placing these machines on the internet does make integration more complex and costly.

The cloud does have its advantages though, for smaller companies, like my own, there is no need to own and run large servers. We, at CRM-Konsulterna, do not run any servers at all. The one server that we actually need, our lab environment, is actually hosted aswell, but on a infrastructure level.

I was tipped by Software Advice about an interesting article on Microsofts push on cloud computing for Microsoft Dynamics. You can read it here: It addresses some quite interesting points from a Dynamics perspective, not only CRM.

I think that you need to understand the background in order to understand why Microsoft are pushing this so hard. The traditional on-premise deployment type of systems has always been Microsofts strongest area and Microsoft has for several reasons, like risk reduction, scalability etc. to have a business that is partner based. It is also heavily focused on adressing the IT part of customers business, which is natural when coming from their background.

The recent years have shown that companies like Google and deliver very competent cloud based services and this seriously endagers Microsofts core business model since it shortcuts Microsoft offers by adressing the business decions makers directly and circomventing the IT-departments. This is a outspoken stragegy for companies like

So, what Microsoft tries to do is to compete on the cloud market and the on-premise market at the same time while still trying to hold on to their partner network and maintain their loyalty. This is of course quite complicated since many Microsoft partners have made a living by installing and selling Microsoft software. There are new models for cloud based service reselling but it does feel like there is going to be a bit of a downside for many partners.

From our perspective, as CRM-consultants, we are happy to offer CRM in any flavor since our main businesses is not selling the licenses but around helping our customers leverage the power of the system by adapting it to their needs. Hence it does not really matter if it on-premise or in the cloud.

However, from a technical perspective, we do recommend either partner hosted or on-premise since that substantially reduces the pains of integrations and adaptions compared to a Microsoft hosted solution. So, our recommendation to our customers is usually to choose partner hosted as that relieves  them of the burden of managing the server etc. and at the same time gives us all the advantages of adapting the system to their needs.

The fact that Hunter Richards mentions about the different architectures of the Dynamics ERP products is true but does not really affect Microsoft CRM since it has a good Cloud platform, even though there are some adaptations that only can be done on on-premise or partner hosted systems, it is a very competent and flexible Cloud system and the new version CRM 2011 is even better.

It will also be interesting to see how Microsoft will mange the partner channel in the future. It is something they, with their current business model cannot do without but at the same time something that slows them down a bit since partners naturally are slower to move than inhouse consultants.

Gustaf Westerlund
CEO, Chief Architect and co-Founder at CRM-konsulterna AB