Top 3 Themes for Dynamics 365 in 2018

This time last year I wrote my Top 3 themes of 2017 article on what were the major events and directions from the year for the Dynamics 365 ecosystem. The start of a brand new year always feels like the logical moment to reflect back on the past 365 days, so this sounds like a worthy tradition to keep going. Here are my Top 3 picks from 2018 and some thoughts on how they might influence the direction of the year 2019 ahead.

Power Platform

The biggest single announcement of 2018 came in March when the Dynamics 365 Customer Engagement and PowerApps platforms were merged into one. It wasn’t until July that we began to see the Power Platform term used in describing this new suite of tools that now is the way to extend both Dynamics 365 and Office 365 apps, as well as building brand new apps for customer specific scenarios.All of a sudden the technology that had been bubbling under in the Dynamics CRM corner room is now brought onto the main stage of MS business software show.

The immediate impact was that XRM became CDS 2.0 (Common Data Service for Apps),which probably hasn’t been all that easy for non-Dynamics professionals to understand if they only paid attention to official MS information sources covering the topic. For the Dynamics partners a nice upside in this merger was PowerApps P2 becoming the “naked XRM” platform license they had been asking for many years (compared to the earlier Dynamics 365 Plan license for bundling CRM + ERP, which I don’t think was in as high demand).

A more subtle but equally important change was the birth of model-driven app and canvas app concepts. No, not the marketing terms nor the division into two app types, rather the fact that these different client technologies now had a clear need to start approaching one another in terms of how they behave, what data sources they support and how they are administered. Examples of these have become visible through recent announcements like:

• New Form Editor for model-driven apps that resembles the canvas app studio experience.
• Growing support for relational CDS data source in canvas apps, with support for 1:N, N:N, option sets.
• Unified admin center from where both canvas and model-driven apps are configured.
• XRM solution model became the ALM story for both PowerApps canvas apps and Microsoft Flow.

It would be perfectly justified to call 2018 “the year of the platform”, considering how significantly the investments from MS side seem to have shifted from Dynamics 365 to the Power Platform. During 2019 we’ll see if the partner channel can follow along, to transform their offering into something more in line with the PowerApps story than the traditional CRM business models that have mostly been just revised for the cloud based environments during recent years.

A similar challenge awaits the professionals who’ve been working in this business and now need to figure out how to put their existing skills into use in projects that may not even mention the Dynamics product name anywhere. Plenty of new skills will also need to be acquired for leveraging the broader toolkit. The recent announcement of Dynamics 365 exams certifications to be retired gives an indication of the looming new requirements that await the MCP’s wanting to remain current with their certification record.

One Version

My Nr. 2 theme from 2017 was the App/Plat separation that largely took place as part of version 9 release. Now that Dynamics 365 CE is running purely on Azure after all orgs get to v9, the next logical step is to start delivering new releases on it the same way a modern cloud native product would. PowerApps, Flow and Power BI have already been operating as a service with a single version for all customers and now the platform underneath Dynamics 365 as well as the Apps on top of it are set to transition into this model. The July announcement of how Microsoft plans to deliver predictable updates with continuous deployment for both Customer Engagement and Finance & Operations is another major event of 2018 that will shape the future of these product lines and introduce a new reality for customers who build their digital business processes on top of them. The old CDU process for version update scheduling is no more and everyone will get the April 2019 update bases on the public release schedule.

Whereas the earlier April 2018 and October 2018 updates have felt a bit like a “preview” of how the current Microsoft product group would want to run things, the schedule and communication around April 2019 is starting to show for the first time what the new “business as usual” mode of operation for the MS Business Applications organization is. The roadmap site is back & extended to all products, giving customers a logical place to keep an eye on for information on upcoming features. Still, there are plenty of things to keep an eye on for how the 2019 plan rolls out. The coming update is supposed to be a major release that lifts everyone onto level 10 at once. How the new preview instance system satisfies the testing needs of customers and partners, what actual features of the April 2019 release train are delivered in that version change, how well does the opt-in process and “off by default” policy align with end user training needs. All this & more is going to make 1H of 2019 an exciting time period.

The one version policy naturally doesn’t cover on-premises environments, where customers and partners are still tied into the traditional upgrade projects. In December 2018 the new bits for Dynamics 365 CE Server were finally made available, showing that Microsoft hasn’t stopped developing the on-premises product. There were two years between the latest on-prem releases (v8.2 to v9.0.2), so it would be risky to place any bets on when & how the next release will be delivered. 2019 will see many customers working their way to get to V9, only to be less behind the cloud platform version than before, but those without regulatory reasons to keep running their own servers will hopefully be focusing their energy on planning how to move to the cloud based Power Platform instead.

AI Journey

If the two other top themes have had a fairly big impact on the short term already, then the third place goes to more of a long term initiative that didn’t yet change the lives of Dynamics 365 customers and partners in 2018. However, given how obviously massive the investments from Microsoft are in this area, I think it’s perfectly justified to mark the year 2018 as the start of the commercial AI journey when it relates to Dynamics 365. What Dynamics 365 is to Microsoft’s AI is exactly the same as what it is for other Azure services: the showcase of what these cool innovations from the R&D labs can do when positioned into real world business scenarios. The moment those consumption based Azure services targeted purely for developers start finding their way into user based Dynamics 365 product licenses aimed at business decision makes, that’s when you know the technology has moved a big step closer to mass market.

OK, so the “AI” that software vendors refer to most often isn’t about creating true thinking machines to rival humans in their cognitive processes but rather more about taking the huge piles of data that digital service providers collect these days and applying some machine learning algorithms on top of it (example data sources being LinkedIn’s user network or internal MS Exchange data for organizations). Compare this new generation of software to traditional enterprise information systems that mainly collected data entered by information workers and produced some performance reports from it – then yes, there’s definitely a whole lot of intelligence in what guidance the modern apps can give to end users. The key difference being that while it technically may have been possible to construct such systems in the past, these type of intelligent features are now becoming the out-of-the-box experience that starts to define what the software product is actually perceived to be. Basic CRM systems have long been a commodity and the building blocks used in them are now actively being sold by MS as solutions for quickly developing any kind of business apps, in the form of Power Platform. The dedicated Dynamics 365 Apps for specific business processes will therefore need to become pretty darn intelligent to justify the additional cost over vanilla CDS and PowerApps.

As a part of Satya Nadella’s announcement in March on MS organization changes, the Business Applications Group lead by James Phillips was given responsibility for “Business AI”. It doesn’t come as a surprise then that in Fall 2018 we saw the AI apps become an official category in the Dynamics 365 product portfolio. Separating parts of the Sales, Service and Marketing functionality from the core Dynamics 365 Enterprise Apps into brand new “AI for X” apps makes room for the software suite to further extend its reach into more specific user groups as well as keep growing the stack higher into new price ranges beyond Enterprise. In 2019 it’s going to be interesting to see what the response and adoption from the customer side is going to be for these new products: is this the “AI as a service” that companies using Dynamics 365 are looking for? At least now there will be more concrete examples to start this AI discussion and for MS to gain feedback on which capabilities have broad enough demand on the market to justify building them into ready-made apps instead of raw APIs.

The AI journey does also touch the analytics side of the business, in the sense that in 2018 we saw a broad push of Azure Data Lake as the place where companies should be storing their data from MS and non-MS systems. The original Common Data Service for Analytics announcement from March turned into a silent rebranding of this “other CDS” into Power BI dataflows, which reached a preview stage just before the year’s end. It’s obvious that AI applications will need a lot more data to crunch than what the relational CDS for Apps databases normally contain, so expect to see the Azure Data Lake leveraged in many of the scenarios that MS will be promoting to their Dynamics 365 customers in 2019.