For the past couple of years I’ve done a “top 3 themes” post at the end of the year, to reflect back on what were the key topics that shaped the coming direction of Dynamics 365. Just because this is no longer a “CRM blog” doesn’t mean I should give up on that tradition, so let’s do some exploration on what has happened in the past 365 days.
One year ago I described 2018 as the year of the platform and listed the top themes to be 1) Power Platform, 2) One version, and 3) AI journey. What will 2019 be remembered from? Just like before, it was fairly easy to select three bullets that I think have been most impactful on the Business Applications ecosystem:
- Low-code movement
- Licensing confusion
- Data story evolved
Let’s discuss what happened under each of these themes in 2019 and do some forward thinking on why they’ll continue to be relevant in 2020.
Low-code movement
This first topic is a much broader phenomenon than just Microsoft’s Power Platform offering. During 2019 we’ve seen the general tech media and industry analysts give plenty of attention to the rise of low-code/no-code development and how organizations are exploring its possibilities to augment (or even replace) traditional software development methods when it comes to internal app development. Microsoft receiver recognition from both Forrester in March 2019 and Gartner in August 2019 for its position as a leader in the low-code application platform market.
The term “citizen developer” had of course been used already much earlier in Microsoft’s description of the target group for Power Apps (earlier “PowerApps”) and Power Automate (formerly known as “Microsoft Flow”). However, it’s safe to say that the general interest on low-code is rising much faster, if you look at what people are googling:
What has propelled Microsoft to the top right corner in the analysts’ charts is not just the functionality aimed at everyday information workers / power users in these tools. Making their low-code offering enterprise ready has been a clear goal for Microsoft, as can be seen from how the pro developer audience is being presented Power Platform + Azure as the platform for every developer. On the IT administration side the efforts to put together a Center of Excellence (CoE) toolkit for Power Apps are showing Microsoft’s commitment to providing a governance story to address both the common admin needs of organizations as well as adapting to the varied support needs of the new breed of app makers.
There is a wealth of functionality that’s still just in the MS product team’s pipeline to land sometime in 2020 which will make the Power Apps development process much more like “real” app building. Built-in tools like Power Apps App Monitor will be the go-to place for debugging formulas, analyzing performance and in general taking a peek under the hood of what the low-code declarative app development studios actually produce. The coming Power Apps Test Framework will allow the authoring and execution of proper test cases, to ensure the app quality doesn’t erode as new features and platform functionality are introduced. There will be Power Apps telemetry data available in a similar way as Azure Application Insights provides to custom apps today.
All these platform investments together with the growing interest from customers (and presumably partners, too) should mean that low-code app development will become increasingly mainstream in 2020. This will boost the awareness of different vendors in the category and may well steer us a bit further away from the ever so familiar head-to-head comparison of Salesforce vs. Microsoft that’s founded in their CRM product offering. Dedicated low-code players like OutSystems or Appian may start to appear more frequently on the radar, as well as companies like ServiceNow that are running towards the citizen developer territory from a slightly different background. Oh, and you should definitely expect there to be even more heated debates ahead on the possibilities, limitations and roles of no-code, low-code and pro code!
Licensing confusion
This second theme is in part related to the growing pains of how the Power Platform tools are turning into self-sustained products rather than just an extension method for Office 365 and Dynamics 365. Yes, they are still very much the toolkit for how you customize applications in the aforementioned suites. However, building extensive custom apps with the full low-code platform capabilities is no longer something that “comes with Office” when looking at the latest licensing terms. Citizen developers can still easily get started with the “seeded” plans in Office 365 for their personal productivity explorations, but for the organization wide deployment of low-code solutions, customers should prepare to purchase dedicated Power Apps and/or Power Automate licenses.
In 2019, removing the earlier included rights from Office 365 seeded plans to use custom connectors, HTTP custom actions, on-prem gateway, Azure SQL was understandably something that irritated those early adopters who had dived deep into building Power Apps and utilizing flows on a wider scale in their organization. While I bet many had suspected there would eventually be limitations designed to drive customers towards the paid plans, it might have been a surprise that minimum price point for the required Power Apps user license was kept at $40/month. From the Office 365 point of view, this can sure look like quite a “cliff” for taking app development further.
Another big surprise was the way how Microsoft introduced a new $10 per app pricing model as an option for basically any custom apps built on top of Power Platform. With rights to full feature set of CDS, Model-driven apps and pretty much everything that you’d need for running an app that looks like the native Dynamics 365 apps, it seemed almost too good to be true – if you’re coming from the Dynamics side of traditional CRM style business applications where the enterprise apps cost $95. A great example of the two different realities clashing, when Power Platform can simultaneously be seen as crazy expensive or dirt cheap, depending on the frame of reference.
The policy of licensing the low-code Power tools from Microsoft via primarily a per-user model with upfront payment requirement is sometimes challenging when talking about the business cases for an application platform that would be gradually adopted for more and more app scenarios. There’s no pay-as-you-go option like with raw Azure resources, because Power Platform is a value-added abstraction layer that should remove any direct dependencies to those resources. However, in 2019 we saw MS take things towards capacity based licensing, with the introduction of explicit Power Platform API request limits per user license type, plus the option to purchase additional capacity if needed. Although MS has stated that normal users should be well within the included API quota, there have been many concerns raised from developers on how custom apps and integrations will be impacted. The fact that these new consumption based limits were announced before any metrics were made visible to customers for evaluating their existing scenarios didn’t exactly help in alleviating concerns.
I’ve never spent as much time investigating the details of Microsoft licensing as I did in 2019, and honestly I hope that 2020 would be at least a bit lighter on the licensing changes side. Seeing the rate at which the product portfolio of Microsoft Business Applications is growing, though, I’m not sure if it’s realistic to hope for the size of the licensing guides to shrink anytime soon. We’re also still waiting for some of the October 2019 licensing announcement details to be finalized, like the promised API usage metrics in Power Platform Admin Center, or the updated list of restricted entities requiring Dynamics 365 license. Oh, and I bet in 2020 we’ll see the launch of technical enforcement for the types of apps that each license holder is able to use (1st party, custom, Team Member etc.).
From the customer and partner perspective, the licensing of Power Platform is often perceived as its most complex part, based on feedback from various community members. Although many of the recent changes have been undoubtedly necessary to align the very different Power Apps and Dynamics 365 licensing models into a coherent and future proof platform licensing model, unfortunately the continuous adjustments on what these services actually cost to run has clearly eroded the customers’ trust on being able to predict the operating costs of their solutions built on top of Microsoft’s cloud. After shaking things up on the licensing front in 2019, let’s hope that 2020 would see less drama. Who knows, Microsoft might actually study their own data on how the latest licensing and pricing decisions have impacted service consumption and calibrate the model on those areas that could be better balanced to drive greater adoption of the platform and the apps.
Data story evolved
Basing business decision on larger and larger pools of data, gathered from an exponentially growing number of sources, processed closer and closer to real time is the Digital Feedback Loop story that Microsoft has been preaching in basically every Business Applications themed event for the past couple of years. The underlying message is that you must have applications so well integrated with one another that you can establish such a loop in real life – which of course the products in Dynamics 365 and Power Platform portfolios promise to deliver.
Back in 2018 we saw the birth of many “AI for X” products that have since then been rebranded as “[something] Insights”. I called this out as the start of the business AI journey in last year’s summary blog post, since we hadn’t yet seen much of these new intelligent features find their way into actual customer environments. Based on my observations today, it’s still fairly rare to find these premium Dynamics 365 licenses for Sales Insights or Customer Service Insights deployed in real life scenarios (let alone Market Insights that’s still a bit of a mystery product in its preview state). So, it appears that at least these core CRM processes didn’t just magically get transformed by adding some AI frosting on top. A big practical blocker seems to be lurking in the availability of clean enough data in large enough quantities that these packaged AI features could show concrete results to business decision makers in customer organizations.
What 2019 did deliver is a set of new products that are aiming to leverage business data in a way not previously covered by Microsoft’s business apps offering. In the second half of 2019, the headline Dynamics 365 product demonstrated in all MS events was Customer Insights. Built as a Customer Data Platform (CDP), its purpose is to enable marketing users to combine customer and transaction data from numerous different sources, to form a 360 degree profile of that customer and use it in better segmenting offers and providing personalized service. Pouring data into Azure Data Lake & CosmosDB is designed to be effortless from any source, be it Microsoft’s or other vendors’ solutions, with intelligent matching algorithms generating “keys where keys don’t exist”. While it can be used with Dynamics 365 apps, there’s no requirement for the customer to have a specific CRM system in place. It’s also not a black box like some of the earlier Insights products, since the built-in templates like churn prediction can be replaced with custom Azure ML models to take advantage of machine learning models built and trained by your own data scientists.
Another similar data intensive new product launched as preview in 2019 was Dynamics 365 Product Insights. The origins of this application lay in Microsoft’s own telemetry data management systems, where services like Xbox, Skype, Bing and Office have been sending up to 25 million events per second to be processed by the same technology that’s now offered as a Dynamics 365 SaaS product to customers. Yes, you could use Azure Event Hub to push all that product telemetry data into the PI service, but there’s a Signals SDK for Java, Objective-C or Python, too, if and when the whole product architecture of the customer organization isn’t based on MS technology. Insights derived from processing the signal data could be consumed via Power BI or embedded inside Dynamics 365.
These kind of new services that are aimed at exposing business users to data that previously used to exist outside the reach of the Digital Feedback Loop sound a lot more transformative than the earlier “AI for X” products. Sure, there’s also value in bringing predictive opportunity scoring into the traditional sales funnel management in CRM. However, those kind of features will likely become the new norm for the type of smart business apps that users will expect to be interacting with everywhere. The customer specific implementation of solutions based on Customer Insights or Product Insights, on the other hand, have the potential to be a source of true differentiation if organizations can learn unique ways to use their data for proactively serving their customers. It also aligns with the ambitions that Satya Nadella has on how organizations can break traditional data processing barriers with the help of Azure:
We are building Azure as the only cloud with limitless data and analytics capabilities across our customers’ entire data estate, bringing hyperscale capabilities to our relational database services.
Satya Nadella, September 2019 post on LinkedIn
New services like Azure Synapse will naturally be the toolkit for creating highly specific, cutting edge analytics solutions on the MS data platform, but I can imagine the SaaS style Dynamics 365 products to follow pretty close by when it comes to covering repeatable business scenarios for big data – with the same underlying Azure tech, of course. In 2019 we already saw CDS data export to Azure Data Lake becoming available both via Dataflows as well as through a standard feature (preview). The traditional relational world of business application data is intermingling with the less structured analytical data systems at a rapid pace, with Microsoft building these services that blur the lines of what specific type of data is being used in which business scenario. Is 2020 going to be the year when Dynamics 365 professionals must step out of their comfort zone of having everything in one database and start connecting to all these strange new services, to deliver those much sought after actionable insights to their business user audience? We’ll know that in approximately 365 days!
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