Microsoft Dynamics AX – Retail

Posted by spencer on February 15, 2010 under Retail Software | Be the First to Comment

As we mentioned in our last post, Microsoft will be focusing retail software development efforts on the Microsoft Dynamics AX platform with a product that will be in general release 3Q 2010. This product was built using code developed by LS Retail, an Independent Software Vendor (ISV) with the goal of providing a completely integrated retail software solution directly from Microsoft. It is important to note that LS Retail continues as a stand-alone ISV that develops a retail software solution add-on for both Microsoft Dynamics AX and Microsoft Dynamics NAV. This means that from this point forward, development for LS Retail’s Dynamics AX retail software add-on will diverge from the development of the new Microsoft Dynamics AX Retail product.

Basically, Microsoft used LS Retail’s AX retail add-on solution to jump start the development of a “Microsoft” retail software solution. This means that they did not have to start developing a retail system from scratch as the LS Retail product is already based on the Dynamics AX toolset, which is actually a pretty smart move if they want to come to market with a solution quickly. Plus, I am sure that LS Retail was paid a tidy sum to allow Microsoft to use their code for the project, so it is probably a win-win for both sides. The biggest danger to LS Retail would be that Microsoft’s retail product eventually makes their product obsolete, but they must have assessed that in their analysis.

So you can see that while the Microsoft Dynamics AX Retail product is currently in Beta testing with 3 installations, it actually has a much more stable background because of all of the installations that LS Retail has with the software. The main question would be how much modification has been done to the LS Retail code and what additional features were added by Microsoft development? I would imagine that for right now, there are only minor changes to the software and that it is fairly stable as far as beta software goes. However it will be very interesting to see where Microsoft takes the product from here.

Another interesting thing to note is that Microsoft has been positioning the AX product more to the higher end of the market in what we call the Tier 2 and even up to the Tier 1 companies and competing against the likes of Oracle, Lawson, JD Edwards (Oracle), and even SAP on occasion. (See SoftResources Tier Chart at www.softresources.com/software-market-overview) The Microsoft RMS product (which is Microsoft’s current multi-store retail solution with many installations) is focused more on smaller retailers in the tier 4 and tier 3 market. Microsoft claims that Dynamics AX Retail will be able to scale from tier 4  all the way up to tier 1 companies. We will see if they can make the pricing work at both ends of the scale and if they can make it simple enough for the small companies to not be overwhelmed, yet sophisticated enough to handle large retailers complex requirements. Traditionally software vendors have had a hard time making a ”one-size-fits-all” solution.

Here is a quick look at the Microsoft booth at the NRF show 2010 with some of my impressions from the floor of the show. It also includes an interview with the Microsoft ERP Marketing Director Guy Weismantal regarding the strategy for Dynamics AX Retail. Guy describes the plan for general release in summer 2010. When he mentions IP, he means the “Intellectual Property” or code they bought from LS Retail to create the Dynamics AX Retail software.