Dynamics 365 Market Opportunity for MSPs

Managed Service Providers (MSPs) are critical to their clients’ success. Their clients increasingly seek technology partners who can provide reliable IT support and offer comprehensive solutions to drive efficiency, productivity, and growth. If providers cannot offer everything they want, they will quickly turn to the competition.

Adding Microsoft Dynamics 365 as an offering is a major market opportunity MSPs should consider if they want to stay relevant with their clients. Dynamics 365 is Microsoft’s comprehensive suite of business applications, including sales, marketing, finance, and operations apps, designed to empower organizations across sectors. Different packages offer different mixes of customer relationship management (CRM) and enterprise resource planning (ERP) capabilities.

This article explores the unique market opportunity that Dynamics 365 presents for MSPs. We explore how offering this powerful business platform can be a game-changer for MSPs looking to expand their services, deepen client relationships, and keep their MSP “sticky” with clients.

What is the market opportunity presented by Dynamics 365?

The potential market for MSPs to enter with Dynamics 365 services can be so large that figures seem unbelievable. That is why Microsoft regularly commissions Forrester Research to conduct Total Economic Impact assessments of their various Dynamics offerings to verify just what the opportunities are.

Forrester found a $16.8 billion market opportunity for business SaaS offerings just among small and medium business (SMB) clients—for their purposes, companies up to 250 employees in size. That opportunity is split close to down the middle between CRM and ERP plus accounting offerings.

Know your clients

So, while that is the global market, what matters, of course, is your unique client base. As an MSP, you know your clients better than Microsoft or Forrester. You know what solutions you have deployed and what other software they use.

One unique aspect of CRM and ERP services that is advantageous for MSPS is that there is no way to have shadow IT.  If they are doing something in that space, you will know about it, so you can talk about how they can transform it with Dynamics 365. You should be talking about it. You are probably supporting that environment, so you might as well take the next step because if you add a Dynamics 365 practice, you will see a huge benefit.

Why should you care about offering Dynamics 365 now?

In short, there is aggressive competition. We are just some of the ones who see this market potential. MSP and Microsoft competitors alike will see it, too. The large financial organizations offering ERP software, like SAP, Intuit, Sage, and Salesforce, every one of them is taking a direct approach to finding new clients—including poaching those currently with Microsoft partners.

Many dated, on-prem CRM and ERP solutions are out there, and all your competitors will be talking about migrating to the cloud. You should also be doing that in conversation with your established clients. Maybe they are using an on-prem accounting solution, or maybe they are using a competitor’s CRM that does not work well with the Office suite. The bottom line is that you should care about and protect your client base because competitors want to take it, given the sizable market opportunity.

Impact of adding a Dynamics 365 practice

As mentioned, increased stickiness is one of the most important benefits of expanding to offer Dynamics 365. Forrester and Microsoft found that if you add CRM, like with Dynamics 365 Sales and Marketing, MSP client churn drops to less than 6 percent.

There is also increased revenue. Forrester found MSPs can see 42 percent year-on-year growth by adding additional Dynamics 365 solutions. So, for example, many MSPs sell Office 365 but need help figuring out how to monetize their client relationships beyond selling licenses. Many have looked to build a collaboration practice or a Microsoft 365 practice.

The next natural evolution for many MSPs might be to expand into offering CRM integration with Outlook in those existing Office 365 solutions. First, offer just that one slice of Dynamics 365’s capabilities. And then, from there, for example, you could expand to offer Finance and Supply Chain Management, which are also part of the Dynamics 365 suite.

How can partners seize the opportunity today?

The economics of building a Dynamics 365 practice are clear. From Forrester’s research, you can expect to see a 46 percent return on investment, but that is after a 15-month breakeven period. So, while there is a significant opportunity, getting there takes a bit of time.

So, one of the key considerations MSPs will need to make is how to build your Dynamics 365 practice to get past that breakeven point. And if you were to build it on your own, it would be a long-term investment. Not only do you have to hire new resources, but those resources must be trained in your processes, even if they are already technical experts for Dynamics, Office, or other parts of the Microsoft ecosystem you need to work with. You need to train them in the complete breadth of solutions your MSP must build, packaged in the way you need them packaged so they become standardized, repeatable solutions. Training and staff development takes a lot of effort, trial and error, and constant cost analysis as you hire personnel for new projects.

That 15-month ROI timeframe for many MSPs makes building your Dynamics 365 practice daunting. The alternative is to work with a partner who has already done it and who can help you go to market quickly.

Get started offering Dynamics 365 quickly with Stratos Cloud Alliance

You can partner with an indirect cloud service provider (CSP), like us at Stratos Cloud Alliance. We can give you access to packaged Dynamics 365 offerings, so you are ready to go to market practically overnight.

Stratos Cloud is the Microsoft Indirect Provider of the Year with extensive experience in helping organizations navigate the ever-changing Microsoft ecosystem—especially the Dynamics 365 offerings. If you want to build your own practice and hire your own people, working with Stratos Cloud helps you build while you sell. You can learn from Stratos Cloud Alliance and see what it takes to build a Dynamics 365 practice and manage projects. You will work with experts who can show your team the best ways to assess, deploy, and support Dynamics 365 offerings.

Schedule a quick call today to learn how Stratos Cloud Alliance can help you seize the opportunity of selling Dynamics 365.