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NEW DYNAMICS MARGINS PINCH AX VARS

dynamics ax logoWith Microsoft moving Dynamics AX into its volume licensing program, the company has also trimmed margins for its resellers. The new rates went into effect on September 1 and are valid through June 30, the end of Microsoft’s fiscal year. The playbook emerging is not a big surprise – resellers need to move from simply reselling Microsoft software to adding their own IP and specialization and that message has been around for a few years.
Mid-year, the company said it would add Dynamics AX to its enterprise agreement plan and would be more aggressive in selling into the AX market. One VAR said the company is reported to be hiring from 25 to 40 people for direct sales of AX. With AX doing well, firms that look more like “a specialized SI” would fare well. “We’re not so threatened because we think we are well positioned, but other AX resellers are going to be in a more precarious position,” he said. One prominent dealer noted “Anytime margins are cut it is a big deal … our business is moving away from a “Dynamics” revenue model to a classic Microsoft world where software margins are not business building!” A chart outlining policies and prices for the current show that fees, as Microsoft terms them, are 25 percent for new sales and 5 percent for renewals under volume purchasing. .Dynamics CRM Online has pricing for the original platform, for which Microsoft stopped taking new customers July 19, and for the new Online Service Portal. Until December 31, the three applicable fees are sell, 12 percent; promotion, 12 percent; and manage 6 percent. For the second half of Microsoft’s fiscal year, those change to sell, 12 percent; promotion, 14 percent; and manage, 4 percent.
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