How to find and manage a Microsoft Dynamics hosting partner
Hiring a hosting firm for ERP can save time and money–but shop around for the right provider.
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If you're considering hiring a hosting firm, find a good match for your business needs.
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Service Level Agreements spell out the host's obligations and its guarantees.
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Most hosting companies can provide customization to meet specific customer needs.
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For a midsize business, one of the biggest IT leaps is an investment in core business management applications, such as enterprise resource planning (ERP) software and customer relationship management (CRM). To do so requires a serious commitment of resources, both financial and technical.
Microsoft offers a broad suite of business management products in its Microsoft Dynamics group—including Microsoft Dynamics CRM, and its ERP products such as Microsoft Dynamics NAV, Microsoft Dynamic AX, Microsoft Dynamics SL, and Microsoft Dynamics GP. These software tools offer much, but ask much as well.
 | We can adapt the interface to a business's particular need and can expand or customize the different features to suit a client. |  | | David Greer
President, Nextcorp
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"Implementing these programs can be costly," says Elliot Curtis, Microsoft's director of U.S. software and services channel. "And there tends to be scope creep when deploying them." In other words, the project becomes larger, more costly, and more complex than originally planned.
An increasingly popular way to enjoy the benefits of powerful ERP software without all the expense and complexity is to hire a third-party hosting company that can set up and deploy it offsite. A business then uses a Web browser to gain full access to its customer records, accounting tools, and more. Yet what should you look for in a hosting partner?
One firm's path to hosting success
Advantage Technologies Inc., a Michigan-based management-consulting firm that works in the medical market, adopted Microsoft Dynamics CRM 3.0., after carefully selecting Microsoft partner TriVenture to hosts its new application. "We wanted someone who was reputable and had been hosting applications for a while," says Bryan Currier, a systems analyst with Advantage Technologies.
Other considerations included:
| • | Whether the hosting company could manage the migration of data from an existing on-premise deployment to the hosted environment. |
| • | Whether the host could build in support for Advantage Technologies' mobile-communications devices. |
| • | Whether the host could provide excellent support, security, and reliability. |
"We wanted to find somebody who had clustered servers versus just a single server," says Currier. "And we wanted them to have at least two completely independent Internet (systems), which they did, and we wanted a 24/7 support system, which they offered as well."
Within the final service-level agreement, contract language included financial compensation if the system were to go down, along with a clear path for reporting any problems.
By moving to a hosted deployment, Currier says his firm saw its CRM operating costs cut by 60 percent compared with a CRM system the company previously hosted on-premise. Companies who use hosting partners also find their IT staffs are able to focus on core business needs, rather than servicing ERP servers.
Tips for hiring Microsoft Dynamics hosts
Different Microsoft Dynamics solutions, however, may require different needs. Microsoft Gold Certified partner RoseASP, based in San Diego, specializes in hosting Microsoft Dynamics GP (formerly Great Plains). "There are quite a few tricks to hosting Dynamics GP,"explains J.J. Hansen, RoseASP's chief technology officer. "The maintenance routine for GP servers is different from other Dynamics applications, so it pays to use a hosting company that has a homogenous environment." Here are some top issues to consider in your evaluation of hosts:
1. Reliability and functionality are two key areas you’ll want to closely investigate before hiring a host. RoseASP offers its clients service-level agreements that guarantee “five nines” (99.999%) availability, as well as three levels of hosting depending on whether a customer needs dedicated servers, or can make do with sharing servers with other companies.
Although industry experts often remark that customization is limited in hosting environments, Microsoft partners who host Microsoft Dynamics applications say otherwise. "We can adapt the interface to a business's particular need and can expand or customize the different features to suit a client," says David Greer, president of Microsoft Gold Certified partner Nextcorp, a hosting company based in Irving, Texas.
Hosting companies also can combine a Microsoft Dynamics application with other applications. For example, Italian firm Global Display Solutions (GDS), a manufacturer of commercial display systems, wanted to integrate Microsoft Exchange Server with a Microsoft Dynamics CRM 3.0 offering hosted by Microsoft Gold Certified partner CRM OnTarget. CRM OnTarget was able to host both applications on its site, thereby enabling GDS to have full communications and calendar functions accessible within its CRM application, without needing a virtual private network.
2. Look into certifications and reputation. Investigate whether the partner has Microsoft Business Solutions (MBS) certification, an indication that they have received the proper training for deploying Microsoft Dynamics solutions. Many Microsoft partners also are certified to SAS 70 standards, a widely recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA). It means a host has demonstrated adequate controls and safeguards when they host or process data belonging to their customers. In addition, the requirements of the Sarbanes-Oxley Act of 2002 make SAS 70 audit reports even more important. An effective hosting partner also will have expertise in a company's line of business, and of course, solid customer references for similar Microsoft Dynamics deployments.
Deployment options
A business that wishes to deploy a Microsoft Dynamics application is not limited solely to exclusively managing the application on-premise or renting it as "software as a service" from a hosting company.
Another choice involves purchasing a Microsoft Dynamics license, deploying it on-premise, and then hiring a hosting company to manage the application remotely; or you can purchase a license and then have a hosting company deploy and manage it offsite. As well, partners may allow you to manage some modules on-premise and outsource other modules.
Advances in Microsoft Dynamics technology mean that hosting a solution is becoming easier and less expensive. For example, Microsoft is now deploying Microsoft Dynamics CRM 4.0., which adds the feature of "multi-tenancy." That means multiple customer accounts can be managed on a single server, versus one account per server with the previous edition.
The big benefit from multi-tenancy is that a hosting company can reduce its server costs, allowing it to pass savings on to customers. Microsoft Dynamics CRM 4.0 is available for the first time as a CRM Live version hosted by Microsoft. It also is available as a hosted service, as it was in the 3.0 version, from about 60 Microsoft Partners worldwide.
No matter which application you choose to host, keep in mind that the deployment options for customers are only going to grow—and services will likely improve from partners. Most experts advise that you draft a thorough contract protecting your business from any negligence on the part of the provider, and, make an ongoing commitment to develop and manage the relationship with your hosting vendor.
 | Douglas Gantenbein writes often on technology for Microsoft. A journalist for more than 20 years, his work has appeared in Business 2.0, Scientific American, Popular Science, and other magazines. |
