Markets are shifting faster than traditional operating models can adapt. Customer expectations are rising. Capital constraints require every decision to deliver measurable value. In this environment, organizations that thrive are those treating business model innovation as a core capability–not an occasional strategy exercise. They are rethinking how value is created, how operations scale, and how technology supports the enterprise.
ERP is evolving to meet this moment. As Satish Thomas described in his recent blog, we’re entering the era of agentic business applications: systems moving beyond recording transactions to actively orchestrating processes, anticipating needs, and adapting to change. For leaders, this evolution means ERP is becoming a system of action. It aligns people, data, and workflows around the outcomes the business is driving toward.
Why rental business models are accelerating
In asset- and across product-driven industries, the ability to generate value from equipment, tools, and machinery has always been central to business performance. Increasingly, customers want access to what they need, when they need it, without long-term ownership. This asset-as-a-service shift is expanding across industries–from heavy equipment, consumer goods, and automotive to medical devices, technology assets, and renewable energy.
Global forecasts underscore this momentum. Industry forecasts from the American Rental Association and independent market analysts indicate the North American equipment and tool rental market will exceed $80 billion. Global rental and leasing revenues are already well above $500 billion annually. Similar trends are emerging in adjacent verticals, all signaling that the opportunity extends far beyond traditional equipment categories.
Today, rental processes often run across fragmented systems for quoting, dispatching, billing, and financials. The result: avoidable idle time, slow handoffs, margin erosion, and most critically, subpar customer experiences.
This is where Dynamics 365 ERP can help you with transforming your rental operations business processes.
A strong connected foundation
Operational excellence in rental management demands more than isolated workflows. It requires seamless integration and orchestration across the entire lifecycle. From rental rate management, quoting, and asset reservation to contract management, inspections, maintenance, and billing, every step must work in harmony to keep revenue moving and customers delighted.
Building these capabilities into Dynamics 365 connects the full lifecycle of work within a single agentic ERP.
Today, we are announcing that we are making investments to accelerate adding new capabilities for rental operations. These capabilities are now in development, planned for release in Q4 of 2026, including new ERP capabilities designed for:
- Quoting and reservations to confirm availability and seamlessly convert opportunities into contracts.
- Contract and pricing management for short- and long-term rentals, rent-to-own programs, or seasonal pricing with flexible terms and rate structures.
- Inspections orchestration to coordinate inspections upon deliveries, transfers, and returns.
- Billing and invoicing tied directly to rental activity to improve accuracy and reduce reconciliation effort.
Rental operations succeed when every handoff–from quoting to return–is coordinated and timely. The forthcoming capabilities bring structure and clarity to these moments. They are designed to help organizations accelerate deal cycles, improve asset utilization, enhance customer satisfaction, and reduce reliance on custom or manual processes.
By unifying these processes inside Dynamics 365, leveraging the composability of Dynamics 365 Finance & Supply Chain Management, Project Operations, and Field Service, organizations will be able to run rental as a natural extension of their operations rather than as a separate system or afterthought.
Driving utilization, uptime, and margin
The levers that shape rental performance–utilization, uptime, margin, and cash flow–are all influenced by how well operational data connect across the lifecycle. When organizations have a single view of reservation status, asset availability, and maintenance needs, they can plan more effectively and limit avoidable idle time. Consistent pricing and billing structures then help ensure every transaction reflects the same rules and logic, reducing confusion and rework. When maintenance activities are linked to actual rental usage, teams can schedule work proactively, support asset longevity, and reduce the risk of unplanned downtime.
With these elements working together, rental operations can run with greater predictability – improving financial clarity while delivering more reliable, trusted customer experiences.
Turning operational telemetry into financial clarity
Operational data is only as valuable as the financial clarity it enables. Information such as rental item status, reservations, and maintenance history can become a strategic asset when used to drive accurate forecasting, informed capital allocation, depreciation planning, and profitability analysis. By connecting operational metrics with financial outcomes, organizations can optimize resource utilization, reduce risk, and uncover opportunities for growth.
Enabling a strong ecosystem
The rental management capabilities that we are developing in Dynamics 365 will form a robust foundation for rental businesses. Rental operations vary significantly within and across industry verticals. To address this, we continue to build on our proven model of success. We are empowering the extensive ecosystem of Microsoft Dynamics 365 partners and ISVs to deliver specialized, deeply vertical solutions that meet unique business needs.
Because these foundational capabilities will run natively in Microsoft Dynamics 365 on the Microsoft Cloud, customers, ISVs, and partners can extend them with AI agents using MCP and Microsoft Copilot Studio to support vertical-specific requirements from front-office process optimization and automation to compliance, pricing strategies, and equipment lifecycle planning. The flexibility of the Microsoft Cloud, combined with advanced AI, is designed to help organizations accelerate innovation, optimize operations, and deliver differentiated customer experiences that drive growth and profitability. Microsoft remains committed to enabling innovation across the ecosystem.
Microsoft Ignite 2025: Powering Frontier Firms with agentic business applications
Looking forward: the future of rental, built into agentic ERP
Flexible, service-based operations are transforming how organizations create value from their assets. Our investment in rental management capabilities is designed to help customers meet this moment. It will simplify processes, improve visibility, and deliver measurable business outcomes.
If your organization operates or supports rental models today, now is an ideal time to explore what’s possible with Dynamics 365. If you’re attending Convergence 2025, you’ll see firsthand how these investments align with our broader vision for adaptive, agentic ERP systems–solutions that work alongside your teams to drive operational excellence and unlock new opportunities for growth.
