Microsoft is planning every future major enterprise resource planning product release to be Software as a Service, beginning with Dynamics NAV in 2012, using the upcoming cloud-based operating system Windows Azure as well as Office 365.

The plan was unveiled at a press and analyst briefing at the Microsoft Convergence conference in Atlanta on Tuesday. “We are being very careful in how we do this,” said Microsoft Business Solutions Kirill Tatarinov. “We have found that in taking our CRM product to the cloud, there are still 50 percent of those who use it in the cloud, and 50 percent that do not. This is where people are. ERP is somewhat different. It is mission-critical workload, and it will one day be available in a way that does not disrupt them. But right now most [customers] do not want it for mission-critical work.”

Tatarinov expects many companies will want to keep their core financial data in on-premise systems for some time, due to lack of trust of the cloud.

While Microsoft did not reveal specific pricing plans for its future cloud ERP products, Tatarinov addressed some concerns over partner compensation in selling cloud ERP products.

“Having [Dynamics] CRM in the cloud, we learned a lot,” he said. “We learned what people expect from the cloud and that the economics of the cloud are different. Last week we published a partner profitability guide to help them embrace the cloud. With the partner network, we are committed to giving them tools and the ability to study and become more competitive.”

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