Dynamics SL SAAS

A Case Study on How the Cloud is Sometimes the Solution

The Situation: A client was using an old, unsupported version of Dynamics SL with a maintenance plan that expired in 2006.  And to exacerbate the problem, everything about their IT environment was no longer supported by the various hardware and software vendors.  Obviously, this put their ability to process key accounting functions at risk, including payroll processing.  However, for various reasons, they did not want to invest in the purchase of a “current” IT infrastructure, a Dynamics SL upgrade, and a new software maintenance plan that included penalties.

What really scared us was when they called and said that a virus had spread through their system and SL was not working.  We told them to have their IT team eradicate the virus first.  If that did not work, then we would have to rebuild the system.  The problem was that it is almost impossible to rebuild an old system.  It is far more expensive to recreate an obsolete, unsupported system than to upgrade one.   Fortunately, eradicating the virus was the solution.

In summary, they could not stay in their current situation, but they could not afford to do anything about it.  So we had to rethink the situation. 

 

The Solution:  Recently, Microsoft introduced a new SaaS (Software as a Service) license agreement that truly creates a paradigm shift.  It makes things possible that were not possible before in the Microsoft Dynamics SL world.  We could upgrade them to Microsoft Dynamics SL 2011 in a “state of the art” IT infrastructure with the security that they needed – at a very reasonable cost.  The upfront cost was very little, the monthly cost was very little, and there was no long term commitment.  It created a solution where previously there was none.

Basically, SaaS is renting the use of software on servers hosted in an offsite datacenter that the end user never sees.  In our case, the servers – and data – were in their own domain, so it is a private cloud.  The “rental” is on a monthly basis with reduced upfront cost.  (As a side note:  it is possible to own the license to Dynamics SL but have a data center “host” it for you on their IT infrastructure.)

Every situation is different, but generally the smaller the user count the higher the return for the end user (note:  a minimum of three users is required in a SaaS environment).  In this case, the initial upfront costs were lower by $16,340 but the monthly costs were higher by $60.  And for end users that use the Project Series and the Service Series, the savings is even greater.  And note that in this case, the end user already owned the license to Dynamics SL.  The cost of the license was not included in the analysis below.

Cost to own software that resides onsite:

Initial costs to update (note: this process needs to be repeated every three years on average)

		Unit Cost	Quantity	Ext. Cost
	Upgrade Dynamics SL	7,200	1	7,200
	Reinstatement of Microsoft Enhancement Plan	6,840	1	6,840
	New server and operating system software	6,000	1	6,000
	New desktop computers with Windows 7 and Office 2010	1,000	3	3,000
	New switches and other items to accommodate required faster speeds	2,000	1	2,000
	Labor to setup server and workstations	2,000	1	2,000
	Total Initial Costs			$27,040
Monthly Fees:
	Dynamics SL Enhancement Fee	190	1	190
	Incremental IT consulting fees to support server	500	1	500
	Total Monthly Costs			$690

 

Cost to use SaaS:

Initial costs to update (note: updating of the IT infrastructure at the host is no charge, but other costs are incurred every three years on average)

		Unit Cost	Quantity	Ext. Cost
	Upgrade Dynamics SL	7,200	1	7,200
	New switches and other items to accommodate required faster speeds	2,000	1	2,000
	One time setup fee of IT infrastructure at host	1,500	1	1,500
	Total Initial Costs			$10,700
Monthly Fees:
	Hosting charge, Dynamics SL User License, SQL Server License, and Office 2010 License	250	3	$750

A final note: A big advantage to hosting for smaller companies is security. When you look at a computer, especially a server, you might think that the total replacement cost is the cost of the hardware and the software. If it is old, then the value is low. But the biggest replacement cost is the cost of the data. If the data is gone, it is extremely difficult to replace. And extremely expensive. So it is extremely important to guard that data and any customizations to the system, such as custom reports. Did I emphasis the word “extremely” enough? So how is that data protected?

Many of our clients rely on contract IT support to maintain their IT infrastructure. Is it part of their contract to makes sure that security updates are applied and security software is running properly? That they are running “supported” versions of the software? I have never seen either answer to be “yes.”

Furthermore, it is the responsibility of the Office Manager or perhaps the Controller to switch out backup tapes on a daily basis. But do they remember that duty along with all their other responsibilities? What if they are on vacation or sick? Are the backup tapes good? Are they even backing up the critical directories? Do the tapes ever make it offsite? Too often, nobody knows. It is not their main job, it is not important until it is too late. But this is critical. Stuff happens. Maybe Washington, D.C does not have to worry about earthquakes, New York does not have to worry about hurricanes, and Houston does not have to worry about wild fires; however, there are areas of this country that have these concerns. And since Oklahoma City and then 911, everybody has to worry about man made threats. Disgruntled current and former employees probably pose the greatest threat to onsite IT resources.

And an “unsupported” environment makes a consultant’s life miserable. A client might try to force an upgrade with hardware and software that cannot support the upgraded version of Dynamics SL, but it will result in failure and expense. Because Microsoft Dynamics SL 2011 relies on some advanced technologies, operating systems such as Windows XP and Server 2003 will not work with it. So the consultant is faced with telling the client to spend more money when money is tight. Nothing happens, the data remains at risk.