Overall, there's still going to be "a vibrant market for hosting in a more traditional way," Ehrenberg added. For example, a customer may be in a region where laws require a single-tenant architecture, with dedicated servers for each customer, or they may desire a greater level of customization than possible with Azure, he said.
One veteran Dynamics hosting partner expressed little concern over Azure's potential impact on his business.
"I believe there is a fit for what they're going to be providing," said Tom Doerner, president of WatServ in Waterloo, Ontario. "We've been doing this for five years, we've learned what the market is looking for."
"The low end of the market, which is where I believe they will start, typically is the [customer] who is looking for something more than QuickBooks," Doerner added. These customers are looking for systems with under 20 users, few integrations and very simple environments overall, he said.
"We play a lot in the larger market," Doerner said. WatServ counts large, multibillion dollar companies among its clients, with Dynamics implementations running as high as 1,000 users, he said. "They wouldn't even dream of running on Azure. They're connecting from China, in some places they speak German, French and Italian. Who's going to support that at Microsoft in those languages, 24-7?"
Many of WatServ's customers also run a series of third-party applications in conjunction with Dynamics, he said. "How is Microsoft going to support all these other products?"
He cited the example of a software package for trucking companies that runs only on IBM's DB/2 database. "How many DB/2 experts do you think Microsoft has?"
Overall, "I don't see any threats to our main bread and butter, to our large enterprise customers," he said. However, "Microsoft's strength is they get in, they learn, they adapt. They'll do a fine job at the small end of the market, and over time they will go up-market."
"We'd be naive to think Microsoft won't play a factor in our future," said John Robb, director of strategic alliances at WatServ. "They are definitely the 800-pound gorilla in the marketplace. We just have to make sure we're aligned with their goals."
The upcoming launch of NAV on Azure has more immediate relevance to Jon Cooper, director of technology for AVF Consulting of Baltimore, Maryland.
"Really, all that we do is NAV, delivering the best that NAV can be to our customer base," he said. AVF has been using various Microsoft technologies to run a NAV hosting business for some time now, Cooper said.
But Cooper is ready and eager for the arrival of NAV on Azure.
"Even though we've already invested a lot in our own hosting infrastructure we feel that's a real plus for us," he said. "We went through the extra onus to get all that off our customers' hands, but that's not what we really want to be doing either." AVF wants to focus on being a value-added reseller and consulting practice, more than a hosting provider, he said.
"If Microsoft is saying, here's an official hosting solution for NAV that we're supporting, then we're totally on board with that," Cooper said.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's email address is Chris_Kanaracus@idg.com