Earlier today Unit4 announced that it selected Azure as the platform upon which it will build its next generation ERP applications.
Let’s digest the press release in our customary Constellation style:

Utrecht, Netherlands, June 16, 2015 – Unit4, a fast growing leader in enterprise applications for service organizations, today announced a strategic collaboration with Microsoft that will speed to market the creation of self-driving business applications and ERP for people-centric organizations.
MyPOV – The enterprise software ISVs are picking their cloud – last week e.g. JDA picked Google Cloud platform – this week it is Unit4 with Microsoft Azure. A good move for both – but later.

Unit4 will use the smart technology in Azure’s PaaS platform components and Microsoft Office solutions including predictive analytics, machine learning, event stream analysis and complex event processing. Combined with Unit4’s People Platform, the collaboration boosts speed of innovation and will see customers benefiting from a new approach to enterprise computing.
MyPOV – Unit4 is using Microsoft where Microsoft is putting more R&D dollars than likely Unit4 has overall – so a smart move to leverage that. With Machine Learning, Office, PaaS capabilities Microsoft had created an attractive set of functions that should attract more enterprise software vendors than Unit4. But Unit4 gets the prize for first mover.

Unit4 with Microsoft – making self-driving ERP a reality
To deliver on the promise of self-driving ERP, Unit4 and Microsoft will establish a development team to ensure that innovations in Azure and Office are used as quickly as possible within the Unit4 People Platform. Contextual information will be derived by combining business data within Unit4 applications with relevant information from Office 365, Office Delve, email, calendar, Yammer and more. This will enable unprecedented business value. Professional services firms will be able to combine an analysis of historical data with predictive analytics to gain valuable insight on which projects to bid for. Public sector organizations will improve fraud detection on bill payments with advanced pattern recognition and machine learning. Not-for Profits will have the ability to match campaigns to donation patterns and target donors more effectively.

MyPOV – Unit4 presented their next generation application platform last week at its North American analyst summit (my take here). It’s a modern and attractive architecture that is good to have Microsoft as a technology partner for. But know how transfer is always challenging, and with all software the devil is in the details so it is good to see both vendor forming a team. The Office 365 and Office Delve integration can be a substantial sales channel for Unit4, assuming done right.

“Microsoft and Unit4 share a long history of increasing productivity for enterprises and this collaboration will accelerate the innovation necessary to make self-driving ERP a reality,” says Jose Duarte, Unit4 CEO. “Like a self-driving car, self-driving ERP takes care of the tasks that are better served by technology, leaving people to focus on the exceptions that need human intervention. Unit4 and Microsoft’s combined know-how and technology will set a new industry standard for business applications for people-centric industries.”
MyPOV – Good quote by CEO Duarte, clarifying more the vision of self-driving ERP.

To achieve this vision, ERP systems require access to complete and high-quality data. Traditional ERP provides users with non-intuitive empty forms, asking them to enter all the required data, leading to non-intuitive data entry, errors and frustration. Self-driving ERP dramatically simplifies data collection by utilizing key technologies such as predictive analytics to provide meaningful in-context information to users. Such information enables intuitive data entry based on pre-populated forms and in-context yes-no validation questions. It results in great user experience all the way from desktop to mobile to wearables.
MyPOV – Unit4 shares a little of its magic around self-driving ERP – which has a heavy context component. We know context is very powerful, but ERP solutions have relied on the human users for the longest time to provide the context. If Unit4 can capture and insert the context into ERP applications, it will be very powerful, eye opening ERP capabilities.

Working together in the cloud
Azure will be Unit4’s preferred public cloud deployment platform globally. Microsoft’s approach to Azure IaaS cloud deployments and Unit4’s Cloud Your Way methodology, which gives customers the flexibility to run their applications in public and private clouds, are key components and the foundation of this collaboration. Both organizations also cater to a hybrid computing environment which will be the reality in the enterprise world for some time to come. Azure enhances Unit4’s offering through flexible security, data privacy and residency. With a deep understanding of the challenges facing the modern enterprise, Unit4 Business Applications with Azure offer highly scalable ramp-up and ramp-down capabilities and provide customers with the flexibility and adaptability they need to run their business without disruption.

MyPOV – More detail on what both vendors plan to deliver. Good to see acknowledgement of the hybrid reality, which is key for ERP sales these days. Data privacy and residency is another key component, so good to see that both are looking at this.

“Unit4’s business applications and People Platform made them a strategic company for us to work with to help realize self-driving ERP,” stated Nicole Herskowitz, Senior Director of Product Management, Microsoft Azure. “We are excited to be working with Unit4 and through this collaboration, we are not only delivering accelerated value but also enabling faster time to innovation in the cloud for our customers.”
MyPOV – Good for Unit4 to get a product development executive for the quote, which always bides for more commitment than e.g. a business development executive. Both vendors will need to work closely together to pull this off, and it is good to see that the senior partner, Microsoft has skin in the game. […]

Overall MyPOV

It’s time for the smaller enterprise software vendors to pick their clouds… Last week it was JDA (with Google), NetSuite picked also Microsoft (though to a lesser extent than Unit4). Even SAP is up to a partnership with IBM last fall. It all started with Infor choosing AWS a year ago.

Unit4 has done a very good job to articulate how key Microsoft capabilities in Azure, Machine Learning, Office and PaaS will be leveraged. They are crucial to make Unit4’s vision of ‘self driving’ ERP a reality. As such Unit4 probably takes the largest dependency of all ERP vendors, but also is up for the biggest upside. The good news is that Microsoft needs to make all these capabilities work in order to attract Azure business. So a pretty safe bet for the much smaller Unit4 to make.

On the concern side, Unit4 needs to make a very compelling, but also not trivial ERP vision happen with ‘self-driving’ ERP. No other vendor has shipped dynamic context functionality with a breadth of an ERP system. No small undertaking and Unit4 needs to make it work. But it is better to have to execute on a compelling vision than not having e.g. a vision at all. We expect Microsoft to support Unit4 at its best, as it needs to create an enterprise ISV showcase in the overall IaaS and PaaS market.

Overall it is good to see smaller vendors going after a better R&D return by leaning on technology offerings of larger, technology partners. To some point that has always happened in the past, e.g. for RDBMS. In the 21st century the dependency gets bigger, but with that the applications become also more powerful. Congrats to both vendors to this partnership, we are curious to see what will be developed.