Microsoft releases public preview of Project Madeira, a SMB business management service running on Azure in US, along with Windows, iOS, and Android apps
Mary Jo Foley / ZDNet :
Context & Ripple Effects
Project Madeira is Microsoft taking its business-management software — the kind small companies previously bought as boxed, on-premises ERP — and running it purely as an Azure service, delivered through Windows, iOS, and Android apps rather than a desktop install. It lands in the middle of a deliberate spring 2016 push at Microsoft to rebuild its business-applications stack around the cloud: two weeks later the company ships the public preview of PowerApps, its service for assembling mobile business apps without code.
The payoff comes six months later, when Microsoft folds this work into Dynamics 365, the combined Azure-hosted CRM-and-ERP offering that starts rolling out November 1 — Madeira is effectively the SMB financials seed of that bundle.
First-order effects
- US small businesses get a way to run core financial and operational management entirely from Azure, with native Windows, iOS, and Android clients replacing server deployments and VPN access.
- Microsoft gains a live test bed for pricing and packaging SMB ERP as a subscription before the Dynamics 365 launch locks those decisions in.
Second-order effects
- PowerApps becomes the natural extension layer for Madeira data, letting SMB customers build their own mobile workflows on top of the same Azure-hosted records instead of buying separate line-of-business tools.
- Incumbent SMB accounting and ERP vendors now compete against a rival whose distribution advantage is that the product runs on infrastructure they don't own, pressuring them toward hosted versions of their own suites.
Third-order effects
- If the pattern holds, business software stops being sold as licenses attached to servers a customer manages and becomes per-seat subscriptions consumed off the vendor's own cloud — with Microsoft's ERP franchise converted into an Azure workload and the November Dynamics 365 rollout as the template.
- The CRM-plus-ERP combination in Dynamics 365 points toward consolidation of back-office and front-office applications into single-vendor bundles, raising switching costs for SMBs who adopt the integrated stack.
The trend: Business applications are migrating from customer-managed servers to hyperscaler-hosted subscriptions, with Microsoft using SMB offerings like Project Madeira to seed its broader Dynamics 365 cloud bundle.