A-Introduction

The D365 Headless Commerce engine (RCSU/CSU) contains more than 400 APIs packed with Business logic for B2C and B2B Commerce The APIs provide a lot of out of box B2C and B2B Commerce functions such as uploading orders from POS or E-commerce platforms to D365 F&O, redeeming gift cards, inventory lookup or customer credit check. This is interesting for Retail companies, Wholesalers and Manufacturers who sell their products through B2C or B2B commerce models. On top of this, the headless Commerce engine can be integrated into any E-comerce customer journeys to enable Omni pricing and used for any other Omni-channel scenario such as omni-channel returns, omni-channel refunds, and omni-channel pickup scenarios such as click and collect or drop shipment.

B-Microsoft Telemetry

Microsoft telemetry shows that more than 85% of the API traffic hitting the D365 headless engine relates to D365 POS (Store Commerce App). This means that hardly any customers are using the D365 headless Commerce engine and APIs today. For example to use the APIs in their online customer journey or to upload orders into D365 F&O.

C-Root cause

Multiple customers and partners claim that the under-use of the D365 Headless Commerce engine is caused by 3 reasons:

1. No promotion/marketing of headless use from Microsoft side
2. Lack of technical documentation on the use of the APIs
3. Using the D365 headless commerce engine requires E-commerce licensing which is assumed to be more costly than custom integration options - This is why leading partners in the market actively promote the use of custom integrations (like DIXF) which are often costly and risky also looking at OneVersion updates (1). On top of this custom integration options branch customers off from omni capabilities and future MSFT investment in Commerce (2).

To mitigate point 3, Microsoft give customers a lot of discount on the use of the E-commerce CSU, but since this pricing is not official, and may be subject to change after the discount period ends, customers and partners are hesitant to choose the RCSU/CSU route.

D-Current licensing models

On point 3: customers currently require a separate RCSU/CSU for in-store use and use in E-commerce respectively. The E-commerce licensing is organized by tiers and bands based on average order amount and number of orders. In my opinion model has 2 downsides:

1. The model does not fit the nature of modern Commerce which has an omni-channel focus and not a channel-specific focus
2. The model does not distinct customers who (1) use the Microsoft sales clients (Microsoft E-commerce frontend and/or D365 POS) and customers who are using non-Microsoft sales clients (2). Category #2 can potentially be a lot cheaper, because API traffic between their sales channels and RCSU/CSU will be significantly lower (1) and these customers do not need updates to Microsoft sales clients (2).

E-My Idea (please vote!)

My idea is for Microsoft to add a Headless commerce license with the following characteristics:

1. Enables using an RCSU or E-Commerce CSU for 3rd party sales channel integration and headless commerce use in general, such as:
2. Integrating orders from any OMS including Microsoft IOM
3. Integrating orders from marketplaces and social media channels
4. Using D365 headless commerce engine in any online customer journey
5. Integrating 3rd party POS systems
6. Cheaper than order line based integration through DIXF so partners and customers are incentified to promote using the RCSU/CSU route

F-Win-Win

I think this idea is a win-win for all parties involved:

1. Customers
2. Benefit from out-of-box and proven APIs
3. Benefit from high performance and continuity (the RCSU/CSU uptime is very good)
4. Benefit from omni capabilities to empower their frontend customer journeys and seamless data integration into D365 F&O backend
5. Do not require customisation/extensions in the D365 F&O backend
6. Partners
7. Can better position D365 Commerce headless engine for use in hybrid IT landscapes which will help in sales cases
8. Can keep D365 F&O backend more standard including the HQ commerce setup - This leads to reduced project risk and faster implementation
9. Can better explain the licensing model to Retailers, Wholesalers and Manufacturers who have B2C and B2B commerce models and may not necessarily be interested in the native D365 sales channels (D365 POS or E-commerce)
10. Have more options to serve the customers in their Transformation goals - For example by bringing AI innovation into non-MSFT sales frontends - This will help cross-selling F&O backend and other Microsoft services like Power Platform and Azure services
11. Microsoft
12. Will see more use of the D365 RCSU/CSU which is better suited for high API/order volume than D365 F&O backend - So this can potentially optimize margin for Microsoft
13. Can actively promote the use of D365 Commerce headless engine in non-MSFT ecosystems - This will increase product range and potential in the market which is now completely ignored
14. Can bring AI innovation into non-MSFT sales frontends which helps cross-selling other Microsoft products like Power Platform (with AI builder) and Azure services
15. Will improve the "Better together" story, for example for IOM and D365 Commerce in 1 landscape