Last week our CEO Satya Nadella announced a reorganization of our engineering groups that combined our client hardware and Windows teams, and moved Dynamics, our business process application group, into the cloud and enterprise division (C&E). The hardware and software move made clear sense in light of similar structures at Apple and Google. The Dynamics move to C&E may not be as clear and in fact I’ve received several questions from you, our clients about this. Moving Dynamics into Cloud + Enterprise not only represents Dynamics coming of age with solid growth and strong wave of innovate solutions, but there is also a clear logic here that aligns well with the strategies of each division as well as broader trends in enterprise applications.

Forrester Research’s Jeffrey Hammond has written that application development models have been shifting to one of composition rather than three-tier or monolithic code. Modern applications compose together collections of cloud-based services via RESTful APIs. In the business process space, Gartner has documented a similar trend it calls Pace Layering, “a methodology for categorizing, selecting, managing and governing applications to support business change, differentiation and innovation.”.

Both trends are motivated by businesses’ need for greater agility and responsiveness to changing customer behaviors and desires. These new design models make it easier and faster for businesses to change application and business processes at the pace of their customers.

In both models stringing together cloud-based services means less maintenance, faster feature advancements, more agile security and instant scale with pay-per-use pricing. For the enterprise, there’s less code to manage and maintain and you get new features and capabilities with little to no effort. And since thousands of other companies are using the same services, you inherit new capabilities and best practices from the SaaS and cloud platform provider.

Increasingly the line between modern app and core business process are blurring. In Internet of Things implementations, for example, modern app models are used to string together streaming datacoming from devices and sensors, BI and analytics tools and often data from ERP and CRM systems.  In the Microsoft world this means integrating Dynamics ERP and Dynamics CRM with the Azure IoT suite (which pre-integrates Azure Event Hubs, Azure DocumentDB, Azure Stream Analytics, Azure Notification Hubs, Azure Machine Learning, Azure HDInsight, and Microsoft Power BI).

The same is true when building out a modern web and mobile experience. Using Azure App Service, you can easily string together web and mobile back-ends, integrate Dynamics modules and data sets and craft the remaining business processes with Logic Apps. So in fact, Dynamics AX 2012 was already part of the Azure app portfolio. Last week’s reorg simply made this fact official.

A key goal of the Microsoft Cloud is to provide business agility through a complete platform for modern apps and Pace Layering that includes the foundational hyper scale infrastructure, modern app platform, process integration framework, development tools and rich collection of RESTful, composable services necessary to gain high productivity in this new development model.

Thus the key question now is: What are you doing to leverage this newly combined portfolio to bring greater agility to your organization?