Big changes are coming to Microsoft Corp.’s cloud lineup. In a blog post published this morning, the company revealed plans to combine its sales automation and resources planning services into an integrated suite dubbed Dynamics 365. The move is an attempt to replicate the success that Office 365 has achieved over in the document editing market.

As part of the effort, Microsoft is reassembling the capabilities of its current offerings into specialized apps that will each focus on a different task much like to Word, Excel and PowerPoint. Dynamics 365 is set to support eight business activates in total ranging from back office automation and finance to customer management, with the latter starring as the main focus area. Organizations will be able to launch advertising campaigns via the platform, engage leads, provide support and even dispatch field technicians if necessary. Redmond plans on giving each customer the ability to pick and choose applications from the suite according to their specific requirements.

For instance, a software startup could hold off on buying the marketing module until it’s big enough to afford large-scale ad campaigns, while an enterprise that already has an accounting system might opt out of the financial service. But despite the fact that the Dynamics 365 apps will be available individually, they’re tightly integrated under the hood. Microsoft says that the tools use a common data management system that is also shared with Office 365 to ease customization. Large organizations with specialized needs can tweak the functionality of every module and even build new ones on top if necessary.

Meanwhile, smaller companies that don’t have the resources to perform extensive customization will be able to purchase pre-packaged extensions from an upcoming marketplace called AppSource. Redmond says that the store is set include more than 200 third party services on launch including vertical-specific tools for retailers, the financial industry and other key sectors. Given the massive size of partner Microsoft’s ecosystem, the selection of external services available for Dynamics 365 can be expected to increase considerably once it’s generally available. The rollout is scheduled for this the fall, which is presumably also when the company plans to announce pricing.

In the big picture, Dynamics 365 and AppSource should put Microsoft in a much better position to compete against rivals like Salesforce.com Inc. that have also taken an integrated approach with their products. Marc Benioff’s firm offers several service suits that can be mixed and matched as needed and allows partners to augment its core capabilities with custom tools. Now that the playing field is leveling out, the cloud productivity market is poised to enter an entirely new era of competition.

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