The Future of Dynamics NAV & 365 Business Central Pricing & Licencing

Microsoft has announced the future licencing policies they will be implementing for the Dynamics NAV and Dynamics 365 Business Central platforms.

The most significant announcement is the end of Concurrent User licences with everything moving to a Named User basis. However, if you want to buy a new licence that uses Concurrency as the basis for counting Users then you still have time; new Dynamics NAV licences that are based on User Concurrency can still be purchased up until 31st March 2019.

From the 1st April onward, new Business Central licences will only be available on a Named User basis. There will be two options available to companies wanting a new licence, you will still be able to buy a Perpetual licence and host it wherever you want (Private Cloud, On-Premise or within a Managed Service) or if you prefer you will be able to use Dynamics 365 Business Central on a Subscription basis (either in the Public Cloud hosted by Microsoft, on a Private Cloud, in a Managed Service or On-Premise). Please note, that a minimum term of 1 year now applies to the Subscription option.

You may have noticed that the last paragraph only mentions Business Central, that’s because the NAV brand is regenerating and from 1st April whether you are new or upgrading, we will be talking Dynamics 365 Business Central.

But how will this affect the majority of you reading this article – those of you who already have Dynamics NAV?

If you have no plans to upgrade, then life carries on as normal, you pay your BREP (Microsoft’s Annual charge) and you continue to buy users and objects as you always have.

But if you are planning to upgrade then you need to consider the following;

If you want to retain your Concurrent User licence you will need to do a licence upgrade in the next few months, basically before the 31st March deadline, after that, there is no option for an upgrade to a Concurrent licence. Microsoft will allow you to run your old licence while you do the upgrade (6 months being the official timeline) and you can retain your old database for the purposes of reporting and any local, legal requirements. This needs to be managed carefully though, the minute you upgrade your licence, the old one is frozen, so you are not allowed to add anything to it (users, objects etc.) and don’t forget, to upgrade you must be fully paid up on your Microsoft BREP.

Microsoft Dynamics 365 Business Central enables customers to upgrade their entry-level accounting software and legacy ERP systems with a single, comprehensive solution to manage finances, operations, sales and customer service. It is a cloud-based, all-in-one business management solution that helps organisations streamline business processes, improve customer interactions and enable growth.

If you are not upgrading in the next few months, what happens next?

Well, when you want to move you will have the same two commercial options detailed above; stay on a Perpetual licence or move to a Subscription-based licence.

If you decide to stay on Perpetual, then Microsoft will give you 2 named users for every full Concurrent user you have on your licence which was purchased before 1st October 2018. Any additional full Concurrent users which were purchased after 1st October 2018, will be upgraded on a 1-for-1 basis. There are 2 types of Named user, Essentials and Premium, the latter being for those companies using Manufacturing and / or Service Management. If you have limited users today, then they will be traded on a 1-for-1 basis for the new Team Member user and Device licences will also be done on a 1-for-1 regardless of when you purchased them.

The version of NAV you have and the functionality you purchased will dictate what your trade-in is worth. It’s important to note that when you trade-up, your annual BREP charge will be based on your old licence price and not the new list price of the Named user you now have! Any additional users you buy will be charged at the new list price.

Should Subscription be your licence model of choice then Microsoft has announced an incentive that acknowledges your years of commitment to the Dynamics NAV brand.

You can transition fully to a Subscription-based model and receive a 40% discount off the monthly Subscription price. Customers that choose this route will no longer be paying BREP.

You will have the opportunity to use the Cloud Add-On for an additional monthly fee per user. This essentially means you can have an On-Premise or Private Cloud solution that syncs key data to the Microsoft Cloud giving you the opportunity to take advantage of the Intelligent Edge, a set of Cloud-based connected systems and devices that gather and analyse your data giving users get real-time insights and experiences.

It is worth noting that the discount mentioned will only be applicable until 30th June 2021.

What next?

We haven’t talked specific pricing in this article, as every customer is going to have a different journey, we will aim to talk to all of you about your options, so you can make an informed choice on how you are going to pay for your Dynamics platform in the future.