What Does Microsoft’s Newest Solution Mean for Existing Microsoft Dynamics Customers?

On April 2, 2018, Microsoft released its revolutionary business software solution called Dynamics 365 Business Central. The buzz around this solution is that it puts the full functionality of Dynamics NAV in the cloud. This sounds pretty cool, but it may also raise some questions, like:

• What does that mean for Dynamics NAV?
• What’s the difference between Dynamics 365 Business Central and Dynamics NAV?
• And what about Dynamics 365 Finance and Operations, Business Edition?

Here’s what you need to know about the launch of Dynamics 365 Business Central and how it impacts Microsoft’s other products.

Microsoft successfully sold four different on-premise  ERP products until the arrival of the cloud suddenly left them behind the rest of the industry. To compete with cloud software providers offering solutions built for remote access, seamless upgrades, and no hardware, Microsoft took two of their on-premise products and rewrote them to live in the cloud.

Dynamics AX (Axapta), built for enterprise businesses, became Dynamics 365 for Finance and Operations. While Dynamics NAV (Navision), built for mid-market businesses, became the newly released Dynamics 365 Business Central.

Developing Business Central took a bit longer than expected, though, so Microsoft launched a slimmed-down version in 2017 to satisfy users who were waiting for the product temporarily. This was called Dynamics 365 Finance and Operations, Business Edition.

What’s the difference between Business Central and NAV?

This isn’t quite the right question, because Dynamics NAV has been rebranded Dynamics 365 Business Central On-Premise. Both versions of Business Central (cloud and on-premise) have the same features and functions—the big difference is the platform.

Business Central On-Premise is built for on-premise deployment. It can also be hosted in the cloud, but it can’t offer the same seamless experience as a fully managed cloud-based solution.
Business Central Cloud gives you all the capabilities of the on-premise version, plus the benefits of a true cloud solution. With Business Central Cloud, you get things like easy 24/7 access anywhere from any device, real-time information flow, seamless upgrades, easy integration building through web APIs, and reduced hardware costs.

If you prefer to host your software at your location, Business Central On-Premise is a great option, but if your strategy is to move your operations to the cloud, Business Central Cloud is the product you’d prefer.

Another key difference between NAV and Business Central is that while NAV can be customized through development, Business Central can be extended by extensions which can be quickly installed and removed as needed.

What does this mean for Dynamics NAV?

On the one hand, nothing has changed. Microsoft will continue to offer Dynamics NAV as a solution, just under a new name: Dynamics 365 Business Central On-Premise. Dynamics NAV 2018 will be the last edition of the software with that name.

On the other hand, some things are changing for the existing versions of Dynamics NAV. Microsoft will continue to offer support for the existing versions of NAV, but it will no longer release upgrades for those solutions. To receive the latest features, you will need to transition to Dynamics 365 Business Central. Microsoft stopped selling Dynamics NAV to new customers on April 1, 2019. If you’re an existing NAV customer, however, you’ll still be able to purchase new licenses for your solution as needed.

The bottom line, Dynamics NAV is still a great solution, and if you’re already using it, it will serve you well. But it makes sense to start thinking about your 3- to 5-year strategy to transition to Business Central.

What should I know about transitioning to Business Central?

All versions of Business Central are currently available, so you can make the transition whenever it makes sense for your business. Making the switch to Business Central is not so different from any other NAV upgrade. For example, if you’re running NAV 2015, you might have been considering an upgrade. Now, instead of upgrading to a newer version of NAV, you’ll transition to Business Central.

User licenses.

Business Central does not offer concurrent user licenses as NAV does. Instead, each license has a named user. NAV customers will be offered two Business Central named users for each NAV concurrent user. Also, instead of NAV’s Limited User license, Business Central has a Team Member license, which offers the same level of access and functionality.

Subscription model.

 Just as they did for NAV, Microsoft offers both perpetual and subscription licenses for Business Central, although the subscription model is certainly the most popular. Because Business Central has named user licenses, under the subscription model, your monthly fee is based on the number of users you have.

Existing customer discount.

 Through June 30, 2020, Microsoft is offering a 40% discount on Business Central licenses for any existing Microsoft Dynamics customer. This includes any customer using:
• Dynamics NAV
• Dynamics GP
• Dynamics AX
• Dynamics SL
• Dynamics 365 Finance and Operations, Business Edition
This discount only applies to Business Central Cloud subscription licenses (you cannot use it for Business Central On-Premise licenses or perpetual licenses).

On-Premise Hosted vs. Cloud.

 If you host Business Central On-Premise in the cloud, you will have to pay for the software as well as the cloud hosting service. Microsoft is offering a discount if you choose to host the software on Azure as opposed to another cloud hosting platform. With Business Central Cloud, everything is included in one fee—software, cloud hosting, and management services.

Customizations and integrations.

 A transition to Business Central may require additional effort if you or your partner have developed customizations or third-party integrations for your NAV solution. Business Central uses a different, more cloud-compatible development platform for customizations and third-party product integrations than NAV does. This means any NAV customizations or third-party integrations you would like to continue using in Business Central may need to be redeveloped on the Business Central development platform. As part of your transition, you’ll need to evaluate your customizations and integrations and determine which ones are still required or cost-effective to redevelop for Business Central.

update 2023

Microsoft is no longer offering mainstream support to Microsoft dynamics NAV. However, if you are still using Microsoft Dynamics  We at SBC Dynamics ERP got your back.