I won’t sugar coat it. Microsoft’s latest branding efforts for its mid market ERP solution have been very laborious. Don’t believe me? Here are all the names they used to talk about the same product in the past couple of years:
- Dynamics 365 for Financials
- Dynamics 365 for Finance and Operations Business Edition
- Dynamics Tenerife
- Project Madeira
- NAV in the cloud
- Dynamics 365 Business Central
Naturally, this caused some confusion and frustration in the Dynamics community. There was one thing, however, that kept us all highly optimistic. A few months ago, Microsoft announced Dynamics Tenerife: a cloud version of its popular ERP product NAV (formerly known as Navision).
That’s right, full NAV functionality on the Dynamics 365 platform. Pretty exciting, right? And now, Microsoft’s promise has come to fruition.
1. What Exactly Happened?
On March 13, 2018, Microsoft announced the much-anticipated release of Dynamics 365 Business Central.
- This product will feature the full set of NAV functionality on a SaaS model
- Business Central will be sold exclusively through the Cloud Solution Provider (CSP) program
- The official release date is April 2nd 2018
- The price is set at $70 USD for the “Essentials” version and $100 USD for the “Premium” version
2. What is Dynamics 365 Business Central?
First, let’s start with the exact definition from Microsoft:
Microsoft Dynamics 365 Business Central is a business management solution that helps companies connect their financials, sales, service, and operations to streamline business processes, improve customer interactions, and make better decisions
Now what exactly does that mean? Business Central is the perfect solution for a company that has outgrown your typical entry-level accounting software, such as Quickbooks. It is a complete ERP solution that has all the features you’d expect in a midmarket ERP. What’s even better is that it comes at a price that is very reasonable, especially when you compare it with higher-end ERP solutions like SAP or Oracle.
Here’s an overview of the features available:
- Budgets/Account Schedules
- Sales Orders/Invoicing
- Purcasing/Purchase orders
- Fixed Assets
- Inventory (stock
3. Why is Dynamics 365 Business Central so Important?
Saying Dynamics NAV is a popular ERP product is like saying Canada has cold winters. In other words, it’s a major understatement. Dynamics NAV has over 160,000 companies and millions of users all around the world. That user base includes a flurry of vendors and partners who provide products and services related to NAV.
The only “problem” that Microsoft has with NAV is that it’s an on-premises software. On-premises products don’t fit very well with Microsoft’s aggressive “cloud-first strategy.” Sure, you could host NAV on a virtual server so that it was accessible on the cloud, but you still had the cost of the server and you had to manage it. The solution was to offer a full version of NAV in the cloud and link it to the already popular Dynamics 365 brand.
So to answer the question, the release of Business Central is important because we are combining the popularity of NAV as an ERP product with the growing trend of the cloud. This new combination will surely open up new opportunities for Microsoft Dynamics partners.
4. What Happened to the Business Edition and How is This Different?
Microsoft’s initial thinking with the Business Edition was good. ‘Let’s strip down NAV and sell it as a SaaS solution at a price businesses could afford’. As we now know, this strategy wasn’t successful and the Business Edition was canceled (or at least rebranded).
Many believe that the product sort of fell between the cracks and this is why it didn’t get full market adoption. The Business Edition didn’t have the necessary features to satisfy mid-size businesses, but it was too complex and expensive for smaller businesses.
Things should be different this time because Microsoft is bringing a new product to the table that provides full NAV functionality and new features, while keeping the SaaS model.
5. What Does the Pricing Look Like?
As mentioned above, pricing for Business Central will be quite affordable.
- Dynamics 365 Business Central Essentials from $70 USD/User/Month
- Dynamics 365 Business Central Premium from $100 USD/User/Month
- Team Member license: $8 USD/User/Month
Of course, there will be additional costs associated with implementing the solution. While Microsoft has made efforts to empower users to customize their applications as much as possible, we’re still talking about a fairly complex solution. This means users will need the help of external consultants.
6. How Does the Release of Dynamics 365 Business Central Affect NAV?
For now, this doesn’t affect Dynamics NAV. While it’s true that Microsoft wants to give more “love” to cloud products, NAV is simply too profitable to neglect. If you read between the lines, you can guess that eventually Microsoft will invest most of its efforts in updates and R&D for Dynamics 365. But for now, Microsoft firmly intends to keep both Dynamics NAV and Dynamics 365 users happy with new releases and updates. Long story short, if you’re a NAV partner or a NAV user, you shouldn’t be too worried by this bit of news.
7. What Does this Mean for Dynamics Partners?
Here’s the question you’ve been waiting for: What does this mean for you as a Dynamics partner? Will you get more business? Less Business? Will you make more profit from reselling licenses? Unfortunately, we can’t predict the future so we don’t have the answers to all these questions. However, here are few things we do know.
NAV and “the Cloud” are a match made in heaven
Microsoft is bringing two things to the market that businesses around the world want: NAV and the Cloud. We don’t want to be overly simplistic, but if you put these two things together, you get a product that you can sell to a lot of people.
Business Central will allow you to target new markets
A new offering means new opportunities. Think about all of the companies out there that were too small for the Dynamics Enterprise Edition (the cloud version of Dynamics AX), but still wanted a complete ERP solution on the cloud.
Partners will be able to build add-on or embedded solutions in Dynamics 365
Another exciting thing about this new release is that it will allow partners to build apps and add them to Dynamics 365 Business Central using tools like Power Apps or Microsoft Flow.
Partners will want to leverage the AppSource even more
Much like ISVs did with NAV, Dynamics partners will want to take advantage of the AppSource and market their complementary solutions on the platform. Among several other benefits, the AppSource will allow you to gain visibility for your solutions as well as your consulting services. Note that Microsoft can support you in this with different marketing tools and programs.
Partners will need to adapt their sales and marketing strategies
There will be plenty of opportunities to sell Business Central. The real question is: How will your company distinguish itself in the market and be able to attract new customers? Chances are you’ll need to adapt your sales and marketing strategies to fit your customers’ needs.
Remember, you’re not selling packaged software anymore. This means your sales pitch needs to change. How will you communicate the many benefits of the cloud in a way your customers can understand? How will you make the case for monthly subscriptions knowing that your customers are used to paying one lump sum for their software? How will you simplify the total cost of ownership (TCO) calculation for your clients (including the distinction between CAPEX and OPEX)?
These are questions we’re asking our partner community to make sure they’re ready to seize this amazing market opportunity. Note that since pricing will be the same for all partners, defining your value proposition is more important than ever.
While we’re still learning about Dynamics 365 Business Central, there’s a lot to be excited about. And we’re not even considering the upcoming release of the Sales Professional version of Dynamics 365 or the new Marketing app which was officially announced at the same time.
With these latest efforts, Microsoft is making a clear statement: It wants to continue gaining ground in the SMB market, which has yet to be fully exploited for ERP solutions. Now it’s up to the partner community to position itself to take full advantage of this opportunity.
Visit Sherweb’s partner page to see how we can help you expand your cloud business with Dynamics 365 Business Central.