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As Microsoft partners and clients, we can tell you one thing we’ve learned over the years; it’s hard to predict where Microsoft will go next. By now, we have grown used to Microsoft making major adjustments in a matter of weeks. This includes changing product names, licensing options, etc.

The Dynamics product line is no different. Just recently, Microsoft announced it was killing the business edition of Dynamics 365 for Finance and Operations. This left many people wondering what would come next for the Dynamics 365 and Dynamics NAV product lines.


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While we don’t have the exact answer to this question, there are two things that seem clear:

Dynamics NAV is here to stay.

NAV is still an incredibly popular product and Microsoft has no intention to discontinue it or stop supporting it (at least in the near future).

Dynamics 365 is the future.

Microsoft intends on focusing its efforts on Software-as-a-Service (SaaS), modular and subscription-based software.

Knowing this, it’s important for you to understand the basic similarities and differences between these two product offerings. In this article, we will compare both products and hopefully help you get a better idea of which one is right for you.


What is Microsoft NAV?

Microsoft NAV was released in 1987 and currently has over 100,000 users. It started as an on-premises application, although clients now have the option of hosting the application on a private or public cloud.

It is designed for small to medium-sized businesses, but the price tag often hinders very small businesses from using it. NAV has a variety of functions for financials, manufacturing and warehousing.


What is Microsoft Dynamics 365 for Finance?

Microsoft Dynamics 365 was released in 2016. It is offered as SaaS, meaning it is cloud-based and paid for by a monthly subscription. It includes basic financial functions with modules that can be added as required. The pricing is targeted towards smaller businesses when compared to NAV. Dynamics for Finance includes automatic updates, which NAV doesn’t have.


How Dynamics 365 and NAV are Similar

Microsoft Dynamics 365 and Microsoft Dynamics NAV share the same codebase, meaning they are similar products. Both will give you:

  • Anytime and anywhere access
  • The same basic financial management features such as General Ledger, Accounts Receivable and Payable, Inventory and Fixed Assets
  • Purchasing, Service Management, Jobs, Item Management and Sales features
  • Full integration with Office products like Excel and Outlook
  • Integration with Lexmark
  • Similar user-friendly interface on desktop, mobile and tablet


Key Features Exclusive to NAV

The following features are exclusive to NAV. If one of these functions is critical to your operations, you should consider NAV as your best option.

  • Manufacturing
  • Warehousing
  • Cost accounting and consolidation (recently released in Dynamics 365 Finance & Operations Business)


Key Differences between Dynamics NAV and Dynamics 365

Deployment Options

NAV can be hosted on-premises or on the cloud. Also, NAV, software is purchased and each user has to purchase a license. There is limited flexibility.

With Dynamics 365, the software is hosted on Microsoft Azure servers. The end user doesn’t have to worry about data storage.


NAV is highly customizable and it is one of the reasons users love this product. They can actually go into the source code and customize the application based on their specific needs.

You can’t do that with Dynamics 365. Instead of customizing, you have to add applications which can be found on AppSource (an online store which hosts applications developed by a large community of Dynamics partners and ISVs).

When NAV is a Better Choice

You need additional features such as manufacturing and warehousing

If your business really needs these features to operate, NAV is the way to go. Microsoft has plans to move all the Dynamics NAV features to Dynamics 365. However, until then, NAV is your only option.

You need to modify source code

A lot of NAV users like the fact that they can go directly into the source code to modify and customize their ERP. This is no longer possible in Dynamics 365. Instead, users are encouraged to buy additional apps from AppSource.

You absolutely want an on-premises system

Since Dynamics 365 is only available on the cloud, users who prefer to have their ERP on their own servers will have no choice but to go with Microsoft Dynamics NAV.


Learn more on how to manage your business with Dynamics 365


When Dynamics 365 is Your Best Bet

You want additional flexibility

Consider this example:  A company has 10 users year-round, but needs an extra 10 users for only a few weeks every year. With Dynamics NAV, this company would need to buy 20 total users even though 10 of them are used only 10% of the time. With Dynamics 365, this company could instantly scale up to 20 users and then scale back down to ten. Of course, this flexibility comes with substantial savings.

You want subscription-based pricing

Instead of having to invest a large sum of money upfront, Dynamics users pay a monthly subscription. A lot of companies prefer this option since it is less taxing in terms of cash flow requirements. This SaaS model also means that you get the updates from Microsoft as long as you pay the monthly fee. NAV requires that you purchase the latest version to get the updates.

You want a plug-and-play solution

As mentioned earlier, Dynamics 365 is handled entirely by Microsoft. This means you don’t have to worry about infrastructure, servers and other technical problems. Also, you should go with Dynamics 365 if you want to limit (not eliminate) implementation efforts.

You have a limited budget

In general, Dynamics 365 will be a cheaper option when compared to NAV. Of course, this will depend on your needs and on how you calculate your ROI. With Dynamics, you don’t need an upfront investment and you pay relatively small monthly increments.


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The Best of Both Worlds

It was announced recently that a cloud-based version of Dynamics NAV would be available in the spring of 2018. This should allow users who need NAV functionalities to finally make the move to the cloud. This project is called Dynamics Tenerife, although it is likely this name will change once the product hits the market.

This new version of NAV will be sold exclusively through Microsoft’s Cloud Solution Provider program (CSP). This is a great opportunity for NAV partners to become resellers in the CSP program and diversify their revenue. Reselling through the CSP means you can also resell other Microsoft services such as Office 365, Power BI and Azure. If you wish to learn more about our CSP program, download our complete guide here!

Written by Alexandre Painchaud Marketing Strategist @ Sherweb

Alex is always searching for new ways to help partners crush their marketing and sales goals. Previously a marketing content specialist at Sherweb, he’s well-versed in how to engage both existing partners and their potential clients in products, tools and solutions to help them succeed. When he’s not in the office planning new initiatives to drive partner revenue, Alex enjoys playing basketball and listening to true crime podcasts.