No, this is not clickbait. Dynamics NAV is really moving to the cloud. I’m not talking about a lighter version of NAV; I’m talking about full NAV functionalities on the cloud that are part of Dynamics 365.
This project is tentatively called Dynamics “Tenerife.” Although this will not be the final product name, it is the name we will use throughout this article to refer to this new version of Dynamics NAV.
What is Dynamics NAV?
Not familiar with Dynamics NAV? No worries. Here are a few facts to help you catch up.
- NAV is an Enterprise Resource Planning system (ERP) targeted at small- to medium- sized businesses.
- NAV is short for Navision, a suite of accounting software acquired by Microsoft in 2002.
- The solution was released in 1987 and has grown rapidly to reach 100,000 users in 2017. It is one of the most popular ERP solutions for SMBs.
- NAV features a starter pack and an extended pack, both of which are offered at reasonable prices for SMBs.
- Due to the popularity and the longevity of NAV, there is a vast network of developers and consultants who are familiar (even proficient) with the application. This is helpful for users who need support and/or consulting.
- Features in NAV include:
o Financial management and accounting
o Supply chain, manufacturing and operations
o Sales and service
o Project management
o Business intelligence and reporting
What is Dynamics 365?
Before we launch into the big news, there’s one last player we need to introduce: Dynamics 365. It’s no secret that Microsoft has adopted a cloud-first strategy over the years and by looking at the incredible success of Office 365, it’s easy to see why.
Enter Dynamics 365: a combination of CRM and ERP in one unified system that is available on the cloud. Dynamics 365 is based on existing and proven applications such as Dynamics CRM and Dynamics AX. It integrates easily with Office 365 and Power BI and because it’s built in Microsoft Azure, users can benefit from features such as machine learning and Cortana intelligence. Although relatively young (Dynamics 365 was officially released in 2016), this product has garnered much attention recently. It taps right into the growing demand for end-to-end cloud business applications.
Why is This Happening?
Now that you know more about NAV and Dynamics 365, we’ll try to explain why Microsoft is doing this and what it means for you as a user or a Dynamics partner.
There seem to be two main reasons for this move:
SMBs Dynamics NAV and its functionalities
There’s a good reason why NAV has been so popular over the years; it’s a great product. Its functionalities and simple user interface have helped many small- to medium-sized businesses become more productive. Microsoft has already tried to replicate NAV’s success with Dynamics 365’s Business Edition. However, they quickly realized that this version falls a bit short for users who were loyal to NAV. This is why they recently announced they would be modifying the offering in the future.
SMBs are swapping on-premises applications to cloud solutions
NAV is great, but it’s an on-premises application. More and more SMBs want to subscribe to cloud applications. They want a plug-and-play solution that can be accessed and anywhere. Most importantly, they don’t want to worry about servers and infrastructure.
As Alysa Taylor, Microsoft’s General Manager of Business Apps and Strategy, put it: “We also realize that smaller businesses sometimes prefer an end-to-end business management solution, instead of an application for each individual line of business within their organization.”
Microsoft Dynamics 365 Business Edition
When Microsoft introduced Dynamics 365, they introduced the Finance and Operations module, which was separated in two separate editions: Business and Enterprise. While the Enterprise Edition targeted AX users (an on-premises ERP system used mostly by large organizations), the Business Edition was meant to be a lighter version of NAV which would be available only on the cloud. The problem was that the Business Edition did not include the full features of NAV. In fact, some key financial features as well as manufacturing and warehousing functions were missing. This created a gap for users who wanted NAV functionalities, but also wanted to use the software on a SaaS model.
NAV On-premises is Here to Stay
There are many businesses that just won’t move to the cloud and most of them have valid reasons. Microsoft understands this and will continue to take care of these customers by providing support and maintenance. Tenerife will also be a newer version of NAV with updates and new features which will be available on both the cloud and non-cloud versions.
This strategy aligns with Microsoft’s overall strategy which is “Cloud First” not “Cloud Only.” Note that Microsoft will continue to sell other ERP products such as AX, GP and SL.
When Can We Expect This to Happen?
It’s hard to know for sure, but right now Microsoft plans to announce the final version of Tenerife in the spring of 2018. By this time, the Dynamics 365 product line should have reached a certain level of maturity and there should be fewer changes in the future. That being said, anything can happen with Microsoft!
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What Does This Mean for Channel Partners?
The cloud version of Dynamics Tenerife will be sold exclusively through Cloud Solution Providers. This is an amazing opportunity for resellers to add a highly anticipated product to their portfolio. All those potential clients who were reluctant to switch from NAV due to missing functionalities would probably be willing to switch now.
Since Tenerife will only be sold through Cloud Solution Providers, this is a great time for NAV partners to join Microsoft’s Cloud Solution Provider program. By becoming a CSP (Direct or Indirect) resellers will also have the opportunity to sell other Microsoft products such as Azure and Office 365.