TLDR: Microsoft is sunsetting Dynamics GP and other legacy on-premises products. For Dynamics partners, this isn’t just a product lifecycle story. It’s a defining moment to lead clients through cloud migration, build recurring revenue, and differentiate your practice. Here are six cloud migration trends that should be on every Dynamics partner’s radar right now.
Migration, migration, migration. Sound familiar?
If you’re a Microsoft Dynamics partner, cloud migration is the backdrop against which virtually every client conversation takes place. And for good reason.
Microsoft has published a clear sunset roadmap for Dynamics GP: new subscription sales ended on April 1, 2026, mainstream support ends December 31, 2029, and security updates cease entirely on April 30, 2031. Meanwhile, organizations still running Dynamics NAV, AX or older GP versions are navigating their own version-specific end-of-life timelines, often without a clear migration plan in place.
For systems integrators and value-added resellers (VARs), this creates both urgency and opportunity. The partners who thrive won’t be the ones who wait for clients to ask about migration—they’ll be the ones who proactively shape the conversation. Below are six cloud migration trends worth knowing, and what each one means for your practice.
Today’s top cloud migration trends
Trend #1: Cloud is becoming the default, not the alternative
Not long ago, the question partners fielded from clients was “should we move to the cloud?” Today, the question has shifted to “when and how?” That’s a meaningful change.
The cloud ERP market is forecasted to surpass $110 billion by 2030, growing at a CAGR of 18%. A variety of data sources and publications also observe cloud ERP adoption is outpacing on-premises deployments—a gap that will continue to grow.
For your clients still running Dynamics GP, AX or NAV, this isn’t just a technology preference trend, but a calculation of business risk. Once mainstream support ends in 2029, GP will stop receiving tax table updates, regulatory fixes and product enhancements. Organizations in regulated industries or with complex payroll requirements will feel that gap well before the final 2031 security cutoff.
What this means for Dynamics partners:
Position the GP sunset not as a threat but as a defined, time-limited window. Microsoft’s Bridge to Cloud 3 (BTC3) promotion—running through December 2027—offers a 30% discount on Dynamics 365 cloud licenses locked in for three years, plus dual-use rights that let clients run GP and Business Central in parallel during transition. That’s a concrete, incentive-backed reason to start the conversation now rather than in 2028 when implementation pipelines will be congested.
Trend #2: Security concerns are less of a barrier and more of an opportunity
For years, security was the primary objection to cloud migration. “Our data is safer on-premises where we control it.” That argument has largely collapsed, and the GP sunset is accelerating its demise.
Without security patches after April 2031, any client still running GP will be operating an unpatched, unsupported ERP system. Cyber insurance providers are already scrutinizing unsupported software in underwriting decisions, and many industry reports cite improved security posture as a top driver for migrating to the cloud, not just a secondary benefit.
Meanwhile, Microsoft has embedded enterprise-grade security controls directly into Dynamics 365 and Business Central: Microsoft Purview for data governance and compliance, Microsoft Defender integration, multi-layered cybersecurity at the infrastructure level, and permission-bound Copilot access that ensures AI features can’t read data beyond what a user is already authorized to see.
Microsoft also introduced mandatory security compliance requirements for CSP partners as of October 2025—MFA for all admin users, a designated security contact in Partner Center, and 24-hour security alert response. This raises the bar for the channel, but it also signals to clients that partnering with a Microsoft-certified reseller carries genuine security accountability.
What this means for Dynamics partners:
Reframe the security conversation. Rather than defending the cloud against on-premises skepticism, go on offense: help clients understand what running an unpatched ERP after 2029 actually means for their cyber insurance, regulatory compliance and breach liability. Partners who build structured security assessments into their discovery process will convert more legacy-system clients, and position security as a differentiator rather than a checkbox.
Trend #3: Cloud migration is driving new revenue models
The traditional Dynamics partner revenue model was built on large, infrequent implementation projects: scope, deploy, train, move on. Cloud migration is breaking that model open.
The Microsoft Dynamics Services market stands at $11.98 billion in 2025 and is projected to grow at a 12.88% CAGR through 2030. The growth is being driven by the shift from project-based implementation to annuity-oriented managed services; a model where partners earn recurring margin through ongoing optimization, licensing management and continuous support rather than one-time deployments.
As clients move to Business Central or Dynamics 365 Finance SaaS, Microsoft delivers bi-annual release waves automatically. That cadence creates a steady demand for partners who can advise on new features, manage change, govern Copilot adoption and handle integrations as the platform evolves. Clients no longer just need a one-time implementation partner—they need an ongoing trusted advisor.
What this means for Dynamics partners:
Start building your managed services offering now if you haven’t already. The GP sunset is creating a multi-year wave of migrations that, if structured well, converts into long-tail recurring revenue. Think: monthly licensing margin through CSP, ongoing optimization retainers, Copilot governance services, and Power Platform extension work. The migration itself is the entry point; the recurring relationship is where margin lives.
Trend #4: Clients expect guidance, not just implementation
Migrating from Dynamics GP to Business Central—or from Dynamics NAV/AX to Dynamics 365 Finance—is not a lift-and-shift exercise. Clients know this, even if they can’t always articulate why. What they’re looking for from their Dynamics partner isn’t just technical execution. It’s strategic counsel.
A mid-size ERP implementation can range in cost from $150,000 to $2 million and take between four and 18 months to complete. More than 20% of migration and implementation projects take longer than expected, and more than a third of organizations that experience delays cite data issues as the primary reason. These aren’t failures of technology; they’re failures of planning, stakeholder alignment, and change management. Partners who lead with those disciplines win more work and retain clients longer.
Microsoft’s 2026 Release Wave 1 plans for Dynamics 365 make clear that the platform is rapidly becoming an agentic AI environment, with Copilot embedded across Business Central, Dynamics 365 Finance, Supply Chain, Sales and Customer Service. Clients who migrate to Business Central today aren’t just escaping an end-of-life system. They’re gaining access to AI-powered agents that automate sales and purchase scenarios, finance workflows and supply chain operations. Most clients won’t know how to unlock those capabilities without a knowledgeable partner.
What this means for Dynamics partners:
Build your discovery and advisory process around outcomes, not features. What does the client need to achieve in 18 months? Where are their manual, spreadsheet-driven workarounds slowing the business down? Which of Microsoft’s new Copilot agents could eliminate those pain points post-migration? Partners who show up as transformation advisors (not just implementation vendors) earn higher fees, longer contracts and stronger referrals.
Trend #5: Microsoft complexity is slowing down partner growth
There’s a meaningful tension in the Microsoft partner ecosystem right now. The opportunity has never been larger, but the complexity of navigating the Microsoft channel has also never been greater.
Consider what partners are managing simultaneously in FY26: CSP authorization requirements that now include annual reassessments, Solutions Partner designation maintenance (with Partner Capability Score thresholds), shifting incentive structures (the FY26 Business Applications core incentive dropped from 4.75% to 4%, though a new 7.5% Growth Accelerator was introduced for year-over-year revenue increases), new Dual-Use Rights license key download requirements for Business Central on-premises customers effective June 2026, and a July 2026 Microsoft 365 pricing update driving renewal urgency.
For smaller Dynamics partners without dedicated licensing or operations staff, keeping pace with these changes is genuinely difficult. Missed incentive claims, designation lapses or compliance gaps don’t just cost margin—they can affect CSP authorization status entirely.
What this means for Dynamics partners:
This is where working with the right distributor or indirect CSP provider becomes a structural advantage rather than just a convenience. A distributor like Sherweb absorbs the complexity of Microsoft program management—tracking designation requirements, incentive eligibility, license compliance changes and pricing updates—so your team can focus on client delivery. Partners who try to manage this in-house often find themselves reacting to changes rather than capitalizing on them.
Trend #6: Partner ecosystems are becoming growth multipliers
No single Dynamics partner can be everything to every client. The practices that are growing fastest in 2026 are those that have built deliberate ecosystems, combining their core ERP or CRM expertise with complementary security, Azure infrastructure, Power Platform, and co-sell relationships.
Microsoft’s CSP incentive structure explicitly rewards ecosystem breadth. Growth Accelerators apply independently across Microsoft 365, Azure and Business Applications, meaning growth in one area doesn’t offset flat performance in another, and partners are rewarded for expanding clients across the full Microsoft stack. Microsoft also expanded Solutions Partner designation eligibility in May 2026 to include Dynamics 365 Contact Center and Copilot Studio as qualifying workloads, giving partners more pathways to designation.
For Dynamics partners whose clients are mid-migration, adjacent Microsoft plays are significant: Azure infrastructure for hosting transition environments, Microsoft Sentinel for security monitoring, Power Automate for process automation post-go-live, and Copilot Studio for building custom AI agents on top of Dynamics data. Each of these is a billable engagement that deepens client relationship and expands your CSP revenue footprint.
What this means for Dynamics partners
Map your current client base against the full Microsoft Business Applications and Azure footprint. Where are clients still running workloads outside your managed scope? Build referral relationships with Azure infrastructure specialists, security partners and Power Platform developers where your own practice has gaps. The partners winning the biggest migrations in 2026 are those who can credibly cover the full solution, or who have tight co-delivery arrangements with partners who cover what they don’t.
Key takeaways for Dynamics partners to consider
The GP sunset is a forcing function, but it’s also a gift. Clients who have deferred cloud migration decisions for years now have a concrete, Microsoft-confirmed reason to act. The partners who capitalize on this moment will be those who show up prepared: with a clear migration methodology, a managed services model that extends the relationship beyond go-live, and a distributor relationship that handles the Microsoft complexity overhead so their teams can focus on delivery.
Practically, that means:
- Proactively auditing your client base for GP, NAV, AX, and older Business Central on-premises versions, and prioritizing outreach to those most exposed to the 2029 mainstream support cutoff
- Building BTC3 promotion conversations into Q3/Q4 2026 planning cycles, while the 30% discount and dual-use rights window is still open
- Structuring migration engagements to convert into managed services retainers such as Copilot governance, licensing management and optimization services that create recurring margin without requiring net-new clients
- Leveraging Microsoft’s co-sell incentives and Growth Accelerators to expand client footprint across Business Applications, Azure and Microsoft 365
- Partnering with a distributor who can simplify CSP program management, track incentive eligibility and provide dedicated Dynamics enablement, so your practice spends less time on program administration and more time on client success
Sherweb can help position your Dynamics business for future success
Sherweb is a full-service Microsoft distributor that specializes in helping Dynamics partners navigate cloud migration, simplify licensing complexity and build scalable, profitable practices. Whether you’re guiding clients off Dynamics GP, ramping Business Central implementations, or building out a managed services model, we’re here to support the practice behind the practice.
