Dynamics NAV, Dynamics 365 Business Central & Dynamics 365 CRM Enhancement Plans – what you need to know!

Microsoft have announced that effective 1st October 2023 all Enhancement Plans (EP) for Dynamics on-premise/perpetual license products will be subject to a price increase.  This affects Dynamics NAV, Dynamics 365 Business Central and Dynamics 365 CRM customers. 

A 1-year Enhancement Plan will go from 17% to 18% of Protected List Price (PLP) – in real terms a 3% price increase.  This follows on from a 1% increase in 2022.  Two examples, illustrating the impact of the increase for Dynamics NAV, are outlined below; 

According to Microsoft, “your Microsoft Dynamics enhancement plan service plan is what you need to stay compliant, competitive, and thrive in today’s complex global business environment” but what do you really get for this annual charge. Customers who are on an active EP receive: 

• New version rights
• Updates and tax and regulatory releases
• Access to Customer Source (online portal for self-directed support)
• Ability to add new objects (tables, page, code units etc. to your licence for development purposes)
• Access to promotions to transition to other licencing options

However, if you are on any version of Dynamics NAV or Dynamics 365 Business Central v13 then mainstream support is no longer available to you anyway, meaning that you will no longer receive product releases, security updates or service packs.  Customers on Dynamics 365 Business Central v14 have mainstream support available to them until October 2025. 

So, is there any way of avoiding this price increase or could that money be better used elsewhere? 

If you are on any version pre Business Central v13, continually develop your solution and plan further bespoke development in the coming months/years, then you will need to pay your EP to allow to you to purchase further objects for any development.  You will also be unable to add more users to your licence without an active Enhancement Plan. 

If you plan to update your solution and migrate to the online version of Business Central (SaaS) soon, then continuing to renew your EP is advised as it will give you access to available promotions to migrate your licence to a subscription licence and give you access to the online solution at a discounted price.  One of these dual-use licences will allow you to continue using the on-premises solution at the same time as implementing a SaaS solution.  There are 2 promotions that are currently available if your goal is to migrate to the SaaS platform. 

• Cloud Migration Program (expires June 2023)
• Bridge to the Cloud 2 (BTTC2)

Both promotions are subject to certain terms and conditions but essentially offer the same discount of 40% to New Commerce Experience (NCE) within Cloud Solution Pricing (Cloud Solution Provider) licences for 3 years. 

In the case of these customers, the promotional price gives all the benefits of SaaS, at an annual cost which is only a small amount more than they currently pay (and future EP increases can be avoided).

However, if you have no intention of moving to the SaaS platform now or soon, and you don’t intend to further develop or extend the use of your current version, then surely you must now question why you would pay the EP when it comes up for renewal. 

Let’s assume these customers do not have the budget or time for investment in their ERP system today and are unlikely to change in the next 3 years.  It is reasonable to assume EP will increase at 1% of PLP every year so they could cancel their EP and save that money.  If they then decided to migrate or reimplement to the SaaS platform, then they would not be entitled to any promotional discount, but this example shows that this does not offer significant financial benefit, and any additional cost saving can be used for the services cost of the implementation.

These examples are just that and each customer case is different. Lapsing your EP should be considered carefully – going back on to EP is possible but can be expensive as charges will be incurred, but in the interests of what is best for each customer, each scenario should be costed and configured to decide upon the best option.  This is easy to do by looking at your PLP and EP charges and comparing them to the standard licence costs on New Commerce Experience (NCE) within Cloud Solution Pricing (CSP), with and without promotions.  But do look into this first before just signing off that annual invoice without a second thought!

Contact us today if you need any help or assistance on understanding your specific scenario!