Microsoft had already announced price adjustments earlier this year, but in the meantime further details have been added.
These adjustments mainly affect the different licence variants of Microsoft Dynamics 365 Business Central as well as older NAV versions used locally, installed and run on servers within your own network.
In addition to the price adjustments, we now have more information about the future of on-premises licences for Microsoft Dynamics 365 Business Central.
What will happen next with ‘traditional’ on-premises licences?
From 1 April 2025, new customers will no longer be able to purchase Microsoft Dynamics 365 Business Central as a perpetual on-premises option.
However, existing customers with an ongoing upgrade (or maintenance) plan will still be able to add users, objects or modules to their existing licence, for example.
With this move, Microsoft is taking an important step towards a rental and cloud-based purchase model, gradually abandoning the traditional purchase model.
What price adjustments will be made?
For customers using Dynamics 365 Business Central in the cloud (SaaS), the following prices apply to new purchases or annual renewals from 1 April 2023:
- Essentials version: €65.50 per user/month
- Premium Version: €93.60 per user/month
- Team Member version: €7.50 per user/month (without adjustment)
Please note that these prices will be revised every six months.
Existing subscriptions (started before 1 April 2023) will not be affected by the price increase until their annual renewal. Until then, price protection will apply, based on the time of your last purchase or renewal.
For customers who have received discounts on their subscriptions as part of previous Microsoft promotions, such as BREP2CSP, Bridge2TheCloud or Cloud Migration, the respective promotional terms (price protection or list price discount) will continue to apply until the end of the relevant period.
For customers with an active maintenance contract in Dynamics 365 NAV / Business Central On-Premises Licensing, from 1 October 2023:
- Purchase licences will see an 11% price increase, in line with BC SaaS licences. The new prices will only apply when the licence is renewed. There will be no conversion of the value of the existing licence.
- The maintenance contract percentage will increase from 17% to 18%. This price increase will only apply to existing maintenance contracts that are extended by one year after 1 October 2023.
Outlook and recommendations
With the abolition of purchase licences for new customers from 2025, Microsoft is taking an important step towards the cloud, following numerous technical advances. This is a logical and predictable development after the intensive changes, innovations and cloud-first focus of recent years.
However, we understand the questions that this upheaval may raise.
You’ll be able to continue using and extending your existing on-premises licence, thanks to an active enhancement (or maintenance) plan.
Subscriptions offer the possibility of adapting the scope of user licences as your business grows, but they are only available for use in the cloud. There is no alternative to this.
If you plan to migrate to the cloud with the next update, by running the solution on secure systems in Microsoft data centres, you will automatically benefit from the manufacturer’s ongoing developments, functional extensions and innovations from that point onwards.
If you are planning to purchase new user licenses and extensions to your on-premises license in 2023, we recommend that you acquire them with price protection before the October 1, 2023 deadline, if possible.