Minor updates to Business Ready Licensing, the packaging plan for Dynamics enterprise resource planning (ERP) products, increases volume discounts on client licenses and shifts some functionality in the plan's Business Essentials and Advanced Management packages. Because volume discounts apply to customers with more than 10 user licenses, most will benefit from the volume discount increase. However, the packaging changes affect primarily Dynamics NAV and SL; Dynamics AX and GP customers will see few changes.

Better Volume Discounts, More Features

Historically, customers licensed the four Dynamics ERP products (Dynamics AX, GP, NAV, and SL) module by module, working with MBS partners to choose specific modules. In Aug. 2006, Microsoft introduced the Business Ready Licensing plan to simplify licensing by eliminating per-module pricing (the company is phasing out per-module pricing in Oct. 2006).

The plan defines two product bundles common to all Dynamics products:

• Business Essentials Edition, which includes a core set of financial accounting, supply chain management, and reporting features
• Advanced Management Edition, which supplements Business Essentials with advanced financial features, more sophisticated analytics and reporting, and additional supply chain management capabilities.

Pricing for the bundles is based mainly on the number of concurrent users. However, Advanced Management Edition customers can purchase several Advanced Management Enterprise modules (such as a project management module) on a per-module basis. Advanced Management Enterprise modules are licensed for a flat fee; per-user pricing does not apply.

Microsoft made several tweaks to Business Ready Licensing in Oct. 2006. The updates include the following:

Increased volume discount. Microsoft is increasing volume discounts for Dynamics ERP products between 5 and 10 percent above current levels, depending on the number of users licensed. The company does not publish Dynamics ERP volume discounts (and Microsoft's Licensing Advisor tool does not cover Dynamics ERP products) but says that discounts kick in for customers purchasing more than 10 user licenses.

Packaging adjustments focused mainly in Dynamics NAV and SL. For example, several NAV supply chain management features are moved from Advanced Management to Business Essentials, and a number of SL project management features are bundled with Advanced Management rather than sold separately as Advanced Management Enterprise modules. Finally, several AX and NAV modules (AX's human resources modules and developer tools; NAV's Table Designer) that were previously available only to Advanced Management customers can be purchased by Business Essentials customers on a per-module basis.

The last change reflects an important drawback of Business Ready Licensing compared to the previous per-module plan: although fixed packaged licensing is simpler, it is also less flexible. It may also hint at similar adjustments to come. If customers and partners complain that Microsoft's defined bundles are too restrictive, the company could choose to offer additional per-module functionality to Business Essentials customers.

Pricing and Resources

The Business Ready Licensing plan is available for Dynamics AX, GP, NAV, and SL worldwide. The price for Business Essentials is US$2,250 per user for GP, NAV, and SL; Advanced Management will cost US$3,980 per user. In either edition, AX licenses will cost an additional 15 percent.

More information on the Dynamics licensing plan is at www.microsoft.com/dynamics/purchase/totalcosts.mspx.

Business Ready Licensing is described in "New Dynamics Licensing Includes Free CRM" on page 12 of the Sept. 2006 Update.