Catherine’s 20+ years’ experience of Microsoft Dynamics, from Navision through NAV and to Business Central, covers all aspects of customer relations, from demos, pre sales and implementations through to account management and aftercare, and such has a very in-depth knowledge of the system and how it relates to customers' needs.
Microsoft Announces Help with Enhancement Plan
It has certainly been a difficult year, with many businesses struggling financially. We have already seen a number of companies using Dynamics NAV and Dynamics 365 Business Central looking to drop their annual Enhancement plan due to issues with cash flow. Microsoft have now announced measures to help businesses maintain the all-important Enhancement whilst reducing the burden on cash-flow.
What is an Enhancement Plan?
The annual Enhancement Plan – called the Business Ready Enhancement Plan (BREP) – is the annual payment that entitles companies running either Dynamics NAV or Business Central to cumulative updates for functionality and security, as well as free upgrading of the software license to the newest versions. This recurring fee was applicable for anyone who purchased a perpetual license and has always been an annual payment at 16% of the total Dynamics license value at the original purchase price of those licenses.
Subscription style licenses have always included the Enhancement and so were not subject to this annual fee.
As you can imagine, having the Enhancement is extremely important in the long run, which is why most businesses accept the costs, as being able to upgrade licenses, get updates such as Making Tax Digital and security fixes are vital areas for businesses to invest in. However, in the current climate, where cashflow is an issue, companies are struggling with a big annual payment.
Microsoft’s Enhancement Plan (BREP) Offer
Microsoft has announced that they are creating an offer that will provide businesses with a monthly payment option. Microsoft announced this just over a week ago, but it has taken a lot of conversation, clarifications, and decisions to make sure that it is clear what this means! We have put together a lot of detail here, however if you would like more information, then please do contact our team.
Licensing through CSP and Dual Use
There will be a special Business Central license available under CSP (Cloud Solution Provider – this is how modern subscription licenses are purchased) at a reduced price (60% discount) compared to the standard Business Central License. With this special license, as long as you buy at least as much as your BREP amount in a year (ie a monthly price of 1/12th of your BREP value) you will continue to get your Enhancement Plan capabilities.
After 12 months you can decide whether you would like to continue with this offer for a maximum of a further 24 months. Once you have completed the offer in the 12-36 months total time, you can make the choice of whether you go back to your annual Enhancement Plan or take the opportunity to transition to the cloud (SAAS licensing). Please note that these are annual contracts – see the selection below about not maintaining the monthly payments.
As you can imagine, Microsoft would like this to be something that helps businesses to transition to the cloud, and so you will get to use these licenses for two purposes – the Enhancement Plan your existing on premise solution and the fully SAAS version of Business Central. The hybrid environments that help you to continue to run your on premise solution with a link to SAAS to make use of cloud only tools such as some of the AI features is designed to help businesses transition to the cloud where they may otherwise be reluctant to make the jump.
This offer is only available to businesses who have an existing Enhancement plan up to the end of May. The offer is also only eligible for normal licenses, and so organisations using government, charity and educational licenses cannot make use of this offer.
What if you have already dropped your Enhancement?
Obviously, this is coming into effect now, but issues caused by the coronavirus pandemic has been with us for most of the year. So, any business that have let their Enhancement Plan lapse from January 1st 2020 to May 31st 2020 will be able to take up this offer with no lapsed fees.
What if you don’t maintain the monthly payments?
It is important to note that if you stop the monthly payments at any point you will be moved back to the standard Enhancement Plan and will be responsible for the penalties and lapsed fees. If the Enhancement plan lapses it also resets the Protected List Price (PLP). This can have a significant impact on the annual amount paid especially where the license was purchased a number of years ago.
Dynamics Consultants Support
As with the Enhancement Plan, the support provided by Dynamics Consultants is an annual fee, with the similar implications on cash flow and operational necessity. In fact, many of our customers see the support and Enhancement as part of one annual fee. Therefore, we have made the decision to match the payment scheme that you choose with the Enhancement plan.
Your Payment options
To simplify your options, we have highlighted them as follows:
Annual - Continue with annual payments for support and/or Enhancement
Monthly - pay monthly for support and/or Enhancement, with your Enhancement moving to the CSP offer. Payments will be taken automatically via Direct Debit.
Quarterly – Pay quarterly in advance for support and/or Enhancement through standard invoicing, with your Enhancement moving to the CSP offer.
There are a lot of different questions and scenarios that have been brought up, and it would only cause confusion to go through all of them in one article. Our team do have a good understanding of the offers and their implications, so if you would like to discuss this further around your individual requirements, please do not hesitate to contact us.
I find their approach to our relationship very professional whilst being refreshingly realistic. We now consider them to be part of our teamTechnical Director, Bainbridge International