Which Has the Lowest ERP Total Cost of Ownership - Microsoft Dynamics 365 Business Central or Dynamics NAV?

July 26, 2018 Maher Malki

Whether you use Microsoft Dynamics NAV, Microsoft Dynamics 365 Business Central, or another ERP system, you know that the total cost of ownership is an important consideration. Perhaps you are evaluating new software for a possible transition. Which solution comes with the lowest Total Cost of Ownership (TCO)?

One of the most cited advantages of cloud computing is the cost savings that can result from minimizing your onsite hardware investment and the resources required to maintain it. With on-premise deployments, you need to keep in mind several factors in addition to the software such as IT infrastructure, ongoing maintenance, support, and periodic upgrades. Likewise, the size of your organization and the number of users also factor in. Let’s dig deeper into the TCO comparison.


Dynamics 365 Business Central in the Cloud

Dynamics 365 Business Central is a cloud solution hosted by Microsoft. You don’t have to install clients on your user machines—they simply access everything from a browser. Licenses are subscription-based and can range from $75-100 dollars per user per month. Many customers like the idea of paying only for what you use so the license fees can fluctuate from month to month as staff numbers change. With this solution, the initial spend needed to get up and running is minimal, making this an attractive choice for many organizations and particularly those that do not have internal IT resources. Business Central can be a very attractive and low-cost entry point for a world-class ERP system.


Dynamics NAV On-Prem

Conversely, Dynamics NAV is commonly hosted on-premise and you (or your partner) will be responsible for performing and managing all upgrades and maintenance. You must purchase hardware and infrastructure, as well as software, up front. A user license for NAV starts at $3,000 USD. In this scenario, your team (or partner) is responsible for the work, costs, and risks associated with ongoing management of the system. The bottom line is when you are thinking about Dynamics NAV, you must also consider the full range of costs including hardware, software, training, system updates, disaster recovery, and security for your TCO.

While Dynamics NAV clearly requires more upfront investment, there are additional considerations to take into account before determining which model is best for your organization. Any cost comparison depends on CAPEX (for capital expenditures) vs. OPEX (for operational expenditures), and your company’s financial and cash flow requirements.

To make it easier on you, Western Computer can help you assess your Total Cost of Ownership over a 3, 5, and 10-year period. Use our fast and easy online template, to answer these three questions:

  1. How many users in your company need full access to the ERP software?
  2. How many read-only or light data-entry users does your company require?
  3. What is your existing system?

After you submit your responses, Western Computer will provide total cost of ownership information customized for you and your environment. Let us help you with the important task of selecting, deploying, and supporting your ERP solution to deliver the fast return on your investment.

About the Author

Maher Malki

As Western Computer's Dynamics NAV Program Manager, Maher Malki connects with his clients' IT departments to ensure that they have the best, most well-rounded solution to their unique business needs. Maher has over 16 years of experience in the Distribution, Manufacturing, Retail, Non-Profit, and Service industries. His deep technical expertise has also earned him a wide variety of Microsoft professional certifications.

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