FAQs: Dynamics AX vs Dynamics 365 Finance & Operations

Leaders of companies using AX have many questions about Dynamics 365 Finance & Operations. In this article, we’ll answer some of the most important questions we hear from clients: those about cost, ease of use, and security/stability.

For an overview, start with this quick comparison table.

For deeper details, click on any of the pink text in the left-hand column to jump to the specific questions and full answers in the FAQ below.

For a video summary of the differences in security, infrastructure, updates, reporting, and integrations, watch this recorded webinar.

FYI on Product Names

In this article, we’re comparing Dynamics AX to Dynamics 365 Finance & Operations (D365FO).

Even though most people still call it “Finance & Operations,” Microsoft now licenses it as “Finance and Supply Chain Management.”

Is Dynamics 365 Finance & Operations the Next Version of Dynamics AX?

Sort of. Dynamics 365 Finance & Operations is effectively the next version of AX. D365FO is built on the AX code framework and serves the same ERP needs of the same kinds of enterprise-level customers. AX is no longer available for new implementations.

Like AX, Finance & Operations has excellent capabilities for complex manufacturing and warehousing needs. And many companies on AX are now considering moving to Dynamics 365 Finance & Operations.

Note: Microsoft has a broader set of products under the Dynamics 365 brand name. It’s not limited to Finance & Operations, nor even to ERP. There are other D365 apps companies can license too, like Dynamics 365 Sales, which fulfills some CRM needs.


What Is the Difference in Cost Between AX and Dynamics 365?

The biggest difference in cost is that AX requires infrastructure costs for servers. Dynamics 365 does not.

If you are on AX, you are paying server costs. Those average $25,500/server + $13,950/server/year (according to Forrester). Whether you have the servers in-house or hosted with a 3rd party, those costs are necessary to pay for the servers themselves, the rooms and buildings that house them, heating, and cooling.

You also need to employ or outsource skilled IT staff who maintain the servers your AX system runs on.

If you’re on Dynamics 365, your ERP is hosted in Microsoft’s Azure cloud. You do not pay anything for servers. You only pay your user license costs.

Licensing costs are discussed below.

Please note that AX can no longer be purchased for new implementations.

How Much Do Finance & Operations Licenses Cost?

Most of your full users’ licenses will cost $210 USD/user/month ($268.80 CAD/user/month). There are a lot more details and options behind that number.

To understand the detailed breakdown of F&O licensing costs and options, please read our article focused on Finance & Operations Pricing.

To learn about promotional pricing for customers moving from AX to F&O, and for a comparison of AX and F&O license types, read the following sections.

What Are the Main Differences in User Licensing Between AX and Dynamics 365?

AX user licensing is perpetual. Dynamics 365 user licenses are billed monthly or annually.

Dynamics AX has 4 license types: for Enterprise, Functional, Task, and Self-Service users.

Dynamics 365 Finance & Operations also has 4 license types: Full, Operations Activity, Team Member, and Device. However, they don’t line up exactly with the AX licenses.

How Do AX License Types Match Up to Finance & Operations License Types?

Here’s a quick overview table. More details below.

The Full User type in Dynamics 365 Finance & Operations is largely equivalent to the Enterprise license from AX.

The Operations Activity and the highly affordable Team Member licenses are similar to the AX Functional, Task, and Self-Service licenses. These licenses may be right for C-level leaders who need to see data, or front-line workers who need to enter it. Discuss with an experienced Microsoft Partner to determine what mix of licenses is best for your company.

For warehouse or retail workers, the shared Device licenses may be most effective.

Is There Promotional Pricing for Moving from AX to Finance & Operations?

Yes. Most companies on AX are eligible to receive 40% discounts on license purchases for Dynamics 365 Finance & Operations.

For details of the offer, and for strategy for how best to take advantage of it for your business, contact Encore or another Dynamics Partner.

Ease of Use

Is Dynamics 365 Reporting Better than AX?

Yes. A lot. Creating reports in AX was very complex. In AX 2009, the database was quite slow to work with for reporting. In AX 2012, Microsoft made the database faster, but it also became harder to query.

Dynamics 365 offers the best of both worlds: it’s fast and easy to create reports. There are many ways to get to the data. Also, Dynamics 365 reporting is often further enhanced with Power BI. Power BI Pro licenses are $9.99 USD/user/month ($12.80 CAD/user/month).

Are Dynamics 365 Updates Easier to Handle than AX?

Yes, but you also have to think about updates differently in D365. In AX, you must do a separate manual update for each machine and SQL server, and often your Windows OS. That’s very labor-intensive. And many companies choose not to update for years at a time.

In Dynamics 365, because it’s built on the Microsoft Cloud, your partner can update your whole environment remotely. You can choose to skip up to 3 updates, so if an update happens to fall at the same time as your year-end or some other big event, you can postpone the update. But please note: Dynamics 365 updates still need to get done. They are important for your security and optimal functioning.

Is Dynamics 365 User Access Easier Than AX?

Yes. Dynamics AX requires a desktop to access. Many companies set up virtual machines to enable remote work, especially during the pandemic. But that process is slow and prone to problems, which can prevent a remote worker from doing their job until an IT staff member fixes the issue.

Dynamics 365 is web-based, allowing access from anywhere with an Internet connection. And it’s mobile-ready, so your team can use the system from a tablet or phone while they are on the go.

Make sure to use multi-factor authentication and learn best practices to secure your Dynamics 365 tenant.

Does Dynamics 365 Require an Internet Connection to Work?

Generally, yes. There may be difficulties for a business that has, for instance, warehouses in remote locations with weak Internet access.

Dynamics AX does not usually require that level of Internet connectivity, especially if your servers are on-premise.

It is possible to have non-cloud deployments of Dynamics 365 Finance & Operations with less need for connectivity, but you will not get access to all the same features as in a cloud deployment.

Does Dynamics 365 Integrate with Other Apps/Products Better than AX?

Yes, by far. Dynamics AX can be integrated with other products, but doing so requires customization, which can be prone to breakage.

The situation is much better for Dynamics 365 customers. There are 4 main categories of apps that Dynamics 365 Finance & Operations integrates well with:

  1. Office 365 apps (Excel, Outlook, etc.), which your company is probably already using.
  2. Power BI and the rest of the Power Platform suite
  3. Other Dynamics 365 apps, including those that fulfill your CRM needs.
  4. Apps created by Microsoft Partners, like Advanced Project Management (APM) by To-Increase. Read our case study of implementing Finance & Operations alongside APM.

What Kind of Support is Available for AX and Dynamics 365?

Microsoft mainstream support has ended for all Dynamics AX versions. However, for AX 2012 R3, you can purchase Extended Support from Microsoft. You can also get support from a Dynamics Partner. Learn more about Dynamics AX support options.

Customers on Dynamics 365 Finance & Operations get full Microsoft Support and can have further Dynamics Partner support.

Security & Stability

Is Dynamics 365 or Dynamics AX Better for Disaster Recovery?

Dynamics 365 is better than AX for disaster recovery.

For Dynamics AX, disaster recovery is not built in. And whether your servers are in your own building or at the building of a hosting company, a physical disaster like a fire can cause a data disaster like loss of customer records.

For Dynamics 365, disaster recovery is built in to your Microsoft Azure hosting. You get near real-time recovery capabilities in your production environments.

However, please note that the length of time that Azure D365 backups are preserved is controlled by Microsoft. Azure backups for D365 go back 28 days for your production environment and 7 days for sandbox. If you need backups further into the past, you will have to export them manually and store them in your Lifecycle Services asset library (the sysadmin management console for Finance & Operations).

Is Dynamics 365 or Dynamics AX Better for Cybersecurity?

Dynamics 365 is much better than AX for cybersecurity.

If you’re on AX, even if you’re the most secure company in the world, your SQL and Windows 2008 Servers are no longer getting patched by Microsoft. This leaves you vulnerable to cyberattacks and can also create major compliance problems.

By contrast, on Dynamics 365, you are protected by Microsoft’s billion-dollar investment in Azure security. It’s the best data security a business can have.

Dynamics 365 customers still need to take steps like multi-factor authentication to secure their tenants. Encore provides a cybersecurity package called Encore Umbrella. There are different tiers of this package which can secure your tenant for Dynamics 365, Office 365, or AX.

What’s the Best Path Forward for Your ERP?

Changes to your ERP are major business decisions. You need an experienced partner to guide a smooth, effective, and ultimately successful change at the right time for your business.

Learn more about AX to D365 upgrades.

If you have questions about the best path forward for your ERP, please contact us with the form below.

*Based on the contract commitment, the per user per month price may differ from the price listed above. All pricing is subject to change without notice. Contact Encore for the most current product pricing and available contract options.

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