Dynamics NAV Licensing Demystified

Microsoft Dynamics NAV has various kinds of licenses, and they can be purchased in different ways.  In order to run Dynamics NAV, you will need to purchase 1) a “solution functionality” license, 2) multiple “user” licenses, and 3) other “various” licenses. For the most part, these can be purchased in two ways: 1) perpetual or 2) subscription.

Perpetual vs Subscription

When you purchase perpetual licencing, you are reserving the right to use Dynamics NAV ad infinitum, or for however long you like. You buy the licenses, and they’re yours to keep.  This results in a larger upfront transaction.

When you purchase subscription licensing, you are only able to use Dynamics NAV on a monthly basis (or other term length, monthly is the minimum). You are renting the right to use the software, like a SaaS. This results in lower recurring transactions until you decide not to use Dynamics NAV anymore.

It is your choice as to which of the above you want to purchase. Keep these definitions in mind as we progress.

Dynamics NAV Perpetual Licensing

Perpetual “Solution Functionality” Licensing

When buying perpetually, the first thing you need to do is purchase the right to use the software for your entire company.

In order to do this, you buy something called the Dynamics NAV Starter Pack. This includes the basic functionality of Dynamics NAV.  If you need additional manufacturing, CRM, warehouse, or financial capabilities, you need to purchase the Dynamics NAV Extended functionality license, which costs extra. These are both a one time purchase.

Perpetual “User” Licensing for Dynamics NAV

Now that you’ve purchased the right to use Dynamics NAV, you need to get licenses so your users can access the application. These are also one time purchases. The Starter Pack includes three full users, but you can get more if you need them:

  • Full Users: These users have access to everything inside of Dynamics NAV.
  • Limited Users: These users are only really able to view things in Dynamics NAV. They can also “write” to a limited number of databases.

When you purchase your user licenses on the perpetual model, you buy something called “Concurrent Access Licenses” (CAL).  This means that if you purchase three licenses, only three people can access Dynamics NAV at the same time (or concurrently), but you could have many people authorized to access Dynamics at different times.

For instance, you could authorize your CEO, COO, Controller, and your entire accounting team to access Dynamics NAV, but their ability to be logged in to Dynamics NAV at the same time depends on the number of CALs you own.

Now that you’ve bought perpetually, you are required to pay a yearly enhancement fee to Microsoft.  This amount varies.

Dynamics NAV Subscription Licensing

Dynamics NAV Subscription Licensing is a little more simple.  Your license to the “solution functionality” and your “user” licenses are combined.  There are three kinds of Subscription Access Licenses (or SALs):

  • Full Users: These users have access to everything in Dynamics NAV included in the above-mentioned “starter pack”. Cost: $99/User/Month
  • Extended Additive: Think of this as a “power-up” for your full users that allows them access to the also above-mentioned manufacturing, CRM, warehouse, or financial capabilities.  If you want to purchase these, you need to purchase one for every full user. Cost: $19/User/Month.
  • Limited: These users are only really able to view things in Dynamics NAV. They can also “write” to a limited number of databases. Cost: $9/User/Month.

Other Various Licenses

There are a few more licenses you’ll need to consider.  These various licenses fall in to two categories: Add-ons and Infrastructure.

Add-on Licenses

You may find that the functionality of Microsoft Dynamics NAV needs to be extended in order to meet all of your needs.  This is done through add-on products that have been developed by Microsoft’s partners.  For instance, Microsoft Dynamics NAV needs an add-on to do payroll.  In order to get payroll in Dynamics NAV, you need to purchase an add-on solution through your Microsoft partner.  These licenses may be monthly, or an up-front cost.

Infrastructure Licenses

Microsoft Dynamics NAV runs on top of several databases and servers.  You must purchase licenses for these in order to run Dynamics NAV properly.  This may include Windows Server Licenses, SQL Server Licenses, Sharepoint licenses, etc.

If you want to run your Microsoft Dynamics NAV in the cloud, Encore has efficiently bundled these Infrastructure licenses to cost $49/User/Month.

Summary

In summary, there are three kinds of user licenses that can be purchased: Full, Extended, and Limited.  These three kinds of user licenses can be purchased two different ways: as Concurrent Access Licenses (CAL) or Subscription Access Licenses (SAL).  In addition, you need licenses for other software that Dynamics NAV requires to run.  For more information see the NAV 2015 licensing guide or the Dynamics NAV License Terms.

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