Microsoft streamlines pricing for Dynamics

NEW DELHI

JULY 11, 2006

In a bid to lower down the entry barrier in deploying enterprise resource
planning (ERP) solutions and increasing ERP proliferation, Microsoft has
announced business ready licensing model, which streamlines pricing for
Microsoft Dynamics solutions.

The Dynamics portfolio in India comprises a suite of ERP and customer
relationship management (CRM) offerings including Microsoft Dynamics AX,
Microsoft Dynamics GP, Microsoft Dynamics NAV and Microsoft Dynamics SL.

With the new licensing model, Microsoft has moved from a pricing model based
on hundreds of modules and granules to a new model based primarily on the number
of concurrent users who actually use the software.

Elaborating on the model, Microsoft Dynamics business group lead Sushant
Dwivedy said, “This new model has three simple offerings: Microsoft Dynamics
Business Essentials, Microsoft Dynamics Advanced Management and Microsoft
Dynamics Advanced Management Enterprise. They are based primarily on common
functionality and represent a price reduction for a typical entry-level
configuration. We have moved from a pricing model based on hundred of modules
and granules to a new model based primarily on the number of concurrent users
who actually use the software. We have taken a marginal increase in the user
price but we brought the functionality price to zero.”

Simplified licensing model for partners and customers and at the same time
has made it more attractive for organization to deploy ERP more profusely. Apart
from benefiting large enterprise, the revamped pricing for Dynamics is also
expected to benefit mid-sized companies who are expanding fast to multiple
locations.

Business Ready Licensing Plan is available for Microsoft Dynamics GP,
Microsoft Dynamics AX, Microsoft Dynamics NAV and Microsoft Dynamics SL and will
be available to purchase worldwide August 1, 2006. The price for Microsoft
Dynamics Business Essentials will start at Rs 68,750. For the existing customers
of Dynamics, there would be a transition fee that would be applicable for them
in order to move across to the new licensing.

Microsoft Dynamics currently has an installed base of over 450 customers in
India. Dwivedy said, “More than half of these have been added in the last 12
months and these customers cut across industry segments. When we look at the
licensing model, it has to fulfill and meet the requirement of each these
segments. Large enterprises have deployed some ERP, but a big issue that still
remains is the level of deployment and whether they have fully automated across
the organization. Companies have gone ahead and deployed ERP at the hub. But
when you get down to the subsidiary level or at the plant level, the automation
has not really been there. Through the new licensing model, this is one big
chunk that we want to go ahead and address.”

Currently, Microsoft Dynamics has over 65 partners and the company is
training up its partners on rapid implementation methodology (RIM). Dwivedy
said, “While we are making pricing more attractive for all customer groups, at
the same time if partners are able to bring down the implementation time, it
becomes a huge benefit to the customer. So RIM would also help partners deploy
solutions faster for the customers and adding more value. RIM can cut down the
time to 1/3 of the deployment time it used to take earlier.”

According to Dwivedy, the channel partners are also very excited with this
new licensing model. Director of one of its partners Headstart Consulting Punit
Kapoor said, “Implementing the user-based pricing is the right step by
Microsoft. This is well suited for geographically dispersed holding companies in
India, where it is sometimes impossible to work with a single database due to a
lack of stable communication links. Now businesses have an opportunity to take
advantage of Microsoft Dynamics in remote offices, lowering the total cost of
ownership and supporting a superior ROI.”

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