"Per User" Pricing model is coming...

Microsoft has finally made the big switch to a “per user” pricing model instead of the “granular” approach here in the US. This is supposed to help in competition and comparisons against “SAP Business One” and “Oracle eBusiness Suite Special Edition”. Now this is a real change here in the US as Europe already has adopted this model. The announcement is to take place at the partner conference in Boston in July. No announcement has been made on how this effects existing Dynamics clients. See the story… http://www.crn.com/showArticle.jhtml?articleId=181500828

So does this mean that the customer gets the full suite of Navision? Even access to the solution develper?

Hi In Europe the User Based Pricing (UBP) has restrictions on the granules you get (no manufacturing I believe among others) and you are limited to 10 users (I think) and after this you need to buy the full license. I cannot remember the specifics but it has certainly helped competition at the lower end of the marketplace. However this maybe completely different in the US [:D]

That’s sold as (I think) the Dynamics NAV Standard Edition, this is something different.

Yes, there is no restriction on the number of users you license in the UBP price model. You get most of the base moduls (as well as the basic Design Tools), as well as a lot of other stuff with it.

In the UK the UBP model has indeed been referred to as “standard” in the past, but was re-branded to UBP as “standard” confused the hell out of everyone [:D]. With this model there are many granules not included, BACs, SKU’s, Location Transfers, Multiple Languages, Return Orders, Consolidation, and the list goes on, so it is a cut down version of the license. I have a full list of those available and those not if you are really interested, or it is available on partnersource (UK anyway) and probably customersource (but I will not guarantee it[:D]). Daniel is correct there is no restriction on UBP licenses, unsure where I have this conception from, a previous incarnation of it probably! The idea of UBP was to increase the attractiveness in the lower mid-market and small businesses. This was available from November 2004 for the UK (and Europe I presume). Essentially you purchase “sessions” whilst the application functionality follows with no additional cost.

Sorry for the ignorance, but perhaps you could share some arguments why the UBP model did help to sell, especially at the lower end segment. Of course the pricing model will be much easier to handle and you simply ask the prospect on the quantity of users and you can tell him the license price. That will make the pricing much easier, and you wouldn’t need a full functional course and a year experience to fill out the current pricing worksheets… But on the other hand he might get functionality that he will never use, and customers usually don’t like to pay for something that they won’t use. How is the price relation of 1 user in the UBP model, compared to the normal “granule” model? That would be something that would interest me a lot… Thanks & Saludos Nils

Here, the price for one UBP-User is 6224 C/Shells for every concurrent user (normal - NAV Professional - users cost around 4000 C/Shells depending on how many you license). From what I remember, you get Functionality for around 40000 C/Shells. So for smaller clients, that need a lot of functionality it pays off. You will have to calculate, if UBP is cheaper or not depending on what the client needs.

Thanks Dani, in fact, that makes a lot of sense, around 6200 C/Shells compared to 4000 C/Shells for a user session, that’s a very interesting option for small and even mid sized companies. Very, very interesting, let’s hope this maintain somehow this price ratio for the new price lists… Saludos Nils

Actually there was a UBP scheme available in the UK as far back as 2001, but it was not generally public. It was originally introduced to make it possible for NSCs to sell Navision as a Hosted solution. In this case the NSC would have the server on their site, and the clients would use CItrix or Terminal server to access, and would never bother with anything except the Citrix client (and printing of course). In these environments, the client is quoted a price based on dollars per user per year. I think though that that whole scheme vanished. At the end of the day though, I see this as something like apying for Database. I beleive that for th ecleint paying for Databse was a fairer way of pricing the software, since smaller clients paid less. But it was always hard to explain it to a cleint, since they always saw it as differnt to everyone else. What Micrisoft are say here, is that we need cleints to be able to do a straight out comparison of the cost of Base software, so that the decision to buy is then based on the product and the VAR rather than some complex pricing structure. If you look back at installs based on DB vs Users, you will see that in the end the average cost is the same. I think this will be the case here, the average system price will be about the same, revenue will be about the same, but there will be a different distribution. One good thing this time is the 90 days notice. I am sure I am not the only person that got done over by Navision when they introduced the Database for free bit. In my case I has a client that ordered 1G db the week before the anouncement, but Navision were slow on delivering licenses that week. After the anouncement, we had not received the licence, and Navision sent a letter (mass mailing) to the client to anounce the new free db policy. The client was very happy, so cancelled the order. But it turns out that Navision had cut the license, just “forgot” to deliver it to us, which they did ONE WEEK AFTER the announcment. The client refused to pay (logically) but I (as an NSC) was forced to pay Navision. I am thinking that right now with the special offer on users, buy up now.

I think the UPB model was introduced to beat up “SAP one” or whatever they called it those days. They had a UBP and Microsoft just wanted to have a cheaper solution. Just for your information: There is an even cheaper user pricing available in conjuction with a retail solution. When buying a Navision based retail solution, you get the user for 1500 c/Shells ( plus the portion of the developer of the AddOn, also 1500 c/Shells in our case), so a total of 3000 c/Shells. Additional discounts can apply (10 Users: -15%, 25 Users: -25%, 50 Users: -35%, 100 Users: -45%, …) This makes Navision more attractive to customers with a small backoffice portion and a bigger frontoffice part.