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Anya Ciecierski, CAL Business Solutions

Microsoft Dynamics GP Price Rising Oct 2012 – How To Be “Grandfathered In” At Lower Cost


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Microsoft Dynamics GP 2013 is scheduled to be released in December 2012.  With it comes an entirely new pricing model for Dynamics GP called Perpetual Licensing.  Companies who buy Dynamics GP BEFORE October 1, 2012 will be considered existing customers.  There are 3 areas in which this will be valuable: Minimum User Count, Protected List Price, and Transition Upgrade Options.

1)  Minimum User Count

Under the current Business Ready Licensing model, companies can buy just 1 user of Microsoft Dynamics GP for $2,250 (Business Essentials Edition) or $3,980 (Advanced Management Edition). This is not just for small companies. (For example, our company works with many good size VNA firms using Dynamics GP who only need one or two GP licenses as all the rest of their operations are run by a healthcare-specific software that integrates with Dynamics GP.)

With the new Microsoft Dynamics GP pricing models customers must purchase a minimum of THREE concurrent users. The price for three users, which are included in the new “Starter Pack”, is currently announced as $5,000. Additional users are set to cost $3,000 each for a full user, or $600 for a limited user. There is a one time fee of $10,000 for the “Extended Pack” which gives additional functionality. Review what functionality is included in Dynamics GP Starter Pack and Extended Pack.In other words, until GP 2013 is released a company can still buy 1 user of Dynamics GP for $2, 250 instead of $5,000. Or if you want the full Advanced Management Functionality you could pay $3,980 now for one user versus $15,000 in the new system!

Even better, if you buy just ONE user before 10/1/2012, you will automatically be upgraded at NO COST to THREE users when you upgrade to Dynamics GP 2013. That is about a 55% savings.
2)  Protected List Price

In the scenario above, if you purchase one Dynamics GP user before 10/1/2012 you can upgrade to the three users at no cost AND you keep a protected system list price equal to your original purchase price. This means that your annual enhancement fee, which is calculated on your Protected List Price, will not increase.

But, for example, if you buy one Business Essentials user after 10/1/2012 you will pay $2,750 when you want to upgrade to Dynamics GP 2013, so that you can get up to the new minimum of three users.  You will have a new system list price. This will increase your annual enhancement fee. It is not protected.

But Microsoft will not force you to upgrade. While you will lose out on the new functionality if you want to just keep your one user and not pay anything additional, you can certainly do that.

This is explained in more detail in point 3.

3)  Transition Upgrade Versus Credit Upgrade

If you purchase Microsoft Dynamics GP BEFORE October 1, 2012 and are active on your enhancement plan you can take advantage of the License Migration Transition Upgrade. Whenever you choose to upgrade to Dynamics GP 2013 (even if that is years after the release) Microsoft will map your existing license configuration to an equivalent OR SUPERIOR new license configuration. Cost is not an issue. You will get everything you currently have, and sometimes more.

For example: Customer purchased Microsoft Dynamics GP BEFORE 10/1/12

Scenario 1:
Currently own: 1 concurrent Business Essentials user license (value $2,250)
With GP 2013 upgrade will own: Starter pack with 3 concurrent user licenses (value $5,000)
Balance Owed: $0

Scenario 2:
Currently own: 1 concurrent Advanced Management user license (value $3,980)
With GP 2013 upgrade will own: Starter pack with 3 concurrent user licenses and Extended Pack (value $15,000)
Balance Owed: $0

Scenario 3:
Currently own: Payroll for 1-100 employees
With GP 2013 upgrade will own: Payroll for unlimited employees
Balance Owed: $0

Scenario 4:
Currently own: Integration manager (value $5,000)
With GP 2013 upgrade will own: Customization Pack (value $10,000)
Balance Owed: $0

Scenario 5:
Currently Own: 10 concurrent Business Essentials user licenses (value $22,500)
With GP 2013 will get: Starter Pack plus 7 Additional Full Licenses ($26,000)
Balance Owed: $0

Scenario 6:
Currently Own: 12 concurrent Advanced Management user licenses (value $46,960)
With GP 2013 you will own: Starter Pack, Extended Pack plus 7 Additional Full Licenses ($42,000)
Balance Owed: $0

In each of these scenarios, with the License Model Transition Upgrade your system list price is protected and your annual Microsoft enhancement fee will not increase.

The new Perpetual Pricing plan has many modules bundled for simplicity. If you are an existing customer before 10/1/2012 then as long as you own just ONE piece included in a bundle, you get the whole bundle at no cost. But don’t forget, all of this is contingent on you being active and up to date on your Microsoft enhancement plan! Without that, all bets are off.

What if you buy Microsoft Dynamics GP 2010 AFTER October 1, 2012 but before the release of Dynamics GP 2013 (scheduled for December 2012)? You are still an existing customer but WITHOUT the perks. You would not get the license migration transition upgrade explained above. You would get the less desirable License Credit Transition Upgrade.
This means you won’t get an even exchange or superior license upgrade. You will get a monetary credit for your upgrade equal to your System List Price. And you have to pay any balance for the new licensing.

For example: Customer purchased Microsoft Dynamics GP AFTER 10/1/12 but before release of Perpetual Licensing.

Scenario 1:
Currently own: 1 concurrent Business Essentials user license (value $2,250)
With GP 2013 upgrade you will need to buy: Starter pack with 3 concurrent user licenses (value $5,000).
Balance Owed: $2,750

Scenario 2:
Currently own: 1 concurrent Advanced Management user license (value $3,980)
With GP 2013 upgrade you will need to buy: Starter pack with 3 concurrent user licenses ($5,000) plus the Extended Pack ($10,000. (Note: You will only need the Extended Pack if there is some advanced functionality you require that is not now included in the Starter Pack. Many former Advanced Management only modules will be included in the starter pack.)
Balance Owed: $11,020

Scenario 3:
Currently own: Payroll for 1-100 employees
With GP 2013 upgrade will own: Payroll for unlimited employees
Balance Owed: $0

Scenario 4:
Currently own: Integration manager (value $5,000)
With GP 2013 will need to buy: Customization Pack (value $10,000)
Balance Owed: $5,000

Scenario 5:
Currently Own: 10 concurrent Business Essentials user licenses (value $22,500)
With GP 2013 will need to get: Starter Pack plus 7 Additional Full Licenses ($26,000)
Balance Owed: $3,500

Scenario 6:
Currently Own: 12 concurrent Advanced Management user licenses (value $46,960)
With GP 2013 will need to get: Starter Pack, Extended Pack plus 7 Additional Full Licenses ($42,000)
Balance Owed: $0

In each of these scenarios, with the License Credit Transition Upgrade your system list price will increase based on the balance you pay, and your annual Microsoft enhancement fee will increase.

We didn’t discuss Lite Users and Limited users in this post because that is a whole different confusing ball of wax that we will discuss in a later post.

The new perpetual pricing model for Dynamics GP 2013 will indeed be simpler. But in this transition period, especially between now and October 1, 2012, it does seems more complicated. I have gathered this information from various Microsoft sources and tried to present it in a clear and understandable way, but I can’t make any guarantee that I got it all correct. And Microsoft could always decide to change their pricing prior to the release of Dynamics 2013, although that seems unlikely.

This is my advice to you:

1) If you are considering upgrading your ERP/accounting software, add Microsoft Dynamics GP to your short list.
2) Request a free automated Microsoft Dynamics GP Quick Quote to get an estimate of what your license cost would be right now.
3) Call a Microsoft Dynamics GP partner, like CAL Business Solutions, well before 10/1/2012 and ask them to walk you through the different pricing options and deadlines based on your specific scenario. They can help you figure out how to save the most money.

See our related post: Simplified Pricing for Microsoft Dynamics GP Coming Soon

By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner

One Response to “Microsoft Dynamics GP Price Rising Oct 2012 – How To Be “Grandfathered In” At Lower Cost”

  1. Steve Dwyer says:

    Anya – incredible research, thanks for stepping us through the analysis of all of the available Client options!