Microsoft is streamlining the pricing of its four Dynamics enterprise resource planning (ERP) applications families from a per-module basis to a per-user basis as a way to make it easier for partners to sell the software.
While rivals Oracle and SAP engage in a mix of direct and indirect selling of ERP applications, Microsoft relies on partners. It unveiled the new pricing just before the start of its Worldwide Partner Conference (WPC).
Instead of trying to help new Microsoft ERP customers navigate through more than 1000 different pricing options based on hundreds of modules, the software vendor's partners will start selling three standard application suites for each of its four ERP product lines as of August 1.
"For most of our customer base, the options were so finely grained, it was like going to a car dealership and having them say it's extra for floor mats," general manager of Dynamics marketing at Microsoft, James Utzschneider, said.
Under the Business Ready Licensing model, partners will sell Microsoft Dynamics Business Essentials, Dynamics Advanced Management and Dynamics Advanced Management Enterprise ERP suites for Great Plains, Navision, Axapta and Solomon.
The change in pricing was a natural extension from the company's September rebranding of its four ERP product lines under the Dynamics banner, Utzschneider said. Microsoft ultimately aimed to offer customers a single Dynamics code base beginning in 2008.
The move was less about lining up ERP offerings with those from Oracle and SAP, which were already grouped into suites, than about simplifying life for partners, Utzschneider said.
Microsoft's per-user pricing will differ from that offered by its rivals.
While Oracle and SAP provide named user pricing, Microsoft would offer concurrent user pricing, he said.
"Users really like concurrent pricing," principal analyst at Forrester Research, Ray Wang, said. "It gives them flexibility and is easier to manage."
This is particularly the case when a company using Dynamics wants users working different shifts every day to be able to access the applications.
The Dynamics suites include free online training for all users and standardises Microsoft's global ERP offerings.
In order to get its channel partners used to the per-user pricing, Microsoft will continue offering per-module based pricing for a 90-day period from August 1. Existing Dynamics ERP customers aren't affected by the new pricing model although if they wish to move to per-user pricing they have that option.