You’ve spent a significant amount of money, time, and resources on Microsoft Dynamics AX 2012 R3. It’s vitally important to protect your investment in this business-critical ERP system. With Microsoft announcing AX 2012 R3 Mainstream Support End of Life scheduled for October 2021, time is running out quickly and the questions are piling up:
- Should I renew my Dynamics AX 2012 Enhancement plan, or let it lapse?
- How much would it cost to upgrade to Dynamics 365?
- We’re not ready to move AX to the cloud – what are our options?
- Can we “right-size” our spending on Dynamics 365 licenses?
- This all seems very complicated – I have a lot of other questions. Who can I talk to about this?
Stoneridge Software can help answer these questions and any others that you may have.
The Support Lifecycle end dates for Dynamics AX depend on which version you are currently running.
- Dynamics AX 2012 R2 Mainstream Support ended in 2018 and Extended Support is ending in October 2021
- Dynamics AX 2012 R3 Mainstream Support ends in October 2021 and Extended Support ends in 2023
Below is critical information to consider as you weigh options with AX 2012’s End of Life.
To renew or not renew?
The Microsoft Dynamics enhancement plan traditionally offers many benefits such as patches, hot fixes, tax updates, and upgrade rights vital for maintaining an ERP implementation. With mainstream support ending for AX 2012 R3 this October 2021, most of these benefits will expire, leading many customers considering the future of their ERP.
Protecting your investment
Another benefit of AX 2012 enhancements is customers active on plan qualify for 40% or more in discounted transition pricing when upgrading to Dynamics 365 (D365). Let’s review some cost scenarios, using a hypothetical example that assumes the following base license:
Scenario 1: Renew & Delay
If a transition to Dynamics 365 today is out of the question, one option is to simply renew your enhancement plan for another year. The rate is 16% of your total system list price (e.g., in this example, the retail cost is $15,920). The main advantage is this scenario buys you more time to consider your transition options. It’s important to remember that Microsoft requires customers to repurchase their licenses at 100% of then-current pricing if they want to get back on plan or upgrade after lapsing. So even if you’re not ready for an upgrade to Dynamics 365 today, consider remaining active on enhancements to give yourself time to evaluate the long-term savings of a future transition. If ongoing support for AX is a concern, Stoneridge Software likely has a separate support plan to cover your needs.
Scenario 2: Transition to D365 On-Premises
In this scenario, customers receive a license investment credit equivalent to 100% of their Protected List Price (PLP) for their licensed users and/or functionality. If the license credit does not meet the entirety of the licensing cost of the desired configuration, the customer will need to pay for the incremental license cost. The table below shows how the AX 2012 user licenses map to D365 user licenses on the transition.
Notice that a D365 Operations Activity user can map to either an AX Functional or Task user. During the transition, you have the option to downgrade users to lower-level licenses to help “right-size” your costs, such as downgrading Task users to Team Members. In this example, assume the customer chooses to convert all AX users to equivalent D365 users, which increases the total list price to $139,000:
Their enhancements also increase to $22,240 per year, and the additional cost for the license transition is $39,500 paid up-front. The customer managed to save over 70% in normal retail costs because they qualified for discounted transition pricing by being active on AX 2012 enhancements.
Scenario 3: Transition to D365 Online
In this scenario, customers active on AX 2012 enhancements qualify for a 40% discount on transition prices. During the transition, customers have the option to “right-size” their costs by downgrading users to lower-level licenses, such as downgrading Task users to Team Members. See the map in the table below:
In this example, assume the customer chooses to convert all AX users to equivalent F&O users, and also maps all the Finance users to Supply Chain Management (using the “attach” license), which results in a new annual cost of $40,320:
After the transition, the annual cost for the F&O service is higher compared to the customer’s previous annual cost for AX 2012 enhancements, but remember the new cost includes ongoing Dynamics 365 licensing rights.
On-premises or cloud?
It’s okay if you’re not ready to migrate to the cloud in a Microsoft-hosted data center today. Microsoft offers flexible options for customers who may prefer to transition to D365 Finance and Supply Chain Management licensed in the cloud, but still run AX 2012 on-premises. This is allowed through the Dynamics 365 “downgrade” and “dual-use” rights benefits. This means D365 customers can ask Microsoft or their Partner of Record to provide downgraded licensing keys for AX 2012 on-premise. In effect, you are then running in a “hybrid” mode – provisioned in the cloud but using on-premises. The best of both worlds. This keeps you active on a Dynamics 365 service plan while allowing you to migrate fully to the cloud when you’re ready.
If an AX 2012 customer chooses to lapse, Microsoft will require 100% repurchase based on then-current D365 licensing costs to get back on a service plan. Continuing our hypothetical example, the following table shows the total estimated retail costs for repurchasing D365 on-premise or F&O online compared with the transition Scenarios 2 and 3 discussed above:
As you can see, in this example the 5-year total cost of ownership is ~25% less for customers who remain active on AX 2012 enhancements and transition either to Dynamics 365 on-premise or online.
Planning for success
As a trusted advisor for hundreds of Microsoft Dynamics customers, our seasoned experts can help you thoughtfully plan your smooth transition from AX 2012 to Dynamics 365. Time is running out quickly with AX 2012 R3’s Mainstream Support End of Life scheduled for October 2021. Reach out to Stoneridge Software anytime to explore next steps based on your unique situation.