Microsoft to drop margins on Dynamics ERP, CRM perpetual licenses

This article was updated on November 14 with perspective from Microsoft in response to

questions from MSDW .

Microsoft is planning new Dynamics initiatives aimed at encouraging the embrace of Dynamics 365 in the public cloud by partners and customers.

In one recent move, the company announced that reseller margins for perpetual licenses for Dynamics 365 Business Central, NAV, GP, and SL, as well as CRM/Customer Engagement will be decreasing in 2020. Details are available in PartnerSource and other Microsoft sources, partners have confirmed.

The decrease in discounts will be 10% for each discount tier, so absolute decrease will vary depending on a partner's tier, but it . For example, a reseller that is buying Dynamics NAV or Business Central perpetual licenses for $55 today could begin paying at best $65 on April 1, 2020.

Microsoft general manager Toby Bowers explained more about the change and the FY20 incentives:

Partner incentives support Microsoft’s strategy by sending financial signals to our partner community about which sales motions and products to emphasize. In recent years, incentives for Dynamics have shifted gradually from on-premise licenses to cloud services. Last fiscal, Microsoft lowered the new license discount rates by 10% for Dynamics AX sold via DPL/the SPA channel globally (except for customers located in China, India and Russia). As part of the FY20 incentive program refresh, we continue this journey by reducing the new license discount rates for Dynamics NAV, BC, GP, SL and CE/CRM globally. As such, the new license discount rates for Dynamics NAV, BC, GP, SL, CE/CRM and AX (with the exception for AX customers in China) will be aligned on April 1, 2020. 

And Bowers explained that additional incentives for online customer adds and Dynamics on-prem to cloud migrations have been introduced: