Move over NAV, the cloud is taking over

Microsoft takes another step toward fully cloud accounting

This week, Microsoft’s cloud accounting solution for growing businesses is taking over its predecessor, if only in name. As of Oct. 1, Dynamics NAV will officially be referred to as the on-premise version of Dynamics 365 Business Central.

At first glance, it might be easy to shrug off this news as just another name change, but the significance of this decision cannot be overlooked. Microsoft’s world-renowned Enterprise Resource Planning (ERP) solution has just been relegated to the “on-premise version” of its newer alter ego, the cloud ERP.

It’s a small but significant step that reflects Microsoft’s not-so-subtle push toward the cloud. As cloud technology moves from trendy to mainstream, the software giant has stepped onto the field of accounting software solutions with a formidable weapon.

The competition is fierce — Sage Intacct and NetSuite have already established themselves in the world of cloud-enabled ERP products — but Microsoft is quickly gaining ground.

Microsoft didn’t release Dynamics 365, its first Software as a Service (SaaS) accounting solution, until the fall of 2016. At the time, Dynamics 365 vaguely resembled Dynamics NAV, one of the company’s top-of-the-line on-premise accounting solutions, but the new offering didn’t quite have all the capabilities of the powerhouse ERP.

Dynamics 365 received a major upgrade this spring, giving it the same capabilities as its predecessor with the bonus of being a cloud ERP solution deployed on the company’s fast-growing Azure platform. With the latest change Oct. 1, Dynamics 365 moves to the forefront.

Building the Cloud

Accounting software is not Microsoft’s first step into cloud computing. Back in 2006 when Amazon started turning heads as a pioneer of cloud services, Microsoft was already quietly working on a similar project of its own.

Windows Azure launched in 2010 as the company’s first cloud computing platform but did poorly. Four years and several revisions later, the renamed Microsoft Azure started gaining traction. Now, Azure’s revenue is growing rapidly every quarter and has skyrocketed Microsoft into the cloud wars as one of the top five cloud providers.

As of April 2018, Microsoft held a 13 percent market share of cloud infrastructure, a significant growth that shows no sign of slowing down. If anyone doubted Microsoft’s ability to move from a computer and packaged software company, those doubts are long gone.

Microsoft’s shift in focus from on-premise ERP to cloud ERP is just the latest in a concerted effort to become a fully integrated business cloud solution. Microsoft CEO Satya Nadella started using the phrase “mobile first, cloud first” almost immediately when he took control of the company in 2014, and the company has worked tirelessly to make the slogan reality.

Dynamics 365 reflects multiple integration points with other Microsoft cloud products, further enhancing the allure of the newest offering. Dynamics 365 works seamlessly with such well-known products as Cortana, LinkedIn, Outlook, Office 365 and Power BI.

Cloud-ready Options for GP and SL

While on-premise ERP solutions might be fading in popularity, Microsoft is fully aware that some businesses are simply not ready to take the plunge into cloud accounting. The company’s Dynamics GP and SL solutions, for example, have withstood the test of time and kept their place among cloud ERP solutions on the market.

Microsoft intends to continue supporting both products, with one key caveat. The company is now offering cloud-ready solutions for its current GP and SL clients. An Azure-based offering lets on-premise customers of both products continue using their current platform in a hybrid form. They can now deploy a cloud-replicated version of their data, test for errors and make the move to the cloud seamlessly whenever they’re ready.

Similarly, current users of Dynamics NAV (now Dynamics 365 Business Central on premise) can opt to move to the cloud version with a simple upgrade. In other words, move over on premise and make way for Microsoft cloud ERP!