Wednesday, February 25, 2015
Microsoft has discontinued support for Dynamics NAV 2009 and earlier versions. This move pushed many customers to upgrade their Dynamics NAV solutions and rethink strategies for ongoing solution maintenance. However, there are a number of customers that have lapsed from Business Ready Enhancement Plans (BREP) and lost the opportunity for future upgrades and solution maintenance from Microsoft. From a partner’s perspective, such customers are at the highest risk of being lost.
The Awkward BREP Lapse
Microsoft Dynamics NAV customers need to be enrolled in a BREP in order to make additional license purchases, such as adding modules and/or users. Having a current BREP entitles customers to upgrade to newer versions of the product, service packs and hot fixes. Enrollment in the plan gives customers access to enhanced functionality and innovative technologies.
However, there are a number of customers that are lapsed from BREP and they have become a big headache for partners. Unofficial statistics: in some Eastern European countries, the number of customers not on BREP reaches up to 60% of Dynamics NAV Partner’s total customer base.
If a customer has lapsed from BREP, he/she loses an opportunity to make additional license purchases. In order to get back on a BREP plan, the customer needs to back pay BREP for up to three years, if BREP was not paid for 3 or more years, in addition to paying one year in advance. There is a very simple calculation for this repayment, as the BREP fee is 16% of the licensing value, for 4 years it becomes 64% of the total licensing value. As you can imagine, this becomes a huge investment for most customers.
This circumstance puts customers in a serious and awkward situation, as they cannot take advantage of the new technologies without investing in the reenrollment to BREP. This presents a challenge to the Partners of these customers, as it is well-known that disappointed customers and customers on outdated solutions are those most easily lost, especially in the current intense competition with Cloud ERP solutions that offers low entrance and maintenance cost.
What are you, as a Partner, going to do about this large pool of at risk customers?
Strategies to Preserve High Risk NAV Customers
In some situations, BREP lapsed customers might find purchasing new Dynamics NAV subscription licenses (especially if they take advantage of Microsoft’s new NAV subscription licenses promotion) economically beneficial to avoid the expensive BREP back pay situation.
Customers can purchase subscription licenses for Dynamics NAV (for EUR 50* per-user-per-month for a standard license; without any back pay or start-up fees) that enables them to generate new Dynamics NAV licenses on the latest Dynamics NAV version to upgrade their solution. Luckily, the BREP benefits are embedded into the Dynamics NAV subscription license price.
This might be an attractive solution for your BREP lapsed customers on retired versions of Dynamics NAV no longer supported by Microsoft. Take this opportunity to evaluate your existing customer base. Who are your most problematic BREP lapsed customers? Can they be converted to new opportunities with this new NAV subscription licensing to produce a healthier existing customers base?
Determine the Best BREP Lapse Solution
There are two options for BREP lapsed customers to be entitled to advantages that new Dynamics NAV versions provide:
- Reenroll in a BREP: long-term this may be more beneficial when compared to the option of purchasing new subscription licenses. Note that Microsoft sometimes offers amnesty programs or discounts for lapsed plan renewals.
- Purchase new NAV on subscription licenses: that includes BREP benefits for as long as the customer uses/pays for the licenses.
The only way to understand which option is most cost effective for your customer is to dive into a detailed calculation to determine whether the BREP back pay or subscription license is the best solution for each customer’s specific scenario.
Either way, with an upgrade strategy in place and effective support, Dynamics NAV customers gain year-over-year benefits on their solution. Talk with your customers, your main focus as a Partner should be on the return on investment your customers receive from the new features and technologies of upgrading, not just on the alternatives for cost saving on their solution maintenance.
Author of the post: our former Managing Director of 1ClickFactory NEE Žaneta Čalkienė .