Dynamics 365 Business Central vs Dynamics NAV: Key Differences

microsoft dynamics business central
On 6 July 2018 Microsoft Dynamics 365 Business Central will be available in New Zealand. What does this mean for New Zealand organisations already using Microsoft Dynamics NAV, or looking to make the shift?

Building on my previous blog on Microsoft Dynamics 365 “Tenerife” this post will update you on what has changed, and what it could mean for you. I’ve had many questions recently about the future of Microsoft Dynamics NAV and there’s definitely great interest in Microsoft Dynamics 365 Business Central. Hopefully, this post will answer most of your questions.

New name, new product?

Obviously, NAV has a new name, but this doesn’t mean a totally new product. Technically, Microsoft Dynamics 365 Business Central is version 12 of Microsoft Dynamics NAV and would normally have the name Microsoft Dynamics NAV 2019. However, Microsoft has decided it is time for a name change to reflect the central embedment in the Office 365 offering in the cloud.

Microsoft Dynamics 365 Business Central

OK, so Microsoft Dynamics 365 Business Central is Microsoft Dynamics NAV with all its functionality but just one version up. Is there really no general difference between them? Microsoft Dynamics 365 Business Central is a new version with new features, but in general it is Microsoft Dynamics NAV as we know it, with all its 31 years of heritage. The main differences are:

  • Microsoft Dynamics 365 Business Central will be a full SaaS solution, available in the web client (browser) and the universal app (tablet/phone).
  • It has a different subscription price including hosting and automatic monthly upgrades.
  • Individual customisations are still possible, but in a more restricted way.

Only in the cloud?

Does this mean that Microsoft Dynamics NAV is only available as a SaaS offering in the cloud from 6 July 2018? No! Microsoft Dynamics NAV will continue to be available as an on premises solution with the existing two license options (perpetual and subscription license).

Why then have two names for the same product? Well, the on premises version is still version 11, i.e. Microsoft Dynamics NAV 2018, but from October 2018 onwards both on premises and cloud versions will be based on the same code base and the name Microsoft Dynamics 365 Business Central will be used for both platform offerings.

What are the differences between the cloud (subscription) and on premises (perpetual) versions?


Microsoft Dynamics NAV has the Windows Client (installed on your desktop) as well.


The license model for Microsoft Dynamics NAV was always easy to explain. The Starter Pack includes three full users. Then you can add users - full users or limited users. If you also need full warehouse management, service management, manufacturing or inter-company functionality, then you need to buy the Extended Pack as well. This will all be the same for the perpetual license.

In principal the subscription model of Microsoft Dynamics NAV is the same, except that users are named users instead of concurrent users. However, Microsoft Dynamics 365 Business Central doesn’t just cover the use of the software with the subscription but also includes hosting and monthly, automatic updates by Microsoft. Microsoft PowerApps and Microsoft Flow are also included.

But wait, there is more! The names of the two different license packs (starter/extended) have also been aligned to the Office 365 names. They are now called Essential and Premium. Even better, the Essential license option includes full warehouse management and inter-company functionality. So in other words, the Premium option is only required if you need manufacturing or service management.

Limited User vs Team Member

The Limited User is replaced by the Team Member. Just another name change? No! The Limited User was always more complex to explain. In simple terms, the Limited User was able to read everything, write into pre-defined tables by Microsoft (~70 tables) and three additional tables per session. In plain English, read all data, create and modify limited data, and could never post anything to the G/L. The Team Member license can also read everything, but can only modify existing data. It can create limited data, for example a quote. No posting to G/L allowed either. In summary, the Team Member is a bit more restricted than the Limited User.


We had two options in the past. We could enhance the standard Microsoft Dynamics NAV functionality by adding one or many of the over 3,000 registered solutions (formerly known as add-ons). What we couldn’t achieve with a registered solution could be done by a customisation - either to make an integration work, develop a new module, establish automation or simply add a new field on a page.

So how will this work now? We still have the same options in the on premises installation, but not in the SaaS (cloud) installation. Here we must take a new path. The registered solutions are replaced with Apps from AppSource and the customisations are developed as an Extension v2.  So again new names for the same thing? No, we really go on a new path - a new development environment for a NAV developer - but not new for the world. Visual Studio Code is already three years old and is the #1 development tool for many developers. The development language has also changed from C/AL to AL, but remains a development language only dedicated to Microsoft Dynamics 365 Business Central.

Extension Designer

An Extension is a package of objects deployed to the individual service tier of a tenant. The same types of objects as in Microsoft Dynamics NAV are possible, with the addition of a Table Extension, a Page Extension and a Page Customization. The latter objects allow us to make changes to existing objects delivered by Microsoft. The beauty of it is that these changes are merged into the database on run time, which means that the existing objects are actually not touched at all and therefore can be overwritten with the latest version. So in a nutshell, an upgrade can be achieved in seconds!

Your roadmap

Upgrade in seconds, automatically done every month, hosted by Microsoft and individual customisations are possible, too? You are probably now thinking “how do I get there?”. If you are not using Microsoft Dynamics NAV and would like to replace your current ERP system with Microsoft Dynamics 365 Business Central then this is the easiest scenario. We will implement Microsoft Dynamics 365 Business Central as your new ERP system in the same way as we do it today.

If you are on an older version of Microsoft Dynamics NAV and have only moderate customisations and don’t use any registered solutions (add-ons) then all your customisations need to be converted into an Extension first. This doesn’t mean they have to be developed again, as Microsoft provides a conversion tool. A developer must check and test all converted code as not all types of customisation can be converted by the tool. Some code might need to be restructured as well to achieve the same or similar functionality.

If you do have registered solutions then you need to wait until these solutions are available as an Extension App. The timelines vary from ISV to ISV (Independent Solution Vendor). Our partner Tasklet Factory will offer their warehouse handheld scanning solution in July. Continia will make their Document Capture and Expense Management solutions available in October. Ultimately all ISVs will convert their solutions into Extensions.

Do you have to wait until all required solutions are available as an Extension before you can do anything? No! If you are currently on Microsoft Dynamics NAV 2015 or older, even still on Classic Client, then you need to do a traditional upgrade to the latest version (currently Microsoft Dynamics NAV 2018). If you are on Microsoft Dynamics NAV 2016 or higher then your version already supports Events. Subscribing to an Event means that your custom code doesn’t sit within the standard Microsoft object but outside in your own Codeunit. In plain English, you don’t leave any footprint in standard code, which allows you to upgrade much faster. If your customisations have been upgraded before from an older version then these changes have to be re-engineered and moved into an Event subscriber. In other words you want to reduce the footprint as much as you can. After this phase, you can go ahead with the conversion into an Extension. It’s important to note that you can actually deploy both types of customisation in a hybrid form. Therefore, both phases (re-engineering and conversion to Extension) can be done in sprints. The advantage is that a total design freeze is not required, unlike in traditional upgrade projects. Of course, all steps can also be combined into one project.

Microsoft also recognises your previous investment in a perpetual license and offers a 40% discount on your new subscription license for the next three years. So the earlier you move to Microsoft Dynamics 365 Business Central the more you will save.

Ready to upgrade your current ERP? This offer will help you on your way. 

Contact us now to see how we can help you with your Microsoft Dynamics 365 Business Central roadmap.

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Joerg Rau is Head of Theta ERP.