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Microsoft Dynamics 365
Microsoft Dynamics 365
Microsoft Dynamics 365
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Microsoft Dynamics 365
DeveloperMicrosoft
Initial releaseNovember 1, 2016; 9 years ago (2016-11-01)
Operating systemMicrosoft Windows
TypeEnterprise resource planning and customer relationship management
LicenseProprietary software
Websitewww.microsoft.com/en-us/dynamics-365

Microsoft Dynamics 365 is a set of enterprise accounting and sales software products.[1] Its flagship product, Dynamics GP, was released in 1981.[citation needed]

Applications

[edit]

Microsoft Dynamics 365 largely consists of products developed by companies that Microsoft acquired: Dynamics GP (formerly Great Plains Software), Dynamics NAV (formerly Navision; now forked into Dynamics 365 Business Central), Dynamics SL (formerly Solomon), and Dynamics AX (formerly Axapta; now forked into Dynamics 365 Finance and Operations).[citation needed] The various products are aimed at different market segments, ranging from small and medium-sized businesses (SMBs) to large organizations with multi-language, currency, and legal entity capability.[citation needed] In recent years[when?] Microsoft Dynamics ERP has focused its marketing and development on software as a service (SaaS) products.[citation needed]

Microsoft Dynamics 365 contains more than 15 applications:[2]

  • Microsoft Dynamics 365 Sales – Sales Leaders, Sales Operations
  • Microsoft Dynamics 365 Customer data platform – Customer Insights
  • Microsoft Dynamics 365 Customer data platform – Customer Voice
  • Microsoft Dynamics 365 Customer Service – Customer Service Leaders, Customer Service Operations
  • Microsoft Dynamics 365 Field Service – Field Service Leaders, Field Service Operations
  • Microsoft Dynamics 365 Remote Assist
  • Microsoft Dynamics 365 Human Resources – Attract, Onboard, Core HR
  • Microsoft Dynamics 365 Finance & Operations – Finance Leaders, Operation Leaders
  • Microsoft Dynamics 365 Supply Chain Management – Streamline planning, production, stock, warehouse, and transportation
  • Microsoft Dynamics 365 Intelligent Order Management
  • Microsoft Dynamics 365 Commerce
  • Microsoft Dynamics 365 Project Operations
  • Microsoft Dynamics 365 Marketing – Adobe Marketing Cloud, Dynamics 365 for Marketing
  • Microsoft Dynamics 365 Artificial Intelligence – AI for Sales, AI for Customer Service, AI for Market Insight
  • Microsoft Dynamics 365 Mixed Reality – Remote Assist, Layout, Guides
  • Microsoft Dynamics 365 Business Central – ERP for SMBs

Microsoft Dynamics 365 for Finance and Operations

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Microsoft Dynamics 365 for Finance and Operations Enterprise Edition (formerly Microsoft Dynamics AX) – ERP and CRM software-as-a-service product meant for mid-sized and large enterprises. Integrating both Dynamics AX and Dynamics CRM features, consisting of the following modules: for Financials and Operations, for Sales Enterprise, for Marketing, for Customer Service, for Field Service, for Project Service Automation. It is designed to be easily connected with Office 365 and PowerBI.

Microsoft Dynamics ax

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Microsoft Dynamics AX was one of Microsoft's Enterprise resource planning (ERP) software products. In 2018, its thick-client interface was removed and the web product was rebranded as Microsoft Dynamics 365 for Finance and Operations as a part of the Dynamics 365 suite. MDCC or Microsoft Development Center Copenhagen was once the primary development center for Dynamics AX.[3] Microsoft Dynamics AX contained 19 core modules:[4]

Traditional core (since axapta 2.5)

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Extended core

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The following modules are part of the core of AX 2009 (AX 5.0) and available on a per-license basis in AX 4.0:

Morphx and x++

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"MorphX" redirects here. For the video game, see MorphX (video game).

X++ integrates SQL queries into standard Java-style code.

Presence on the internet

[edit]

Information about Axapta prior to the Microsoft purchase was available on technet.navision.com, a proprietary web-based newsgroup, which grew to a considerable number of members and posts before the Microsoft purchase in 2002.

After Microsoft incorporated Axapta into their Business Solution suite, they transferred the newsgroup's content to the Microsoft Business Solutions newsgroup.[9] The oldest Axapta Technet post that can be found dates to August 2000.[10]

Events

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Extreme Conferences: extreme365 is a conference for the Dynamics 365 Partner Community which now includes Dynamics AX, featuring an Executive Forum.[11]

Personalization and predictive analytics

[edit]

At the National Retail Federation (NRF) Conference 2016 in New York, Microsoft unveiled its partnership with Infinite Analytics, a Cambridge-based predictive analytics and personalization company.[12]

Microsoft Dynamics 365 Business Central

[edit]
Microsoft Dynamics 365 Business Central
DeveloperMicrosoft
Initial releaseApril 2, 2018; 7 years ago (2018-04-02)
Stable release
Version 20 / April 2022; 3 years ago (2022-04)
PlatformPrimarily cloud-based
PredecessorMicrosoft Dynamics NAV, Navision
Available inMultilingual
TypeEnterprise resource planning
LicenseProprietary software
Websitedynamics.microsoft.com/en-us/business-central/overview/

Microsoft Dynamics 365 Business Central (formerly Microsoft Dynamics NAV) – ERP and CRM software-as-a-service product meant for small and mid-sized businesses. Integrating both Dynamics NAV and Dynamics CRM features, consisting of the following modules: for Financials and Operations, for Sales Professionals, for Marketing. Easily connected with Office 365 and PowerBI.

  • Microsoft Dynamics 365 Customer Engagement (formerly Microsoft CRM). Microsoft Dynamics 365 Customer Engagement contains modules to interact with customers: Marketing, Sales, Customer Service, Field Service. The Customer Service is a module used to automate customer service processes providing performance data reports and dashboards.[13]

Online and on-premises deployment

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The Dynamics 365 Business Central system comes in both an online hosted (SaaS) version and an on-premises version for manual deployment and administration.

Some features, such as integration with other online Microsoft services, are not available in the on-premises version and only in the online edition.[14]

Localization

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As an international ERP system, Business Central is available with 24 official localizations to work with the local features and requirements of various countries. Local partners provide an additional 47 localizations.[15]

The system is compliant with various internal financial standards to meet local requirements, such as GDPR, IAS/IFRS and SOX.[16]

Editions and licensing

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There are two editions of Business Central, Essentials and Premium. Essentials covers Finance, Sales, Marketing, Purchasing, Inventory, Warehousing, and Project Management. Premium includes all of Essentials functionality plus Service Management and Manufacturing features.[17]

With the arrival of NAV 2013, Microsoft introduced a new licensing model that operated on a concurrent user basis. With this model, user licenses were of two types: A full user or a limited user. The full user has access to the entire system, whereas the limited user only has read access to the system and limited write access.[18]

From the Business Central rebrand launch, the licensing model changed to a per-seat license model with a 3x concurrent seat multiplier added to any existing perpetual licences from previous Dynamics NAV versions. Customers with a Dynamics NAV Extended Pack license were moved to the Premium edition.

Microsoft Dynamics 365 Sales

[edit]
Microsoft Dynamics 365 Sales
DeveloperMicrosoft
Initial release2003; 22 years ago (2003)
Stable release
Dynamics 365 / February 2018; 7 years ago (2018-02)[19]
Operating systemWindows
Available inMultilingual
TypeCustomer relationship management
LicenseTrialware
Websitedynamics.microsoft.com

Microsoft Dynamics 365 Sales is a customer relationship management software package developed by Microsoft. The current version is Dynamics 365. The name and licensing changed with the update from Dynamics 2016. 365 Sales comes with softphone capabilities.[20][21]

History

[edit]

Microsoft Dynamics was a line of Business Applications, containing enterprise resource planning (ERP) and customer relationship management (CRM). Microsoft marketed Dynamics applications through a network of reselling partners who provided specialized services.[22] Microsoft Dynamics formed part of "Microsoft Business Solutions". Dynamics can be used with other Microsoft programs and services, such as SharePoint, Yammer, Office 365, Azure and Outlook. The Microsoft Dynamics focus-industries are retail, services, manufacturing, financial services, and the public sector. Microsoft Dynamics offers services for small, medium, and large businesses.[23][24][25]

Business Central

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Business Central was first published as Dynamics NAV and Navision, which Microsoft acquired in 2002.

[edit]

Navision originated at PC&C A/S (Personal Computing and Consulting), a company founded in Denmark in 1984. PC&C released its first accounting package, PCPlus, in 1985—a single-user application with basic accounting functionality. There followed in 1987 the first version of Navision,[26] a client/server-based accounting application that allowed multiple users to access the system simultaneously. The success of the product prompted the company to rename itself to Navision Software A/S in 1995.

The Navision product sold primarily in Denmark until 1990. From Navision version 3 the product was distributed in other European countries, including Germany and the United Kingdom.

In 1995 the first version of Navision based on Microsoft Windows 95 was released.

In 2000, Navision Software A/S merged with fellow Danish firm Damgaard A/S (founded 1983) to form NavisionDamgaard A/S.[27] In 2001 the company changed its name to "Navision A/S".

On July 11, 2002, Microsoft bought Navision A/S to go with its previous acquisition of Great Plains Software. Navision became a new division at Microsoft, named Microsoft Business Solutions, which also handled Microsoft CRM.[28]

In 2003 Microsoft announced plans to develop an entirely new ERP system (Project Green). But it later decided to continue development of all ERP systems (Dynamics AX, Dynamics NAV, Dynamics GP and Dynamics SL). Microsoft launched all four ERP systems with the same new role-based user interface, SQL-based reporting and analysis, SharePoint-based portal, Pocket PC-based mobile clients and integration with Microsoft Office.

Dynamics NAV

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In September 2005, Microsoft re-branded the product and re-released it as Microsoft Dynamics NAV.[29]

In December 2008, Microsoft released Dynamics NAV 2009, which contains both the original "classic" client, as well as a new .NET Framework-based three-tier GUI called the RoleTailored Client (RTC).[30]

In first quarter of 2014 NAV reached 102,000 current customers.[31]

In 2016, Microsoft announced the creation of Dynamics 365 — a rebranding of the suite of Dynamics ERP and CRM products as a part of a new online-only offering.[32] As a part of this suite, the successor to NAV was codenamed "Madeira".[33]

Dynamics 365 Business Central

[edit]

In September 2017 at the Directions conference, Microsoft announced the new codename "Tenerife" as the next generation of the Dynamics NAV product.[34] This replaced codename "Madeira".

On April 2, 2018, Business Central was released publicly[35] and plans for semi-annual releases were announced.[36]

Business Central introduced a new AL language for development and translated the codebase from Dynamics NAV (C/AL).[37][38]

Dynamics SL, Dynamics GP, Dynamics C5

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Several variants of the Dynamics brand have migration paths to Business Central with most having not had a new release since 2018.[39][40] The later releases of the SL, GP, and C5 products adopted the Dynamics NAV Role-Tailored Client UI which helped pave the transition to the Business Central product.

Legacy Dynamics products and their support end dates[41]
Product Last major release Support lifecycle end date
Dynamics SL 2018 July 11, 2028
Dynamics GP 2018 R4 (Nov 2021) January 11, 2028
Dynamics C5 2016 April 14, 2026

History of Dynamics C5

[edit]

Dynamics C5 was developed in Denmark as the successor to the DOS-based Concorde C4. The developing company Damgaard Data merged with Navision in 2001 which was subsequently acquired by Microsoft Microsoft in 2002 rebranding the solution from Navision C5 to Microsoft Dynamics C5.[42]

The product handles currently more than 70,000 installations in Denmark.

History of Dynamics SL

[edit]
Microsoft Dynamics SL Connector

Based in Findlay, Ohio, Solomon's roots go back more than 35 years, when co-founders Gary Harpst, Jack Ridge and Vernon Strong started TLB, Inc. in 1980. TLB, Inc. stands for The Lord's Business, "to remind the founders why the business was started: to conduct the business according to biblical principles." TLB was later renamed Solomon Software, and then Microsoft Dynamics SL.[43]

History of Dynamics GP

[edit]

The Dynamics GP product was originally developed by Great Plains Software, an independent company located in Fargo, North Dakota run by Doug Burgum. Dynamics Release 1.0 was released in February 1993.[44] It was one of the first accounting packages in the United States that were designed and written to be multi-user and to run under Windows as 32-bit software.[45] In late 2000, Microsoft announced the purchase of Great Plains Software.[46][47] This acquisition was completed in April 2001.

Dynamics GP is written in a language called Dexterity. Previous versions were compatible with Microsoft SQL Server, Pervasive PSQL, Btrieve, and earlier versions also used C-tree, although after the buyout all new versions switched entirely to Microsoft SQL Server databases.

Dynamics GP will no longer be updated after September 2029, with security updates through April 2031.[48]

Finance

[edit]

Microsoft Dynamics 365 Finance is a Microsoft enterprise resource planning (ERP) system for medium to large organizations. The software, part of the Dynamics 365 product line, was first on general release in November 2016, initially branded as Dynamics 365 for Operations. In July 2017, it was rebranded to Dynamics 365 for Finance and Operations. At the same time, Microsoft rebranded their business software suite for small businesses (Business Edition, Financials) to Finance and Operations, Business Edition, however, the two applications are based on completely different platforms. Its history includes:

  • 1998 (March) – Axapta, a collaboration between IBM and Danish Damgaard Data, released in the Danish and US markets.
  • 2000 – Damgaard Data merged with Navision Software A/S to form NavisionDamgaard, later named Navision A/S. Released Axapta 2.5. IBM returned all rights in the product to Damgaard Data shortly after the release of Version 1.5.
  • 2002 – Microsoft acquires Navision A/S.[49] Released Axapta 3.0.
  • 2006 – Released Microsoft Dynamics AX 4.0.
  • 2008 – Released Microsoft Dynamics AX 2009.
  • 2011 – Released Microsoft Dynamics AX 2012.[50] It was made available and supported in more than 30 countries and 25 languages. Dynamics AX is used in over 20,000 organizations of all sizes, worldwide.[51]
  • 2016 – Released Microsoft Dynamics AX 7. Later rebranded to Dynamics 365 for Operations. This update was a major revision with a completely new UI delivered through a browser-based HTML5 client, and initially only available as a cloud-hosted application. This version lasted only a few months, though, as Dynamics AX was rebranded Microsoft Dynamics 365 for Operations in October 2016, and once more as Dynamics 365 for Finance and Operations in July 2017.
  • 2017 – Rebranded to Dynamics 365 for Finance and Operations, Enterprise Edition[52] (not to be mistaken with Dynamics 365 for Finance and Operations Business Edition, which is based on former Microsoft Dynamics NAV).
  • 2018 – Rebranded to Dynamics 365 for Finance and Operations
  • 2018 – The Human Resources Module became Dynamics 365 for Talent, now Dynamics 365 Human Resources.
  • 2020 – Rebranded and split into two products:[53]
    • Dynamics 365 Finance
    • Dynamics 365 Supply Chain Management
  • 2023 – Dynamics 365 Human Resources re-integrated

Sales

[edit]
Old Microsoft Dynamics CRM logo

Microsoft Dynamics 365 Sales has undergone several iterations over its history.

Microsoft CRM 1.2

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Microsoft CRM 1.2 was released on December 8, 2003.[54] Microsoft CRM 1.2 was not widely adopted by industry.[55]

It was not possible to create custom entities but there was a software development kit (SDK) available using SOAP and XML endpoints to interact with it.

Microsoft Dynamics CRM 3.0

[edit]

The second version was rebranded as Microsoft Dynamics 3.0 (version 2.0 was skipped entirely) to signify its inclusion within the Dynamics product family and was released on December 5, 2005.[56] Notable updates over version 1.2 are the ease of creating customizations to CRM, the switch from using Crystal Reports to Microsoft SQL Reporting Services, and the ability to run on Windows Vista and Outlook 2007.

Significant additions released later by Microsoft also allowed Dynamics CRM 3.0 to be accessed by various mobile devices and integration with Siebel Systems. This was the first version that saw reasonable take up by customers.

You could create custom entities and (1xN) relations between the system/custom entities.

Microsoft Dynamics CRM 4.0

[edit]

Dynamics CRM 4.0 (a.k.a. Titan) was introduced in December 2007 (RTM build number 4.0.7333.3 Microsoft CRM build numbers from version 4.0 to version 8). It features multi-tenancy, improved reporting security, data importing, direct mail merging and support for newer technologies such as Windows Server 2008[57] and SQL Server 2008 (Update Rollup 4).[58]

Dynamics CRM 4.0 also implements CRM Online, a hosted solution[buzzword] that is offered directly by Microsoft. The multi-tenancy option also allows ISVs to offer hosted solutions[buzzword] to end customers as well.

Dynamics CRM 4.0 is the first version of the product, which has seen significant take up in the market and passed the 1 million user mark in July 2009.[59]

Additional support for NxN relations was added, which solved a lot of 'in-between' entities. "Connections" were also introduced in favour of "Relations". The UI design was based on Office 2007 look and feel, with the same blue shading and round button as "start".

Microsoft Dynamics CRM 2011

[edit]

Dynamics CRM 2011 was released to open Beta in February 2010. It then went into Release Candidate stage in December 2010. The product was then released in February 2011 (build number 5.0.9688.583)

Browsers such as Internet Explorer, Chrome and Firefox browsers are fully supported since Microsoft Dynamics CRM 2011 Update Rollup 12.[60] Because of this browser compatibility R12 was highly anticipated but also caused a lot of stress for customers that had used unsupported customizations. R12 broke those customizations and clients had to rethink their changes. Microsoft offered additional wizards to pinpoint the problems.

Microsoft Dynamics CRM 2013

[edit]

Dynamics CRM 2013 was released to a closed beta group on July 28, 2013. Dynamics CRM 2013 Online went live for new signups in October 2013. It was released in November 2013 (build number 6.0.0000.0809).

Microsoft Dynamics CRM 2015

[edit]

On September 16, 2014, Microsoft announced that Microsoft Dynamics CRM 2015, as well as updates to its Microsoft Dynamics CRM Online and Microsoft Dynamics Marketing services, will be generally available in the fourth quarter of 2014. Microsoft also released a preview guide with details.

On November 30, 2014, Microsoft announced the general availability of Microsoft Dynamics CRM 2015 and the 2015 Update of Microsoft Dynamics Marketing.[61]

On January 6, 2015, Microsoft announced the availability of a CRM Cloud service specifically for the US Government that is designed for FedRAMP compliance.[62]

Microsoft Dynamics CRM 2016

[edit]

Microsoft Dynamics CRM 2016 was officially released on November 30, 2015.[63] Versions for CRM 2016 was 8.0, 8.1 and 8.2. With version 8.2 the name, Microsoft Dynamics CRM 2016, was changed to Dynamics 365

Microsoft Dynamics CRM 2016 was officially released on November 30, 2015. It includes advancements in intelligence, mobility and service, with significant productivity enhancements.[64] In June 2016 was developed a special application which sends scanned info from business cards into MS Dynamics CRM named Business Card Reader for MS Dynamics and Call Tracker application in 2017.

Microsoft Dynamics 365 sales

[edit]

Microsoft Dynamics 365 was officially released on November 1, 2016, as the successor to Dynamics CRM.[65] The product combines Microsoft business products (CRM and ERP Dynamics AX). A softphone dialer can be added as an extension.[66]

The on-premises application, called Dynamics 365 Customer Engagement contained the following applications:

  • Dynamics 365 for Sales
  • Dynamics 365 for Customer Service
  • Dynamics 365 for Marketing
  • Dynamics 365 for Field Service
  • Dynamics 365 for Project Service Automation

The offerings Dynamics 365 for Finance and Operations cover the ERP needs, such as bookkeeping, invoice and order handling and manufacturing.

In Dynamics 365 version 9.0.0.1 many notable features like Virtual entities in Dynamics 365,[67] Auto Numbering Attributes, Multi Select Options sets etc. were introduced.

Product updates

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October 2018 update

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The update released in October 2018 included new features for sales, marketing, customer service, and recruitment.[68][69]

April 2019 update

[edit]

This update was released on April 5, 2019. The features added after the update, included a user interface (UUI) to embed canvas apps created in PowerApps and it also brought back the tabs facility. The update also led to the removal of the Xrm.Page.data.[70]

February 2020 update

[edit]

An update was announced on February 19, 2019. The update included additions to the Customer Insights, Microsoft's customer data platform (CDP) such as new first and third-party data connections. In addition to this, this update brought forth new sales forecasting tools and Dynamics 365 Sales Engagement Center. The Dynamics 365 Project Operations was introduced in this update.[71]

October 2021 update (wave 1)

[edit]

An update was announced on October 5, 2019. This update included a replacement of bank reconciliation reports. The payment reconciliation journal was improved to support preview posting, separate number series, and user-defined document numbers. Microsoft Dynamics 365 also welcomes Correct Dimensions action. With this update, Microsoft Dynamics 365 has welcomed integration with Microsoft Teams search box, Microsoft Word, and Microsoft Universal Print technology.[72][citation needed]

Support and end of life

[edit]
Version Release date End of mainstream support End of extended support
Microsoft CRM 1.2 October 31, 2003[73] January 9, 2007[73] —
Microsoft Dynamics CRM 3.0 December 1, 2005[74] April 12, 2011[74] April 12, 2016[74]
Microsoft Dynamics CRM 4.0 February 29, 2008[75] April 9, 2013[75] April 10, 2018[75]
Microsoft Dynamics CRM 2011 May 18, 2011[76] July 12, 2016[76] July 13, 2021[76]
Microsoft Dynamics CRM 2013 January 12, 2014[77] January 8, 2019[77] January 9, 2024[77]
Microsoft Dynamics CRM 2015 February 11, 2015[78] January 14, 2020[78] January 14, 2025[78]
Microsoft Dynamics CRM 2016 November 30, 2015[79] January 12, 2021[79] January 13, 2026[79]
Microsoft Dynamics 365 November 1, 2016[65] (follows Microsoft Modern Lifecycle Policy[80])
[edit]

Microsoft Dynamics includes a set of related products:

  • Microsoft Dynamics Management Reporter. Management Reporter is a financial reporting and analysis application. Its main feature is to create income statements, balance sheet statements, cash flow statements and other financial reports. Reports can be stored in a centralized Report Library along with external supporting files. Security on reports and files may be controlled using Windows Authentication and SQL Server.
  • Microsoft Dynamics for Retail (formerly Microsoft Dynamics RMS, QuickSell 2000 and Dynamics POS)
  • Microsoft Dynamics for Marketing (formerly MDM and MarketingPilot 2012)
  • Microsoft Dynamics Social Listening (formerly Netbreeze 2013)
  • Power Automate, formerly Microsoft Flow (until 2019[81]), a toolkit similar to IFTTT for implementing business workflow products.
  • Power Automate Desktop, robotic process automation software for automating graphical user interfaces (acquired in May 2020)[82]
  • Parature customer engagement software in the customer support and service channels (acquired in January 2014)[83]

Microsoft also sells Sure Step as an implementation methodology for Microsoft Dynamics for its re-sellers.

In July 2018, Microsoft announced Dynamics 365 AI for sales applications.[84]

See also

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References

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Further reading

[edit]
[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Microsoft Dynamics 365

View on Grokipedia
from Grokipedia
Microsoft Dynamics 365 is a cloud-based suite of artificial intelligence-powered enterprise resource planning (ERP) and customer relationship management (CRM) applications designed to unify business data, processes, and teams for enhanced operational efficiency, customer engagement, and data-driven decision-making across sales, service, finance, supply chain, and other functions. Announced by Microsoft on July 6, 2016, Dynamics 365 represented a significant evolution by merging the company's existing Dynamics CRM and Dynamics AX product lines into a single, integrated platform running on Azure, with general availability beginning in the fall of that year. This shift from on-premises solutions to a software-as-a-service (SaaS) model enabled scalable, continuously updated applications that leverage AI, real-time analytics, and low-code customization to automate workflows and personalize customer experiences. The suite comprises modular applications tailored to specific business needs, including Dynamics 365 Sales for managing complex B2B sales pipelines with built-in CPQ (Configure, Price, Quote) capabilities and boosting productivity through AI-driven insights and agentic AI agents that autonomously qualify leads and close deals, Dynamics 365 Customer Service for omnichannel support and case resolution, Dynamics 365 Field Service for optimizing onsite operations, Dynamics 365 Finance for financial management and compliance, and Dynamics 365 Supply Chain Management for end-to-end visibility in procurement and logistics. It seamlessly integrates with the broader Microsoft ecosystem, such as Microsoft 365 for productivity tools, Power Platform for app development, and Azure for advanced AI capabilities like Copilot and autonomous agents. Copilot provides embedded AI features such as drafting contextual emails, generating summaries for cases and meetings, predictive forecasting, and enhancing cross-app productivity through integrations with tools like Outlook and Teams. This allows organizations of all sizes to extend functionality without extensive coding. As of 2025, Dynamics 365 emphasizes agentic AI to enable proactive, autonomous task handling, further driving innovation in business applications.

Introduction

Overview

Microsoft Dynamics 365 is a cloud-based suite of intelligent business applications launched in 2016, designed to unify enterprise resource planning (ERP), customer relationship management (CRM), and analytics into modular, interconnected apps powered by the Microsoft Cloud. This platform represents an evolution from previous Microsoft Dynamics products, merging the capabilities of Dynamics CRM and Dynamics AX into a single, cohesive system that enables seamless data sharing and consistent user experiences across applications. By hosting on Microsoft Azure, it provides scalable deployment options, including cloud-only and hybrid configurations, to support diverse business needs. At its core, Dynamics 365 aims to facilitate end-to-end business processes through AI-driven insights, automation, and deep integration with the broader Microsoft ecosystem, such as Power Platform for custom app development and Azure for advanced analytics. These features empower organizations to automate workflows, predict outcomes using machine learning via Azure AI services and tools like Copilot, and derive actionable intelligence from unified data sources, ultimately enhancing operational efficiency and decision-making. The suite's modular design allows users to adopt specific applications for functions like finance or sales without requiring a full overhaul, promoting flexibility and rapid innovation. As of 2025, Dynamics 365 emphasizes agentic AI capabilities, including Copilot for Microsoft 365 and autonomous agents, to enable proactive task handling and innovation. Targeted at enterprises and small to medium-sized businesses (SMBs) seeking scalable solutions, Dynamics 365 addresses key areas including finance, sales, customer service, and operations, helping users streamline processes and foster growth in dynamic markets. It was made generally available on November 1, 2016, following initial announcements earlier that year, marking Microsoft's shift toward intelligent, cloud-first business applications.

Architecture and Key Technologies

Microsoft Dynamics 365 is built on a modular application architecture that leverages Microsoft Dataverse—formerly known as Common Data Service—as its foundational data layer, enabling secure storage and management of business data across interconnected applications. Dataverse organizes data into standardized tables, supporting shared data models derived from the Common Data Model (CDM), which acts as a unified schema for interoperability among Dynamics 365 apps, Power Platform tools, and Azure services. This modularity allows organizations to deploy and scale individual applications independently while maintaining consistent data structures, reducing redundancy and facilitating cross-app workflows without custom integrations. For instance, sales, finance, and customer service modules can access a common entity like "customer records" through Dataverse, ensuring real-time synchronization and extensibility via plugins or custom entities. Central to this architecture are key technologies that enhance functionality and user empowerment. Artificial intelligence and machine learning are integrated via Azure AI services, including Azure Machine Learning for custom model training and Azure OpenAI Service for generative capabilities, allowing Dynamics 365 to deliver predictive analytics, such as lead scoring in sales or demand forecasting in supply chain management. Additionally, Copilot provides embedded AI capabilities for tasks like drafting contextual emails, generating summaries for cases, meetings, and records, forecasting through predictive insights, and enhancing cross-app productivity via integrations with tools such as Outlook and Teams. Integration capabilities in Dynamics 365 emphasize seamless connectivity, with native support for Microsoft 365 ecosystem tools like Teams for collaborative task management, Outlook for email-driven workflows, and Viva Connections for unified employee experiences. These are augmented by extensive APIs, such as the Microsoft Graph API, and over 1,000 prebuilt connectors in Power Automate, enabling bidirectional data flow with third-party services like Salesforce or SAP without complex coding. This open architecture supports event-driven integrations and custom APIs, ensuring Dynamics 365 acts as a hub in heterogeneous environments. Security is embedded throughout the platform via role-based access control (RBAC), where predefined or custom security roles assign granular privileges—such as read, write, or delete— to tables, records, and actions, preventing unauthorized access while aligning with business hierarchies. Dynamics 365 adheres to stringent compliance standards, including GDPR for safeguarding personal data through features like data subject requests and consent management, and SOX for audit trails and financial controls via integrated reporting tools. Data sovereignty is addressed through geographic data residency options in Azure regions, combined with encryption at rest and in transit, logical isolation, and compliance certifications that allow customers to retain control over data location and access policies. The evolution of Dynamics 365's technology stack reflects a strategic shift from on-premises installations—rooted in legacy systems like Dynamics AX and CRM—to a SaaS-first model hosted on Azure, delivering automatic updates, global scalability, and reduced infrastructure costs. Hybrid deployments bridge this transition by incorporating on-premises components, such as local SQL databases or Azure Service Fabric clusters, for regulated industries needing data locality while leveraging cloud innovations. This progression maintains backward compatibility for existing investments while prioritizing cloud-native advantages like elastic compute and integrated AI.

Applications

ERP Applications

Microsoft Dynamics 365 ERP applications provide comprehensive tools for managing core back-office operations, primarily through Dynamics 365 Finance and Dynamics 365 Supply Chain Management, designed to handle complex financial and logistical processes for global organizations. Dynamics 365 Finance delivers essential modules for financial management, enabling organizations to maintain accurate ledgers, process accounts payable and receivable efficiently, and support budgeting with advanced planning tools. The general ledger module automates subledger matching and anomaly detection to accelerate financial close cycles, while accounts payable and receivable functionalities incorporate AI-powered billing, collections, and payment predictions to minimize write-offs and optimize cash flow. Budgeting features integrate with Copilot for agile financial planning and forecasting, and the system supports multi-currency operations through a unified tax data model that manages jurisdictions, rates, and deductibility across international boundaries. Dynamics 365 Supply Chain Management addresses end-to-end supply chain needs with specialized features for inventory control, procurement, manufacturing, warehouse operations, and transportation logistics. Inventory management optimizes stock levels using dynamic buffers and demand-driven material requirements planning (DDMRP), with automation for placement decisions via Copilot. Procurement tools include AI-driven supplier communications for autonomous order confirmations and risk assessment, while manufacturing capabilities leverage process mining for real-time productivity insights and modern user interfaces. Warehouse management streamlines tasks through intuitive handheld device interfaces and efficiency enhancements, and transportation features provide end-to-end visibility to optimize delivery routes and reduce disruptions. AI-driven demand forecasting and automated replenishment are key capabilities in Dynamics 365 Supply Chain Management, utilizing demand planning to generate forecasts and automatically create planned orders. Setup involves configuring demand forecasting parameters under Master planning > Setup, where users enable demand planning and integrate external data such as sales history. The system employs Azure Machine Learning for accurate predictions based on historical data. Running master planning then auto-generates planned purchase or sales orders. For automated replenishment, configurations support min-max thresholds or DDMRP methods to trigger alerts or purchase orders, ensuring optimal inventory levels. These ERP applications stand out with advanced analytics for demand forecasting, which employs AI models to improve accuracy by incorporating events and promotions, alongside IoT integration for real-time asset tracking and predictive maintenance in manufacturing environments. Compliance tools facilitate global operations through automated regulatory updates, expanded country coverage for over 210 regions, and built-in cybersecurity measures ensuring data privacy and 99.9% uptime. Targeted at mid-to-large enterprises with intricate operational requirements, these applications contrast with simpler solutions by offering scalability for multinational deployments and deep customization without heavy legacy customizations. In the 2025 release wave 2, enhancements include a new journal framework and accounting rules engine in Finance for flexible multi-entity configurations, alongside agentic AI for bank reconciliation and period-end close acceleration. For Supply Chain Management, updates feature in-memory planning for AI-optimized supply chain processes with near real-time material requirements and scheduling, plus intelligent analytics in demand planning to support sustainable practices through resilient forecasting and reporting.

CRM Applications

Microsoft Dynamics 365's CRM applications are designed to enhance customer engagement through integrated tools for sales, marketing, and service operations, enabling organizations to build relationships, accelerate revenue, and deliver personalized experiences. These applications leverage AI and data unification to provide actionable insights, streamlining customer-facing processes from lead generation to ongoing support. By focusing on customer-centric workflows, they help businesses manage interactions across channels while ensuring compliance and scalability. Dynamics 365 Sales provides comprehensive tools for lead management, allowing sales teams to capture, qualify, and nurture prospects efficiently from initial contact to conversion. It supports complex B2B sales pipelines with built-in Configure, Price, Quote (CPQ) capabilities, including product configuration, pricing rules, constraint-based configuration, quote generation, and opportunity management for long-cycle, multi-stakeholder deals, making it suitable for enterprise-level B2B sales with advanced pipeline tracking, forecasting, and AI features via Copilot. Opportunity tracking features enable detailed monitoring of sales pipelines, including stages, activities, and progress, to prioritize high-value deals. Forecasting capabilities integrate historical data and AI-driven predictions to generate accurate revenue projections, helping managers align resources and set realistic targets. AI-powered sales insights, such as predictive lead scoring, use machine learning models to evaluate lead potential based on behavioral and demographic factors, automating prioritization and recommendations. Additionally, Copilot for Sales offers real-time assistance, including AI-generated opportunity summaries and meeting notes, to enhance seller productivity. Dynamics 365 Sales features out-of-the-box AI agents integrated with Copilot to further enhance sales productivity. These include the Sales Qualification Agent, which autonomously researches and qualifies leads via outreach; the Sales Close Agent - Research, which analyzes opportunities for risks and promising developments; the Sales Close Agent - Engage, which manages end-to-end customer engagement and deal closure; and the Sales Research Agent, which handles natural language queries on sales data. Some agents, such as Sales Close Agent - Research and Sales Research Agent, are in preview. Copilot itself provides additional AI assistance for record summaries, email composition, meeting preparation, and more. The Percent of List pricing method allows for setting a fixed percentage-based price for price list items, such as 85% of the list price to equate to a 15% discount, particularly useful for customer tiers; the system automatically calculates the Price Per Unit on line items, though displaying the percentage off is not available out-of-the-box and requires customization. Dynamics 365 Customer Service supports efficient case management by automating case creation, assignment, and resolution workflows, ensuring issues are handled promptly across teams. The knowledge base functionality allows organizations to create, curate, and share articles for internal use and customer self-service, reducing resolution times through searchable content. Omnichannel support integrates channels like email, chat, voice, and social media, enabling agents to manage conversations seamlessly within a unified interface. Self-service portals empower customers to access resources, submit tickets, and resolve queries independently, fostering autonomy while deflecting low-priority cases from agents. Dynamics 365 Marketing, now integrated within Dynamics 365 Customer Insights - Journeys, facilitates event management for planning, registration, and follow-up on virtual or in-person activities to engage audiences. Lead nurturing tools automate personalized communications to guide prospects through the buyer's journey, using scored segments to tailor content and timing. Journey orchestration enables the design of multi-channel customer paths, coordinating interactions across email, SMS, and web to optimize engagement at key moments. Integration with email and LinkedIn supports targeted campaigns, including form submissions and social advertising, to capture and qualify leads effectively. Unified customer data in Dynamics 365 is powered by Dataverse, which aggregates information from multiple sources to deliver a 360-degree view of customers, combining transactional, behavioral, and demographic details into a single profile. This foundation enables AI-driven sentiment analysis to gauge customer emotions from interactions, informing proactive service adjustments. Personalization features leverage these insights to customize recommendations and communications, enhancing relevance across sales, marketing, and service touchpoints. In 2025 enhancements, Copilot AI introduces agentic workflows that automate complex tasks, such as dynamic routing and decision-making in service processes, allowing AI agents to handle routine inquiries independently. Generative AI capabilities further enable response automation, drafting context-aware replies and knowledge articles to accelerate agent efficiency while maintaining a human touch.

Industry-Specific Applications

Microsoft Dynamics 365 offers a suite of industry-specific applications that extend its core ERP and CRM functionalities to address unique workflows and challenges in targeted sectors. These apps incorporate pre-configured processes, AI integrations, and data models tailored to verticals such as services, retail, and professional services, enabling organizations to streamline operations while maintaining seamless connectivity with broader Dynamics 365 ecosystems. By leveraging Microsoft Power Platform components, these solutions allow for rapid customization without extensive coding, focusing on outcomes like predictive maintenance, omnichannel engagement, and risk mitigation. Dynamics 365 Field Service is designed for service-oriented industries like utilities and telecommunications, providing tools for scheduling, dispatching, and managing work orders to optimize onsite service delivery. Key capabilities include an interactive schedule board that matches technicians to jobs based on skills, location, and availability, along with automated dispatching via the Resource Scheduling Optimization add-in to minimize travel time and costs. Work orders capture detailed tasks, required parts, labor estimates, and service history, often generated from service requests or cases. IoT integration through Connected Field Service enables predictive maintenance by monitoring connected assets in real-time, automatically triggering alerts and work orders to prevent equipment failures, such as in fiber optic networks or power grids. This results in reduced downtime and improved first-time fix rates for field operations. Dynamics 365 Commerce supports retail and consumer goods sectors by delivering omnichannel capabilities that unify e-commerce, point-of-sale (POS), and back-office inventory management. It features a composable, API-driven architecture for building personalized digital storefronts, allowing customers to browse, purchase, and fulfill orders across channels like online, in-store, or mobile apps, with options for buy-online-pickup-in-store (BOPIS) or home delivery. The cloud-based POS system enables frontline staff to access real-time inventory, process transactions, and engage customers with loyalty programs, while centralized inventory synchronization ensures accurate stock visibility across global locations to avoid overselling. This integration fosters seamless customer experiences, such as converting in-store interactions to online rewards, and helps retailers manage seasonal demand in consumer goods supply chains. Dynamics 365 Project Operations targets professional services firms, combining resource management, project accounting, and time/expense tracking into a unified platform to enhance project delivery and profitability. It facilitates resource allocation by forecasting demand and assigning personnel based on skills and availability, using AI-driven insights to balance workloads and prevent burnout. Project accounting supports flexible pricing models, including fixed-price, time-and-materials, or retainer contracts, with automated invoicing tied to milestones and actuals for accurate financial tracking. Time and expense entry is streamlined through mobile apps and templates, allowing real-time submissions and approvals, which integrate with payroll and budgeting to provide visibility into project margins. This app is particularly valuable for consulting or engineering firms managing complex, client-facing engagements. In addition to these core apps, Dynamics 365 includes vertical solutions like Dynamics 365 Human Resources for talent management across industries, offering employee self-service portals for leave requests, performance tracking, and skill development via integrated dashboards that analyze gaps and recommend training. It automates HR processes such as onboarding and benefits administration, connecting workforce data to operational metrics for better agility. Dynamics 365 Fraud Protection, applicable to finance and retail, uses adaptive AI to detect anomalies in transactions, account creations, and returns, generating risk scores and BI reports to prevent fraud while minimizing false positives; however, new purchases ended on February 3, 2025, with support concluding on February 3, 2026. These tools extend CRM functionalities for secure, people-centric operations in high-risk environments. Customization is facilitated through industry accelerators and templates, which provide pre-built data models, entities, and workflows on the Microsoft Power Platform for sectors like healthcare, manufacturing, and nonprofits. For healthcare, accelerators include patient engagement tools and compliance templates for regulatory adherence, such as HIPAA-aligned data handling. In manufacturing, they offer supply chain optimization components for production planning and quality control. Nonprofit accelerators focus on donor management and grant tracking, with reusable canvases for fundraising campaigns. These low-code assets enable partners and ISVs to build tailored apps quickly, extending Dynamics 365 with sector-specific logic without starting from scratch. As of the 2025 release wave 1, enhancements emphasize AI-driven industry insights, including Copilot integrations in solutions like Sustainability Manager for automated recommendations in retail and manufacturing operations. For manufacturing, a new factory operations agent on Azure AI and enhanced data analytics in Microsoft Fabric support supply chain resilience by enabling predictive analytics for disruptions and intelligent shop floor monitoring, helping firms adapt to volatile demands. These updates build on existing apps to deliver proactive, agentic capabilities across verticals, with general availability starting April 1, 2025.

History

Origins from Legacy Products

Microsoft's entry into enterprise resource planning (ERP) and customer relationship management (CRM) software began with strategic acquisitions in the early 2000s, building on established products targeted at small and mid-sized businesses (SMBs). In 2001, Microsoft acquired Great Plains Software for approximately $1.1 billion in stock, integrating its mid-market accounting solutions that automated financials, distribution, project accounting, e-commerce, human resources, payroll, manufacturing, supply chain, analytics, sales, marketing, and customer service processes for over 140,000 businesses across 132 countries. This acquisition formed the foundation for Microsoft Dynamics GP, emphasizing robust financial reporting and operational efficiency for mid-market enterprises. Shortly thereafter, in July 2002, Microsoft completed its $1.45 billion acquisition of Navision a/s, a Danish provider of integrated business software, which expanded the portfolio to include ERP solutions tailored for SMBs and international markets. The Navision acquisition notably incorporated several key product lines, including Navision Attain, which evolved into Microsoft Dynamics NAV and focused on end-to-end SMB ERP functionalities such as financial management, supply chain, and customer service automation. It also brought Axapta, originally developed by Damgaard Data in collaboration with IBM and released in 1998, which became the core of Microsoft Dynamics AX for enterprise-level ERP with its MorphX development environment enabling customizable application extensions. Additionally, Navision's C5 product line, targeted at European SMBs for localized accounting and business management, was integrated, providing region-specific compliance and operational tools. These acquisitions under the Microsoft Business Solutions division created a diverse lineup of standalone ERP offerings, each addressing distinct market segments without initial unification. Parallel to its ERP expansions, Microsoft developed its CRM capabilities internally, launching Microsoft Business Solutions CRM 1.0 in January 2003 as an on-premises solution built on the .NET framework to manage customer interactions, sales automation, marketing campaigns, and service operations. Subsequent iterations, including CRM 3.0 in 2006 and versions through 2015, enhanced customization, integration with Outlook, and reporting features, establishing a strong emphasis on sales force automation and customer engagement for SMBs and enterprises. Another legacy line emerged through Great Plains' prior 2000 acquisition of Solomon Software, which specialized in project-based ERP for industries like professional services and construction; this became Microsoft Dynamics SL, focusing on project accounting, resource management, and time/expense tracking. These disparate products—Dynamics GP, NAV, AX, SL, C5, and CRM—operated as independent solutions until 2016, when Microsoft announced the unification under the Dynamics 365 branding, blending ERP and CRM into a modular cloud platform to streamline business processes and data integration across applications.

Transition to Unified Platform

In November 2016, Microsoft launched Dynamics 365 as a unified suite of intelligent business applications, rebranding Dynamics CRM into modular offerings like Dynamics 365 for Sales and Customer Service, while transforming Dynamics AX into Dynamics 365 for Operations. This rebranding emphasized a modular, app-based architecture over siloed products, allowing organizations to select and combine specific capabilities such as sales, finance, or operations without committing to a full suite. The launch introduced a subscription-based licensing model, shifting from perpetual licenses to named user subscriptions priced per app or plan, which facilitated flexible scaling and cloud delivery. Subsequent milestones accelerated the platform's evolution toward intelligence and connectivity. In the 2019 release wave, Microsoft introduced AI Builder as a low-code tool within the Power Platform, enabling users to incorporate AI models for tasks like form processing and prediction without deep technical expertise, marking a step toward embedded AI across Dynamics apps. By the 2020 release wave 2, integrations with Microsoft Teams were enhanced to support remote work, including virtual events in Dynamics 365 Marketing and collaborative workspaces for sales teams to access CRM data directly within chats and meetings. The transition unified the platform around cloud-native SaaS delivery, migrating customers from on-premises deployments to a centralized ecosystem. Microsoft Dataverse emerged as the core data layer, providing a secure, scalable repository that replaced legacy databases like those in AX, enabling seamless data sharing across apps and integrations with external systems. This shift was propelled by the end of extended support for Dynamics AX 2012 R3 in January 2023, which encouraged migrations to Dynamics 365 Finance and Operations for continued security and updates. Development practices evolved from the traditional X++ language and MorphX IDE in AX to the low-code/no-code tools of the Power Platform, including Power Apps and Power Automate, broadening accessibility for customizations beyond specialist developers. By 2025, this unified approach drove substantial adoption, with Dynamics 365 powering over 70,000 organizations globally and the Power Platform reaching 56 million monthly active users, largely fueled by small and medium-sized businesses (SMBs) accessing affordable entry points like Dynamics 365 Business Central, which surpassed 45,000 customers.

Release Cycles and Updates

Biannual Release Waves

Microsoft Dynamics 365 follows a biannual release cadence consisting of two waves per year, Wave 1 spanning April through September and Wave 2 spanning October through March, a practice established starting in 2019. This structured timeline allows Microsoft to deliver updates systematically, with organizations able to opt in to new features via sandbox environments for testing, while production environments receive mandatory updates upon general availability to ensure consistency and security. The planning process for these releases is transparent and collaborative, featuring public roadmaps published on Microsoft Learn that detail upcoming features. Features progress through defined phases: preview for initial testing, early access for broader validation, and general availability for full deployment, enabling customers to provide feedback and prepare accordingly. Updates primarily introduce new capabilities and enhancements while also announcing deprecations, with a strong emphasis on non-breaking changes to maintain system stability and minimize disruptions for users. To facilitate adoption, Microsoft provides tools such as the Release Planner app, which helps organizations track and prioritize updates, along with What's New hubs for exploring changes and automated upgrade paths that streamline the rollout process. For 2025, Wave 1 (April–September) emphasizes AI agents and Copilot integrations across applications like Sales, Customer Service, and Finance to enhance productivity and automation. Wave 2 (October 2025–March 2026) focuses on extensibility, including advancements in agentic capabilities, omnichannel support, and customization options, particularly in areas like Contact Center. As of early 2026, no public preview or detailed feature list is available for the 2026 release wave 1 (April–September 2026) of Dynamics 365 Business Central. Microsoft typically publishes release plans approximately six months before the wave begins, so details are expected to have been released in late 2025. The latest available release plans cover up to the 2025 release waves.

Major Feature Introductions (2016-2025)

The launch of Microsoft Dynamics 365 in November 2016 marked the unification of CRM and ERP capabilities into a cloud-based platform, introducing initial AI features to enhance user interactions. Relationship analytics in Dynamics 365 Sales, powered by AI-driven sentiment analysis of email and communication data, was introduced to provide insights into customer relationships, helping sales teams identify opportunities and risks based on interaction history. This feature leveraged natural language processing to score relationships on a scale, enabling proactive engagement. In 2016, canvas apps became generally available as part of PowerApps, allowing low-code creation of custom user interfaces connected to Dynamics 365 data, which democratized app development for business users without deep technical expertise; these apps later formed a core part of the Power Platform launched in 2018. From 2019 to 2021, Dynamics 365 emphasized AI-driven automation and integration. Virtual agents in Customer Service debuted in preview in May 2019, evolving into general availability in January 2020 as part of Power Virtual Agents, enabling organizations to build conversational AI bots for self-service resolution of common queries using natural language understanding integrated with Dynamics 365 data. Dual-write integration, generally available in March 2020, facilitated near-real-time, bidirectional data synchronization between ERP (Finance and Operations) and CRM applications via the Common Data Service, reducing silos and ensuring consistent data across modules. Sustainability dashboards emerged in preview with the announcement of Microsoft Cloud for Sustainability in 2021, providing tools to track emissions and environmental metrics integrated with Dynamics 365 Finance, supporting ESG reporting and operational insights. Between 2022 and 2024, advancements focused on generative AI and industry-specific enhancements. Copilot integrations, announced in March 2023, brought natural language processing to Dynamics 365 Sales, Service, and Finance, allowing users to generate summaries, emails, and insights conversationally, with general availability rolling out across apps by late 2023. Industry clouds, building on the 2020 announcement of Microsoft Cloud for Industry, expanded in 2022-2024 with tailored solutions for sectors like healthcare, retail, and manufacturing, incorporating pre-built accelerators and AI models aligned to vertical needs. Advanced manufacturing features in Supply Chain Management, introduced in the 2023 release wave, included AI-optimized production planning and predictive maintenance, enabling real-time adjustments to supply chains for efficiency. In the 2025 release waves, Dynamics 365 advanced toward agentic AI. Wave 1 (April-September 2025) introduced AI agents for autonomous task execution, such as processing orders and generating reports via natural language prompts, alongside e-document automation for streamlined invoice and compliance processing in Finance. Wave 2 (October 2025-March 2026) enhanced supervisor tools in Customer Service with AI-driven analytics for team performance and introduced generative AI extensibility, allowing custom model integrations for tailored workflows. These updates emphasize agentic AI for proactive operations and ethical data practices, including bias detection in AI models to ensure responsible use. Overall, these feature introductions have driven significant productivity gains, with AI capabilities in Sales accelerating cycles through automated insights and reduced manual tasks, while prioritizing ethical AI governance for trustworthy deployments. As of early 2026, no public preview or detailed features list is currently available for the 2026 release wave 1 (April-September 2026), including for Dynamics 365 Business Central. Microsoft typically publishes release plans approximately six months before the wave begins, so details are expected in late 2025. The latest available release plans cover up to 2025 release waves.

Deployment and Licensing

Deployment Models

Microsoft Dynamics 365 primarily operates as a cloud-based Software as a Service (SaaS) offering, hosted entirely by Microsoft on Azure infrastructure across global data centers. This model provides automatic updates, elastic scalability to handle varying workloads, high availability with a 99.9% uptime service level agreement, and built-in disaster recovery features, all managed through Dynamics Lifecycle Services (LCS) for deployment and ongoing operations. Customers benefit from seamless integration with other Microsoft services like Azure AI and Power Platform, without the need for local hardware investments, enabling rapid provisioning in supported Azure regions such as East US and West Europe. On-premises deployment remains available but is limited to specific applications like Dynamics 365 Finance and Operations, where organizations host the software in their own data centers using Microsoft Azure Stack HCI or Hub for infrastructure. In this self-managed model, customers handle all aspects of hardware sizing, high availability, disaster recovery, and updates, while leveraging LCS for lifecycle management, monitoring, and patching; however, it does not support public cloud hosting like Azure virtual machines and may involve some data transfer to external services for integrations. This option suits scenarios requiring strict regulatory compliance or leveraging existing on-premises investments, though it demands significant IT resources compared to cloud equivalents. Hybrid deployments combine cloud and on-premises elements, often for data residency needs, gradual migrations, or specialized topologies like distributed setups in supply chain management, where a central cloud hub extends to edge or on-premises scale units. Planning and orchestration occur via LCS, allowing organizations to maintain core data on-premises while utilizing cloud scalability for certain workloads, such as integrating legacy systems during transitions. This approach supports business continuity in regions without full Azure coverage and facilitates phased moves to full cloud, though it requires careful configuration to ensure security and compliance across environments. Implementation of Dynamics 365 involves guided setup processes through LCS, which provides project management tools, environment provisioning, and configuration templates to streamline initial deployment. For data migration from legacy systems like Dynamics AX to Finance and Operations, organizations use data entities, configuration data packages, and tools such as the Data Management Framework, Azure Data Factory, or SQL Server Integration Services (SSIS) to transfer master data (e.g., customers, products) and open transactions, with testing in dedicated sandbox environments to validate integrity and minimize disruptions. This structured approach, including golden configuration environments for reusable setups like tax codes, ensures alignment with business processes from planning through go-live. As of 2025, Microsoft emphasizes a full cloud push for Dynamics 365, with widespread adoption driven by the managed service benefits and over 85,000 global organizations utilizing the platform, reflecting a shift from legacy on-premises models. Emerging trends include enhanced edge computing integrations, particularly for Dynamics 365 Field Service, where distributed topologies enable real-time processing closer to field operations for improved technician productivity and scheduling in remote or low-connectivity scenarios.

Licensing and Editions

Microsoft Dynamics 365 employs a subscription-based licensing model primarily centered on named user subscriptions, where access is granted per individual user on a per-month basis. This approach allows organizations to scale licensing according to their workforce needs, with options for full access to core functionalities or limited roles for peripheral users. Full user licenses provide comprehensive capabilities within specific applications, while limited licenses, such as Team Members, restrict users to read-only views, basic data entry, and dashboard access without advanced editing or automation rights. Editions of Dynamics 365 are tailored to different organizational sizes and requirements, ranging from starter packages for small and medium-sized businesses (SMBs) to advanced suites for enterprises. For instance, Dynamics 365 Business Central offers Essentials for basic financial and operational management, and Premium for additional manufacturing and service features. Similarly, Dynamics 365 Sales includes Professional for core sales automation, Enterprise for enhanced analytics and AI-driven insights, and Premium for integrated relationship management tools. Customer Service editions progress from Professional for standard case handling to Enterprise with AI-powered routing and Premium bundling contact center capabilities like voice and chat channels. App-specific bundles, such as Sales + Marketing or Finance + Operations, combine multiple modules into cohesive packages, enabling users to license only the relevant applications rather than the entire suite. Pricing follows tiered structures starting at approximately $50 per user per month for entry-level editions and scaling to $300 for premium enterprise options, with most plans billed annually for discounts. The following table illustrates representative 2025 pricing for key applications (USD per user/month, paid yearly; prices may vary by region and currency):
ApplicationEditionPrice (USD/user/month)Key Inclusions
Business CentralEssentials$80Finance, sales, inventory; 3GB storage (effective Nov. 1, 2025)
Business CentralPremium$110All Essentials + manufacturing; 5GB storage (effective Nov. 1, 2025)
SalesEnterprise$105AI insights, forecasting; includes Copilot in Sales
SalesPremium$150All Enterprise + relationship sales; includes Copilot
Customer ServiceProfessional$50Case and knowledge management
Customer ServiceEnterprise$105All Professional + Copilot, analytics
Customer ServicePremium$195All Enterprise + contact center (voice/chat)
Supply Chain ManagementStandard$210Core supply chain, AI/ML
Supply Chain ManagementPremium$300All Standard + full demand planning
Attach licenses allow adding secondary applications to a base license at reduced rates, such as $20 per user per month for Customer Service when paired with a Business Central Premium base. Volume licensing through Enterprise Agreements provides negotiated discounts for large deployments, often including dual-use rights for cloud and on-premises scenarios. Add-ons enhance core licenses with specialized capacities, such as additional Dataverse storage in 1GB increments or Power Apps runtime for custom extensions. AI features like Copilot are included in many Enterprise and Premium editions (e.g., unlimited conversation intelligence in Sales Premium), but advanced integrations, such as Microsoft 365 Copilot for Sales, require separate purchases starting at additional per-user fees and prerequisite Microsoft 365 licenses. Device licenses, priced lower (e.g., $45 per device per month for Business Central), support shared access in scenarios like point-of-sale systems without individual user assignments. Licensing has evolved significantly, with a pivotal shift to per-app models in 2018 that replaced bundled CRM/ERP suites with modular subscriptions, allowing greater flexibility and cost alignment to specific business functions. By 2025, updates include increased storage allocations in Business Central tiers effective November 1 and expanded Copilot inclusions across premium editions, reflecting ongoing integration of AI at an additional cost for full capabilities.

Support Lifecycle

Support Policies

Microsoft provides three primary support tiers for Dynamics 365 users, tailored to different needs and levels of service. The included support, bundled with every Dynamics 365 subscription, offers basic break-fix assistance through self-service resources and next-business-day response times for incidents. Professional Direct support, available as a paid add-on starting at $9 per user per month (minimum 20 users), provides unlimited 24/7 break-fix support with initial response times under one hour for critical issues, suitable for production environments requiring direct technical assistance. Premier (now part of Unified Support) is a premium, proactive option with custom pricing, including dedicated account management, advisory services, and escalation paths, ideal for enterprise-scale deployments needing ongoing optimization and faster resolutions across Microsoft technologies. Support channels for Dynamics 365 encompass a mix of direct and self-help options to address user queries efficiently. Critical issues receive 24/7 access via phone or chat for Professional Direct and Premier tiers, while standard support uses web-based incident submission through the Dynamics 365 Admin Center. Self-service resources include comprehensive documentation on Microsoft Learn, troubleshooting guides, and free community forums such as the Dynamics 365 Community for peer-to-peer discussions and knowledge sharing. Additionally, enterprise users can leverage the Microsoft Viva Engage (formerly Yammer) communities for collaborative problem-solving. For service updates, Microsoft allows a limited opt-out period, enabling customers to pause or delay one update per release cycle via Lifecycle Services (LCS), with a minimum requirement of two updates annually to maintain compliance. This provides a 30-day window post-release for evaluation before mandatory adoption, ensuring backward compatibility for customizations. Enterprises benefit from assisted rollout programs, including preview environments in LCS and the First Release initiative, which offer early access to updates with guided testing and regression tools like the Regression Suite Automation Tool (RSAT). Service Level Agreements (SLAs) for Dynamics 365 cloud services guarantee 99.9% monthly uptime, with financial credits issued if thresholds are not met. Response times vary by severity: critical (Severity A) incidents receive attention within one hour on a 24/7 basis, moderate (Severity B) issues within two to four hours, and minimal (Severity C) problems during business hours (typically 9 AM to 5 PM local time, weekdays). These commitments apply to online deployments, emphasizing connectivity and availability for core applications. In 2025, Microsoft has enhanced Dynamics 365 support policies with AI-driven troubleshooting capabilities, including Copilot integrations for faster issue diagnosis and agent activity feeds in Customer Service to monitor and resolve support tickets proactively. These updates build on the partner ecosystem, where certified Microsoft partners provide customized support extensions, such as implementation assistance and specialized consulting, complementing core Microsoft channels.

End-of-Life Timelines

Microsoft Dynamics 365 follows the Modern Lifecycle Policy for its cloud-based deployments, providing continuous support including security updates, bug fixes, and new features as long as customers remain current with biannual release waves. For on-premises deployments and legacy products, the Fixed Lifecycle Policy typically applies, offering five years of mainstream support followed by five years of extended support, during which only security updates and limited hotfixes are provided. This structure encourages transitions to cloud versions to access ongoing innovations, such as AI-enabled capabilities in recent waves. Legacy products like Microsoft Dynamics AX 2012 have reached or exceeded their support endpoints. For Dynamics AX 2012 R3, mainstream support ended on October 12, 2021, and extended support concluded on January 10, 2023, after which no further updates or security fixes are available. Similarly, Microsoft Dynamics NAV 2018 on-premises saw mainstream support end on January 10, 2023, with extended support continuing until January 11, 2028, though Microsoft recommends upgrading to Dynamics 365 Business Central for full feature parity and cloud benefits. For Dynamics 365 Business Central on-premises, support timelines vary by release wave and policy. Versions under the Fixed Lifecycle Policy, such as the April 2019 Update (version 14.x), had mainstream support end on October 10, 2023, with extended support concluding on October 14, 2025. Under the Modern Lifecycle Policy, applicable to 2019 release wave 2 and later, each major update receives 18 months of support from its release date; for example, the 2020 release wave 1 (version 16.x) ended support on April 12, 2022, the 2023 release wave 2 (version 23.x) concluded on April 2, 2025, and the 2024 release wave 1 (version 24.x) on October 7, 2025. The 2025 release wave 1 (version 26.x) is supported until October 13, 2026, and the 2025 release wave 2 (version 27.x) until April 6, 2027. Microsoft encourages migration from legacy on-premises versions to cloud deployments as support ends for those, while continuing support for current on-premises releases under applicable policies, with all legacy on-premises versions encouraged to migrate to avoid disruptions. The following table summarizes key end-of-support dates for select Business Central on-premises releases:
Release WaveVersionPolicyEnd of Support Date
2025 Wave 126.xModernOctober 13, 2026
2025 Wave 227.xModernApril 6, 2027
April 201914.xFixedOctober 14, 2025
Migration from legacy or on-premises versions to Dynamics 365 cloud involves tools like the Configuration Migration Tool for exporting setups from AX or NAV, and the Cloud Migration process for Business Central, which transfers data from on-premises databases to online tenants. The Data Migration Assistant assesses compatibility and moves schema and data during upgrades. Microsoft offers incentives through the Adoption and Impact Migration (AIM) program, including free assessments and guidance to facilitate cloud transitions, particularly for organizations impacted by 2025 endpoints like the shift of 2020 wave 2 features into sustained engineering post-October 2025. These paths ensure minimal downtime while enabling access to AI-driven updates in current Dynamics 365 versions.

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