Microsoft's new direction with ERP part 1: The history of Microsoft ERP

Big changes have been happening at Microsoft regarding its ERP applications over the past three years.  This has caused a lot of confusion and uncertainty among current Microsoft ERP clients as well as organizations looking to purchase Microsoft ERP systems. 

The good news is that the Microsoft ERP market uncertainty has now been cleared up.  We are finally in a place where Microsoft ERP customers and prospects can make ERP solution choices with confidence, knowing that the decisions that they make today will set them up for success for decades in the future.  The purpose of this blog series is to clear up many of the misconceptions in the market today and to provide detailed information that will help decision makers choose the best path going forward. 

See parts two and three of this series to learn about where Microsoft currently is and what direction your organization should take based on which system you are using.

The history of Microsoft ERP 

The story of Microsoft ERP begins with the advent of the personal computer in the early 1980’s.  At that time, many developers foresaw a significant business opportunity in the new PC based accounting software space.  Between 1983 and 1984, the predecessors of four new accounting systems hit the market:  Axapta and Navision, based in Denmark, and Great Plains and Solomon, based in the United States. 

By the mid-1990’s all four applications had evolved into windows-based, multiuser solutions. Each enjoyed a rapidly growing user base – Great Plains and Solomon in the US, and Axapta and Navision in Europe. 

Between 2001 and 2002, Microsoft acquired the four applications in an effort to grow beyond its core infrastructure business and move into the business applications market.  Microsoft rebranded all the applications to fit into its new Dynamics practice.  Axapta became Dynamics AX, Great Plains became Dynamics GP, Navision became Dynamics NAV, and Solomon became Dynamics SL.  At the same time, Microsoft released version 1.2 of Microsoft CRM, its new customer relationship and sales management solution.  In 2005 Microsoft added CRM to its business applications business, rebranding it to Dynamics CRM. 

Fast forward to 2014.  All five applications in the Microsoft business applications market are growing at a healthy pace.  Dynamics CRM is now solidly cloud based, and Microsoft is looking to move its ERP systems to the cloud.  Dynamics AX is the only ERP system built for large enterprise organizations, so it is an easy decision for Microsoft to choose to redevelop it for the cloud. 

A big question remained in the mid-market, however.  Which of the three mid-market applications should be developed for the cloud?  Dynamics SL was a relatively limited application focusing on project driven businesses, so it would not be chosen.  Dynamics GP and Dynamics NAV were both strong mid-market ERP applications with large numbers customers, but they were built on two different code bases.  Microsoft selected the code base that was easiest to get to the cloud – Dynamics NAV. 

In May 2016 Microsoft released a limited version of SaaS NAV code named Project Madeira.  In April 2018 Microsoft released the first full version of SaaS NAV, branding it Business Central.  In October 2018 Microsoft announced that the name Dynamics NAV would be retired, and that Dynamics NAV 14.0 – cloud or on premise – would be called Business Central going forward. 

So today Microsoft supports four mid-market ERP applications:  Dynamics GP, Dynamics SL, Dynamics NAV (legacy), and Dynamics 365 Business Central. 

Below is a summary of current branding of all Microsoft business applications:

Dynamics GP

Original Branding: Great Plains
Mid-2000’s Branding: Dynamics GP
Current Branding: Dynamics GP
Market Emphasis: Mid-Market ERP

Business Central

Original Branding: Navision
Mid-2000’s Branding: Dynamics NAV
Current Branding: Business Central
Market Emphasis: Mid-Market ERP

Dynamics SL

Original Branding: Solomon
Mid-2000’s Branding: Dynamics SL
Current Branding: Dynamics SL
Market Emphasis: Mid-Market Project Management

Dynamics 365 for Finance and Operations

Original Branding: Axapta
Mid-2000’s Branding: Dynamics AX
Current Branding: Dynamics 365 for Finance and Operations
Market Emphasis: Enterprise ERP

Dynamics 365

Original Branding: Microsoft CRM
Mid-2000’s Branding: Dynamics CRM
Current Branding: Dynamics 365 for Sales, Marketing, and Service
Market Emphasis: Customer Relationship Management

Learn about where Microsoft ERP currently is and what deployment options are available in part two of this blog series.