Dynamics 365 Business Central: licenses, user types and deployment options

Aug 20, 2020

With the many options it presents, navigating the world of Dynamics 365 Business Central can get confusing. In order to help you determine what’s right for you, we’ve prepared a short guide for the types of licenses, user types and deployment options the solution offers. Read on to learn more.

What is Dynamics 365 Business Central?

Since you’re reading this blog post, chances are that you already know. That’s why we’ll keep it short: Dynamics 365 Business Central is an ERP system and the successor of Dynamics NAV, a solution that aims to increase the productivity of small to medium-sized businesses.

Let’s talk about licenses

Currently Dynamics 365 BC licenses come with two available plans – Essential and Premium. You can think of the former as a type of “starter pack” – it covers basics like Financials, CRM, Supply Chain Management, Human Resources Management, Project Management, and Warehouse Management. The latter gives you the added value of all the modules from Essential plus Service Management and Manufacturing.

Tip: Learn more from our Dynamics 365 BC capability guide

It’s important to keep in mind that Essential and Premium users cannot be combined – the customer must purchase either only Essential users or only Premium users.

There are two types of licenses: a perpetual one and a subscription-based one. With a perpetual license, you are being granted permanent usage rights after an upfront payment. This is a good option if your company wants to manage your solution internally (run the software on your own infrastructure because you have strict security guidelines in place, for example.)

A subscription-based license gives you non-perpetual rights to the software – usually these last as long as the term of an agreement between your company and the vendor or as long as periodic payments are made to your solution partner. This model gives you relatively more flexibility than the perpetual one and requires a much smaller initial investment.


Dynamics 365 BC is available as an on-prem, IaaS, and SaaS solution. Let’s lay out the main differences:


Source: Totovic Dynamics Blog


As the name suggests, on-prem is when you deploy your solution on private servers at a physical location. This gives you full control over the management of your data storage. On-prem deployment is available with a perpetual license.


In-cloud deployment (also known as the Infrastructure-as-a-Service model, or IaaS) is currently the most popular option out of the three. Here’s what it means: the whole basic infrastructure, software, middleware and data of your ERP solution will be stored and managed in а cloud computing platform, like Azure or another cloud. This option provides you with both information security and more flexibility – you can add more users or integrate more applications whenever you want.

Tip: For more info about the cloud, check out our e-book.

In-cloud deployment is available through both a subscription-based license and a perpetual one.


With the Software-as-a-Service deployment model (as well as with IaaS), users can access the ERP solution through a web browser, while the application itself is being handled by the provider. The SaaS model works on a subscription basis and ensures that the servers, infrastructure and software updates are all managed by Microsoft, as it is hosted in Azure. It significantly lowers any hardware costs and internal workload of the IT department.


Source: Totovic Dynamics Blog

Have any questions about Microsoft Dynamics 365 Business Central or licensing? Contact us to get answers.

Categories: ERP

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About the author
Kalina Stamatova
Kalina is a marketing professional specializing in copywriting and content marketing. An avid reader, she also has experience working in advertising and enjoys theater.