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Directions EMEA 2021 Milan is over and with that, I would like to share my reflections on the main announcements made. I know that many of our Partners could not join or you missed some pieces, so I would like to recoup the main points.
1. LIMITATIONS. Microsoft has worked hard to reassure everyone that Business Central can be used for enterprise solutions, that it can be easily scalable and the reassure was done in the following ways:
a) Continuous performance improvements – what I would call ‘bugfixing’ the current known performance issues were presented on stage for how quickly you can now enter data in the online version of Business Central. Also, some performance improvement numbers were shared:
b) Performance tuning features introduced:
– Add keys to base tables using table extensions
– Partial record loading in AL
– New index features included columns and non-clustered column store indexes
– OData callers can specify read-only intent to give more read capacity for integrations
c) BC compute capacity and database capacity scales up automatically, there are no hard limits on transactions, users, sessions – only AL code making database calls can prevent easy scaling:
d) Also no hard limits on upgrading to Business Central SaaS (see below under Migrations) so that any solution could be migrated. Although I’d like to point out the upload speed and the current storage pricing, that still applies!
2. APPSOURCE APPS. Working hard on shifting the Business Central partner customization writing model to scalable AppSource apps model:
a) Introducing automated technical app validation:
b) 1800+ BC apps in AppSource in just a few years:
3. ONBOARDING. Improving the onboarding experience for new Business Central users with the new onboarding framework for Partners (click on the image to enlarge):
4. MIGRATIONS. With the announcement of migration toolkit availability for Business Central v19, Microsoft has announced that:
a) There will be no hard limit on maximum upload size for migrating database (although remember the upload speed limitation and storage costs). We know that there was no limit before but there was still recommended to keep under 80 GB for migrations so now the recommendation is gone:
b) Reminder of the new Bridge to Cloud Promotion for license conversion from September 1st. If you have missed the news, Bridge to Cloud is a promotion beginning on September 1, 2021, and enrollment expiring on June 30, 2022. Eligible for on-premises DPL licenses (Dynamics BC, NAV, GP, SL) where the upgrading customer, if active on their Enhancement Plan, has enough time to transition (dual rights), and receives a 60% discount on new CSP licenses during the period of 4 years. Eligible customers have to commit to paying the equivalent of yearly BREP fee for the discounted licenses.
5. OTHER ANNOUNCEMENTS worth mentioning:
a) Partner sandbox coming this year for $6/user;
b) Improved telemetry for BC users;
c) Barcodes and QR codes coming to Business Central coming this year;
d) No Business Central license with Teams license. Comment on Satya’s promise in Inspire 2021 to deliver Dynamics 365 license free together with Teams license – confirmation that this will not affect Dynamics 365 Business Central.
Improvements set for next release:
Focus area for the next release:
On their traditional Partner Survey, “Partner Economics” has compiled the data and delivered an interesting perspective on where does a median Dynamics BC reseller stands today and what is out there for the future. Some of the highlights from the sessions.
Covid effect on margins, the picture below says it all (the percentage below show the actual margins and not the change, i.e. the median EBITDA is going down and is currently at 6.5%):
What’s more interesting is how you can explain why the median EBITDA has shrunk. Apparently, the median billable hours for the billable resource have decreased from 971 hours in 2019 to only 804 hours in 2021. Also, median billable resource cost is increasing and billable hourly rates are decreasing (both inflation-adjusted). While sales expenditure % for median Partner is decreasing and median revenue per full-time resource increases it does not help to keep the EBITDA at a higher level. And to make it worse, the average project size is getting lower every year.
Having said all of the above, “Partner Economics” have observed a gradual decline of gross margins and profitability for the median reseller over the past decade and continue to forecast the same for the coming future, even going as far as claiming the ‘billable hour’ model to be dead in a decade, that most of the resellers will have an output based charge for their end-customers.
Please keep in mind that this is the opinion of “Partner Economics” and we may not share the same opinions but nevertheless, very interesting points were made.
Below image shows the current metrics for median Partner on the left and the current risks as seen by “Partner Economics”:
On a positive note, many of the Dynamics Partners are switching to the SaaS model. The switch is still very slow with the majority of the Business Central Partners still having a fraction of their business done on a non-recurring model as can be seen in this Directions survey:
However, the picture has significantly changed from 2019, as surveyed by “Partner Economics”, Dynamics resellers have doubled their recurring revenue:
As shown during the keynote and by “Partner Economics”, the absolute outstanding Dynamics Business Central Partner worry today is finding services delivery talent: over 80% of surveyed Partners have marked this as their top worry. Fortunately, part of Simplanova’s business is supplying you with Dynamics 365 Business Central talent.
If you cannot find the right Business Central talent for your project pipeline, be it migrations, AL development, or Power Platform, contact us and we’ll help you find a solution.
The post Directions EMEA 2021 Reflections: What’s Coming to Business Central? appeared first on Simplanova.
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