July 11, 2006 7:24 AM PDT

Microsoft streamlines ERP pricing

Microsoft has introduced per-user prices for its enterprise resource planning applications, in a move that reflects a growing desire to move away from highly complex pricing strategies for corporate software.

The Business Ready Licensing model and the Business Ready Enhancement Plan introduced Monday for the Microsoft Dynamics financial applications portfolio are intended to improve the "value of the licensing and maintenance programs," the company said.

The Dynamics portfolio is complex and based on four main lines of code: Nav, GP (originally Great Plains), AX and SL.

Instead of basing price on hundreds of modules, Microsoft will now base pricing for parts of the Dynamics portfolio on the number of people who concurrently use the software. The aim appears to be to lower the barrier of entry for smaller companies by reducing the price and complexity and including only functionality that will actually be used.

Microsoft said that its new approach is made up of three packages: Business Essentials, Advanced Management and Advanced Management Enterprise.

The "most common functions" will be bundled in the Business Essentials package, which will have an "entry-level" price of about $2,246 per user before volume discounts. Included will be general ledger, accounts receivable, accounts payable, fixed assets and consolidations, and "other core financial management and inventory functions," according to Gayle Hoshino, the general manager of Microsoft Business Solutions.

The midrange Advanced Management edition will start at about $3,977 per user and will include more functionality in areas such as manufacturing, project management, and some integral customer relationship management (CRM) sales and marketing functions. Microsoft's own Dynamics CRM application is not included, though.

Advanced Management Enterprise adds extra supply-chain planning software and will continue to be priced per server. Overall price depends on the modules purchased, Microsoft said.

Colin Barker of ZDNet UK reported from London.

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