Dynamics GP Hosting Options and Costs

This article will explain the options available for hosting Microsoft GP and provide considerations for each. We will also calculate the 3-year total cost of ownership and uncover hidden costs often not considered.

The scenario used for calculating the total cost of ownership is 5 full users, Extended Pack, and an annual GP upgrade to stay on the current version. All costs quoted will be in Canadian dollars and are subject to change.

On-Premise – Hosted on Your Own Hardware

On-Premise is a common scenario especially for organizations that purchased GP years ago. Purchasing the software through the Microsoft perpetual model and paying the annual enhancement fee is the software model for on-premise installs. An additional annual enhancement fee applies which grants access to the latest GP software at no additional cost. However, performing the actual upgrade on the instance typically requires a partner and carries a cost.This model requires server hardware, Windows operating systems and the installation/maintenance of all software. Most customers on this model are moving to GP365 since its release.

Buy perpetual licenses and pay annual enhancement fee to Microsoft
Pay partner to upgrade GP when new versions are out
Support is through a partner and generally on an hourly or bucket basis
Responsible for maintenance and backup of GP, Windows, SQL
No access to GP365 Apps (Time/Expense Center, Integration Center, Budget Center)
Hosted wherever your data center or servers are located

Considerations: PRO – Full control over hardware PRO – Lower recurring annual fees CON – Costly GP upgrades that often can cost much more than $5,000 CON – Responsible for all hardware, hosting, compliance, maintenance and backup costs. CON – Cost for installation of GP CON – Unexpected and costly support issues related to keeping GP online

GP365 – Cloud Software as a Service (SaaS Model)

We created GP365 out of a market need for hosting GP as a fixed price, secure, Software-as-a-Service model. GP365 resides within Microsoft’s secure and compliant data center. GP365 customers have full access to GP from anywhere with an internet connection. Existing customers can either bring their own licensing or move to a subscription model – we will calculate both methods for you so you can decide which is cheaper. The move from On-Premise or another hosting provider to GP365 is planned out and done off hours so that the next working day is seamless.

Existing customers can bring your existing licensing or transition to subscription licensing. (Subscription is cheaper for new customers and usually for existing)
Automatically kept on the latest version of GP, free of charge
Subscribe to “Unlimited Ask-An-Expert” support for $100/month, buy a bucket of time or use your current GP partner
Includes all GP, Windows operating systems, SQL backup, and maintenance
Free GP365 Apps (Time/Expense Center, Integration Center, Budget Center)
Hosted by Microsoft’s in their complaint and redundant top-tier datacenter (Canada & USA)

Considerations: PRO – No expensive upfront or unexpected costs, everything is fixed price PRO – Lower total cost over 3 years PRO – Worry-free, anywhere access to GP PRO – No setup fees or database/storage charges or additional hidden costs CON – No access to hardware or operating systems

Hosted by 3^rd Party – Shared or Dedicated Cloud Hosting (Example: RoseASP)

Before GP365, this was the only option which is why many organizations chose it that did not want the burden of dealing with hardware or hosting. Shared/Dedicated GP hosting has many different scenarios that all involve the same concept – your GP instance in another organization cloud who maintains it. Some hosting providers will allow you to bring your existing licensing or move to subscription licensing. Majority of customers on this model seem to be transitioning to GP365 because of the lack of innovation and apps with the other models.

Buy perpetual licenses and pay annual enhancement fee to Microsoft (some hosting providers may have a subscription license offer such as RoseASP)
Pay partner to upgrade GP when new versions are out
Support is through a GP partner and generally on an hourly or bucket basis
Typically, responsible for maintenance and backup of GP, Windows, SQL
No access to GP365 Apps (Time/Expense Center, Integration Center, Budget Center)
Hosted by 3^rd party wherever their datacenter resides

Considerations: PRO – No hardware costs or worries CON – Costly GP upgrades that often can cost much more than $5,000 CON – No access to hardware or operating systems CON – Hidden fees typically for additional storage or databases, using add-ons and integration CON – Cost for setup or migration

Total Cost of Ownership (3-Year Period) Model

We created a cost of ownership chart which outlines each of the three hosting options for both new GP customers and existing GP customers. New customers will acquire GP for the first time. Existing customers must already own GP. (This requires being current on the annual enhancement plan) All data sets included for transparency.

Description	Year 1 Costs	Year 2 Costs	Year 3 Costs	TCO 3 Years
On-Premise – New GP Customer	$42,665.00	$11,248.00	$11,248.00	$65,161.00
GP365 – New GP Customer	$14,880.00	$14,880.00	$14,880.00	$44,640.00
Hosted by 3rd Party – New GP Customer	$32,200.00	$24,700.00	$24,700.00	$81,600.00

On-Premise – Bring Existing GP Licensing	$22,328.00	$12,328.00	$12,328.00	$46,984.00
GP365 – Bring Existing GP Licensing	$11,700.00	$11,700.00	$11,700.00	$35,100.00
Hosted by 3rd Party – Bring Existing GP Licensing	$28,000.00	$20,500.00	$20,500.00	$69,000.00

On Premise – Total Cost of Ownership Data

Costs Year 1: Starter Pack 3-Users $6,167 + Extended Pack $12,333 + 2 Additional Full Users $7,400 + SQL Runtime $518 + GP Annual Enhancement Fees $4,248 + Server/Windows $10,000 + IT Maintenance Expenses $2,000
Costs Year 2: GP Annual Enhancement Fees $4,248 + IT Maintenance Expenses $2,000 + GP Version Upgrade Estimate $5,000
Costs Year 3: GP Annual Enhancement Fees $4,248 + IT Maintenance Expenses $2,000 + GP Version Upgrade Estimate $5,000
Total 3 Year Cost New Customers: Year 1 $42,665 + Year 2 $11,248 + Year 3 $11,248 = $65,161
Total 3 Year Cost Existing Customers: $22,328 Year 1 + $12,328 Year 2 + $12,328 Year 3 = $43,744

GP365 – Total Cost of Ownership Data

Costs Year 1: 5 Full GP365 Users Including Software Costs $14,880 (Existing customer BYOL $11,700)
Costs Year 2: 5 Full GP365 Users Including Software Costs $14,880 (Existing customer BYOL $11,700)
Costs Year 3: 5 Full GP365 Users Including Software Costs $14,880 (Existing customer BYOL $11,700)
Total 3 Year Cost New Customers: Year 1 $14,880 + Year 2 $14,880 + Year 3 $14,880 = $44,640
Total 3 Year Cost Existing Customers: Year 1 $11,700 + Year 2 $11,700 + Year 3 $11,700 = $35,100

3rd Parting Hosting – Total Cost of Ownership Data

Costs Year 1: GP Hosting and Licensing 5 Users $21,000 + ISV/add-on Install $3,000 + Migration Fee $4,500 + Integration Web services fee for year $3,700
Costs Year 2: GP Hosting and Licensing 5 Users $21,000 + Integration Web services fee for year $3,700
Costs Year 3: GP Hosting and Licensing 5 Users $21,000 + Integration Web services fee for year $3,700 Total
3 Year Cost New Customers: Year 1 $32,200 + Year 2 $24,700 + Year 3 $24,700 = $81,600
Total 3 Year Cost Existing Customers: $28,000 Year 1 + $20,500 Year 2 + $20,500 Year 3 = $69,000