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Introduction to Dynamics 365 Business Central on-premises

Microsoft Dynamics 365 Business Central on-premises fits the needs of midsize businesses with core business needs. It helps organizations connect their financials, sales, purchase, inventory, projects, service, and operations.

With Dynamics 365 Business Central on-premises, you must license at least one of Dynamics 365 Business Central Essentials or Dynamics 365 Business Central Premium users. Additional access to the service functionality by other users is licensed with Dynamics 365 Business Central Team Members.

Dynamics Business Central functionality is delivered through the Dynamics 365 Business Central Essentials or Premium User.

Dynamics 365 Business Central on-premises license

Dynamics 365 Business Central on-premises is licensed through one of two licensing models: Perpetual Licensing and Subscription Licensing.

With Perpetual Licensing, you license the software with permanent usage rights. So, you can use the licensed version of the software for as long as you choose. Perpetual Licensing might be for you if you prefer an upfront investment or if you want to manage the solution internally, and will run the software on your premises (or, subject to license mobility rights, have it hosted by a third party Infrastructure as a Service [IaaS] provider acting as your agent).

With Subscription Licensing, you license non-perpetual rights to use the software, meaning you can use the software only during the term of the agreement secured by periodic payments. This model lowers your initial licensing costs and provides you with the flexibility to increase or decrease subscription license counts from one subscription term to the next. You can use Subscription Licensing when you want to have the ERP solution hosted and managed as Software as a Service (SaaS) by your partner or any third party. Alternatively, the software may be deployed on your premises, provided that your Dynamics 365 Business Central on-premises partner provides day-to-day management services and maintains sole control over the solution.

There are significant licensing differences between Perpetual Licensing and Subscription Licensing, as illustrated below.

Perpetual Subscription
Self-managed, on-premises deployment Yes
Self-managed, hosted deployment (IaaS)* Yes
Partner-managed, on-premises deployment Yes
Partner-managed, partner-hosted deployment (SaaS) Yes
Own your licenses Yes
Lease your licenses Yes
Per User access licenses Yes Yes

Dynamics 365 Business Central on-premises includes at no charge, one SAL for an External Accounting User using the client software only for the sole purpose of providing supplemental professional accounting or bookkeeping services related to the auditing process, and one SAL for a System Administrator User for an employee of your Microsoft Dynamics partner to manage your application and provide support.

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