Difference b/w Dynamics AX vs Dynamics 365 | 2025

If you read this article, "Dynamics 365 vs Dynamics AX," we believe you are an existing Dynamics AX user. You may land on this article looking to upgrade Dynamics 365 or get the intended support for smooth operation.

Microsoft AX has different versions; "AX2012, R2, and R3” were recent. However, the mainstream support for the last version of Microsoft AX, 2012 R3, ended in Jan 2021. Similarly, its extended support ended in Jan 2023.

Thus, businesses require external support to run the Dynamics AX software or upgrade to Dynamics 365 for leveraging more advanced functionality.

To make an informed decision, businesses need to explore the similarities and differences between “Dynamics AX vs 365.” This will help you decide whether to stay on the existing solution with support or upgrade to Dynamics 365, a suite of cloud-based solutions.

To learn more about this system, we will examine Dynamics 365 vs Dynamics AX based on cost implications and the deployment module. In this blog, we will see their differences and explore the options.

What is Dynamics AX?

Dynamics AX, formerly known as Axapta, is a legacy ERP system deployed on-premises. It is one of the initial ERP solutions from Microsoft that helps businesses manage their financial, manufacturing, and supply chain management needs.

However, Microsoft rebranded Dynamics 365 for Operations. Later, it became Dynamics Finance and Operation, a key ERP solution from the Dynamics 365 suite. Now, you can’t purchase a Dynamics AX license until or unless you are an existing user.

What is Dynamics 365 Finance and Operations?

Finance and Operations (F&O) is an ERP solution from the Dynamics 365 suite. Unlike Dynamics AX, it is a cloud-based solution that allows you to manage your various business processes, such as production, warehouse, supply chain, inventory, etc.

However, Dynamics F&O is not a single solution; it combines Dynamics 365 Finance and Dynamics 365 Supply Chain Management. Businesses can purchase a single solution license or attach one per their requirements.

For medium and larger enterprises, Dynamics 365 Finance and Operation has been the key solution, enabling streamlined workflows, visibility, centralized data management, and collaboration.

Exploring Key Differences Between Dynamics AX and Dynamics 365

Businesses need to understand the difference between Dynamics 365 vs Dynamics AX. This helps you know what your business can access and align the features with your business requirements.

Deployment and Infrastructure

When comparing Dynamics AX vs Dynamics 365, its deployments are entirely different. Because Dynamics AX is an on-premises system, it requires a significant upfront investment in physical infrastructure, including servers and storage, as well as ongoing IT maintenance.

Dynamics 365 F&O, on the other hand, is a cloud-based application that needs a monthly subscription. A hybrid deployment option is also provided. You can readily take advantage of the newest features without requiring personal involvement, and you don't have to invest in the physical infrastructure.

Cost Structure

The financial models of both technologies are significantly impacted by the deployment method. Dynamics AX necessitates a one-time capital outlay for licensing and infrastructure, followed by continuing maintenance costs.

Dynamics 365, on the other hand, uses a subscription-based business model. A significant investment in physical infrastructure is not necessary; it just costs for the license you want to utilize. Furthermore, it's simple to change the quantity of licenses to fit your requirements.

Customization and Upgrades

When deciding between Dynamics 365 vs Microsoft AX, businesses need to take customization and upgrades into account.

Dynamics AX requires technical expertise to upgrade and customize because it is an on-premises solution. You need to hire an expert to write new code on top of the old code. This complicates the upgrading and customization procedure.

Additionally, you may use the built-in extension to customize the software to your liking, which simplifies the update process and does away with the need to write code. The best thing about the upgrading is that it occurs automatically and requires no human intervention.

Integration Capabilities

Similar to customization, the Dynamics AX integration process is complicated. You need a technical expert to set up the integration process. You can utilize “Application Integration Framework,” “.NET interop to X++,” or “.NET interop from X++” methods to initiate integration between Dynamics AX and the existing system.

On the other hand, Dynamics 365 F&O enables a wide range of connectors on Microsoft AppSource that allow businesses to connect their existing or third-party solutions in a few steps. In addition, it also streamlines the data sharing across the platforms to ensure seamless operation.

On-Going Support

There is no comparison between Microsoft Dynamics AX vs 365 for on-going support. Dynamics AX support has ended all types of support, including security hotfixes and updates. On January 10, 2023, extended support also ended, which means your system is in danger and requires additional support.

However, Dynamics 365 mainstream support is still on that adds new features, fixes bugs, and enables full access. Microsoft releases two mainstream support programs in one year. For instance, Wave Release 1 and 2 in 2024 focus on introducing Microsoft Copilot across the Dynamics 365 suite.

If you don’t want to read these long texts, please refer to this table to understand the difference between Dynamics AX vs 365.

What Are Your Options Going Forward?

You have understood the difference between MS Dynamics AX vs 365. Going forward, you have two options:

Option 1: Stay on Dynamics AX

Many organizations stay on the existing Dynamics AX and refuse to enter the transition phase. However, staying on Dynamics AX is challenging for smoother operations in terms of the latest features and security.

You must partner with a reliable Microsoft Partner, like Dynamics Square, to ensure the continued performance of the system. Dynamics Square analyzes your business requirements and offers a support service. It helps you avoid migration and operate your business effectively.

Option 2: Upgrade to Dynamics F&O

The second and best option is upgrading to Dynamics 365 F&O. You can leverage various advantages, including the latest features, improved integration capabilities, and enhanced security.

However, you require an expert service to help cleanse the data and migrate to Dynamics F&O more effortlessly.

How Can Dynamics Square Help?

Dynamics Square is an expert Microsoft Solutions Partner in Canada with 14+ years of experience. We have helped 350+ companies to ensure the optimal performance of their systems. Our expert consultants are ready to help you whether you require support or upgrade services.

During the migration, our team ensures a seamless transition from Dynamics AX to Dynamics 365 F&O. If your business requires any dedicated support for regular maintenance or issue resolution, we are here to help your business.

Call us at +1 778 381 5388 or drop an email at info@dynamicssquare.ca for your intended business requirements.

People Also Ask:

What is the difference between Dynamics AX and 365?

The primary difference between Dynamics AX and Dynamics 365 is that Dynamics AX is an older, on-premises ERP solution. While Dynamics 365 is a cloud-based suite of business applications, including ERP functionalities. It offers greater flexibility and scalability through its cloud infrastructure.

Dynamics 365 is the modern, cloud-based successor to Dynamics AX, now considered legacy software.

Key points about the difference:

• Deployment
• Maintenance
• Integration
• Functionality

What is Dynamics AX called now?

Microsoft Dynamics AX is now called Microsoft Dynamics 365 for Finance and Operations; it was rebranded as part of the broader Dynamics 365 suite, undergoing a name change from "Dynamics AX" to "Dynamics 365 for Operations" initially and then further to "Dynamics 365 Operations and Finance".

Why upgrade from Dynamics AX to Dynamics 365?

Upgrading from Dynamics AX to Dynamics 365 is beneficial because it provides a cloud-based solution with enhanced features, better integration with other Microsoft products, automatic updates, and improved security.

More Reason to Upgrade:

• Continuous updates and support
• Improved user interface
• Scalability
• Cost savings
• Enhanced security

What is Dynamics AX?

Dynamics AX is a legacy ERP software suite designed to help businesses manage their finances, operations, and overall business processes. It automates tasks across different departments, streamlines activities, and improves efficiency. You can get better insights into company performance across various areas like sales, inventory, manufacturing, and finance.

It can help you in:

• Operational efficiency
• Financial management
• Supply chain management
• Real-time insights

Why is Dynamics 365 so expensive?

Dynamics 365 can be considered expensive due to the ongoing development and addition of advanced features like AI capabilities, robust analytics tools, and improved integrations. Microsoft continuously invests in its products to deliver more excellent value and functionality to businesses. This also includes complying with local regulations and maintaining parity across different currencies.

Key reasons for the Dynamics pricing:

• Constant feature updates
• Per-user licensing model
• Market positioning
• Customization and implementation costs