What is the difference between Dynamics AX and Dynamics 365?

Dynamics AX vs Dynamics 365: 7 differences

Microsoft Dynamics AX evolved to be one of the most widely used ERP solutions in the world. In October 2021, however, Microsoft withdrew their support for Dynamics AX.

All AX users now have a choice: evolve to Dynamics 365 Finance & Operations, the newest, improved ´in the cloud´ version with ongoing support; stay with AX and lean heavily on their suppliers to help them manage their existing AX platform; or move to another solution entirely.

If you have not yet made your decision, we look at 7 key differences between Dynamics AX and Dynamics 365 F&O hoping this can help you with your decision. 


One of the most important differences between Dynamics AX and Dynamics 365 F&O, is that F&O is delivered by Microsoft as software as a service.

Dynamics 365 F&O is hosted in Microsoft’s cloud, and Microsoft is responsible for installing, maintaining, and administrating the installation. On-premises infrastructure and infrastructure administration are not required.

This reduces both capital expenditure and overhead costs. Companies pay for the service on monthly or annual subscriptions, and according to the number of users in the system.


Dynamics 365 F&O is continuously upgraded with improvements in both functionalities and technological features (typically 8 times a year) so the system never becomes out-of-date or obsolete, without the need for future expensive version upgrade projects.

This is a huge improvement over Dynamics AX which required big reimplementation or migration projects every 5 to 8 years, which for big multinational companies involving many entities in different countries was and is still a nightmare.


To run Dynamics AX, you need to launch the system in a desktop or use a remote desktop connection. Dynamics 365 F&O users get a much friendlier experience and greater flexibility, thanks to its browser-based access. With Dynamics 365 F&O, you can work anytime, anywhere, and from any device that has a browser and internet connection.

In addition, users have a better view of the information displayed on the system as it is better organised and easier to find, using the search bar or filters.

Also, a very useful feature in Dynamics 365 F&O are the Workspaces, which provide an overview of activities that a user performs within the system. They are a good point of entry into the application, where the user can manage their day-to-day activities, increasing productivity as well as user ease.


Each version of Dynamics AX has a limited period of mainstream support, which includes incident support, security update support, and the ability to request non-security updates. 

The only version of Dynamics AX that still has mainstream support is Dynamics AX 2012 R3, which ends in October 2021. After this time, only limited support will be available from Microsoft until 2023.

In this sense, the company will be exposed to many serious risks for not having their ERP updated, such as servers operating systems not supporting the ERP solution, the ERP being out of compliancy with new tax laws – or data security – and risks of security breaches, to name some.

As part of its nature as a SAAS offering, Dynamics 365 F&O will continuously be supported without an end date.


Another important difference between the two Dynamics versions is the method in which custom code is written and implemented.

With Dynamics AX, custom development is applied using an overlapping method where different sets of code are layered on top of each other. Sometimes, after merging the code, compatibility issues occur, and developers must adjust the code before it can be deployed.

In Dynamics 365 F&O, developers customize the system through built-in extension points – reducing compatibility risks as they are not modifying the core code. In addition to this, integrate the system with apps created via PowerApps.


The need to integrate an ERP with other applications is a very common requirement among companies.

Dynamics AX uses legacy technology, that is not adequate with new technologies from other systems.

Dynamics 365 Finance & Operations, however, offers a wider range of possibilities for cloud and on-premises integrations, throughout modern and versatile technologies.


The licensing of D365 F&O allows companies to get a more flexible scheme than in the past with Dynamics AX.

It includes four different full user licences (Finance, Supply Chain Management, Project Operations and Commerce) in both a base and attach options. It also includes two limited cross functional licenses (Activity and Team Member) and a Device license.

You can read about Dynamics 365 F&O licence types here: How is Microsoft Dynamics 365 Finance and Operations Licenced?

Is it time to upgrade to Dynamics 365 Finance & Operations?

Many organizations using Microsoft Dynamics AX are now considering an upgrade to the Microsoft Dynamics 365 F&O, hoping it will be their last version migration project.

If your organization is considering an upgrade, do contact us. We have substantial experience across the world helping large and small companies to migrate to a better, smarter cloud-based ERP solution. Our consultants can provide a live demo, help you set up a free trial and show you how to transform your business processes through Dynamics 365 F&O.

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