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This was a part of Chapter 1 in the first draft of my book Implementing Microsoft Dynamics NAV 2009. It was cut to keep page count down and preserve the environment, but I figure that a few electrons pushed through the optical labyrinths of The Internet won’t hurt anyone, so here you get it, in its original form: The History of Microsoft Dynamics NAV.

ERP systems are like wine: they get better with age. You can’t just develop an ERP system from scratch and have it conquer the market overnight. The value of an ERP system can only be proven in practice, over time. Like every good ERP system, Microsoft Dynamics NAV has quite some history of its own.

When Jesper Balser, Peter Bang and Torben Wind founded PC&C ApS in Copenhagen in 1983, they couldn’t possibly have anticipated the growth their small company would experience over the next two decades. Their first product – PCPlus – which hit the market in 1984 was a small accounting application targeted at small business and home office customers, and while it wasn’t revolutionary in any special way, it definitely rode a new wave and knew how to leverage the emerging trends.

Until the early 1980-ies, the word computer was used mostly to designate a mainframe, and most accounting software was out of reach of small companies. Computers were expensive, and the word software was only just making its way into dictionaries. When a new paradigm – Personal Computer or PC – showed up sometime in 1970-ies, a revolution sprang, and computers became increasingly available to ordinary people and small businesses.

“Beauty of Simplicity”

Advent of IBM PC architecture marked the beginning of a new era. While earlier smaller companies couldn’t afford to have a computer, now the situation turned upside down, and companies couldn’t afford not to have one. The computers boosted the pace of the business and made the decision making process count only when it was fast enough. A new niche suddenly appeared: accounting software for small companies. PC&C ApS from Copenhagen, Denmark, was among the first to nest comfortably in it.

“Beauty of Simplicity” was soon adopted as company’s first slogan, and it clearly communicated the strategy of making software as simple as possible, a strategy which was rigorously observed by every future version for years to come.

In 1987, the company decided to change their somewhat cryptic name of PC&C, which stood for Personal Computing and Consulting, into Navision Software. At the same time, their already established accounting software came under a new name of its own – Navigator. Apart from the new name, much more was new with the new version.

Navigator contained a list of features hard to find in competing products, such as client/server multi-user environment with full version-based transaction isolation, report designer and an analytical functionality based on dimensions, which resembled the contemporary OLAP tools, to the extent of being eerily prophetical.

With this new set of features, Navigator showed that it was a solution to be counted with, which was underlined in 1990, when Navigator 3 came as an even more feature-rich application, bringing all sorts of gizmos along, including a complete built-in development environment, enabling customers to modify not only tables, forms and reports, but the whole underlying business logic.

At the same time, the market grew wider, and the application, which was previously only available in Scandinavia, was now available in Germany, United Kingdom and Spain. In 1992, Peachtree Software acquired the rights to distribute and implement Navigator in United States, and from that point on, the solution was truly worldwide.

The Navision Era

Navision Software has never turned the blind eye to the market trends, and as soon as Microsoft published their first 32-bit Microsoft Windows operating system in 1993, Navision underwent a major development effort to create a new generation of Navigator, compatible with the new OS. The effort culminated in 1995, when together with market availability of Windows 95 and Windows NT platforms by Microsoft, Navision Software published their new application, called Navision Financials 1.0.

The product improved gradually over years, with the inclusion of contact management functionality in 1997, manufacturing functionality in 1998, and advanced distribution functionality in 1999.

One of marking advantages of Navision Software’s product over the years was being prominently platform and technology centric. While other accounting and ERP solutions were primarily focused at delivering functionality, to Navision Financials there was always much more than plain functionality.

Apart from being one of the first solutions to leverage on Microsoft Windows 32-bit platform, Navision Financials was among the first business management solutions to run on Microsoft SQL Server 7.0, as early as 1999.

Hardly any year has been so rewarding for Navision Software as 2000. In this year alone, Navision Software certified Navision Financials for Microsoft Windows 2000 Professional and Microsoft Windows 2000 Server Certifications, published the Navision Commerce Gateway, the world’s first solution based on Microsoft BizTalk Server, and Navision User Portal, the world’s first solution based on Microsoft Digital Dashboard technology.

In the same year, Navision Software merged with its toughest rival, Damgaard Data A/S, also a Danish company. Damgaard was famous for its flagship product – Axapta – originally available only in Denmark and United States, and considered a higher-end market solution than Navision Financials. Out of this merger came NavisionDamgaard A/S, but it soon changed its name into Navision A/S.

In 2001, with release 3.00, Navision re-branded its product into Navision Attain, bringing many improvements along, including multi-currency and multi-language functionality, plus Commerce Portal integration and Designed for Microsoft Windows XP logo certification. But the development continued at an ever increasing pace, with new versions being released less than a year apart.

The market was astounded when in an unprecedented move Microsoft acquired Navision A/S in 2002, for groundbreaking $1.45 billion –the largest acquisition ever made by Microsoft until that date. This acquisition also marked the final major move by Microsoft in forming its new department – Microsoft Business Solutions.

The same year brought two more version releases. While version 3.10 brought nothing from technical perspective, and something from functionality perspective, version 3.60 came along with more news than any single previous version, both from technical and functional standpoint, together with new name – Microsoft Navision Attain.

In 2003 yet another version came, 3.70, again with new name – Microsoft Business Solutions–Navision – and a bunch of updated features. But the true upgrade to the product happened in 2004 with Microsoft Business Solutions–Navision 4.0, which brought a lot of new functionality, and a new user interface based on an Outlook navigation concept.

“Project Green”

When Microsoft completed the acquisition cycle of three major business application vendors, with their four major applications – Great Plains, Solomon, Axapta and Navision – an issue popped up. Although all four were built upon and tightly integrated with Microsoft technology stack, apart from the new name of Microsoft Business Solutions they didn’t really have too much in common.

With four different approaches to the same business problems, four different user interfaces, four different technology foundations and four different integrated development environments, it was all too obvious that Microsoft had to do something about them to start capitalizing on its new investments.

Rumors surrounding “Project Green” spread at the speed of thought. Whilst Microsoft was careful initially as to what to release to general public, and what to withhold, the less they officially announced, the more room there was for speculation. It was generally known that Microsoft was working on something called “Project Green”, which had something to do with Microsoft Business Solutions, and most expected it to address the biggest issue: the disparate Microsoft Business Solutions product lines with all their different technologies.

Analysts, partners and customers alike expected that Microsoft was working on a completely new product, which would be built around the .NET Framework and integrated even more tightly with Microsoft Office and Server System products, the only component of the old four products to be retained being their broad customer base. The whole “Project Green” concept was seen by some as a cunning plan devised to draw new revenue from existing customer base, with little or no intent to continue the development of existing products. It wasn’t until 2005 that Microsoft finally disclosed what “Project Green” was all about.

In opposition to these expectations, the strategy was somewhat different. The products were not to be replaced by a single solution, but would instead slowly converge over time into a single code base, which would happen no earlier than 2013. In the meantime, two waves would be launched, the first one focused on delivery of a shared user interface, SOA architecture, Microsoft SQL Server and Microsoft Office SharePoint Server integration; and the second one applying the model-driven approach to business processes and bringing the four products closer to the .NET development environment.

Microsoft Dynamics

All of this was pretty tough for the Navision customer base. Changing strategies and product names didn’t exactly result in increased confidence, and opposing legacies of old applications and new development plans, combined with rumors and speculations, threatened to scare new customers off. With an application renamed from Navision Financials, to Navision Solution, to Navision Attain, to Microsoft Navision, to Microsoft Business Solutions–Navision all over the course of mere four years, combined with new plans being revealed every so often, customers and prospects were afraid.

Whilst the common name of Microsoft Business Solutions clearly communicated the strategy and positioning of the products as parts of a single product line, Microsoft desperately needed a stronger brand, one which would be a less of a mouthful, yet powerful enough to stand out from the ever louder competition. In September 2005, Microsoft Dynamics was born.

Microsoft Dynamics wasn’t moving away from the already announced plans to deliver new releases of existing products in two waves, but it clearly communicated the intent to gradually converge them over several future releases. The names of existing products were therefore completely abandoned, and replaced with designators which resembled them somewhat, but which would only be temporarily used until the full convergence finally occurred. Microsoft Business Solutions–Navision thus became Microsoft Dynamics NAV.

The first full version to hit the market under the new branding was Microsoft Dynamics NAV 5.0, which was released in March 2007. The bar for this version has been set fairly high. Initial communications made customers expect the long-promised role-based user interface, but the released version wasn’t to come with one. In October 2006, Microsoft decided to push the role-based interface to a separate release, which got code-name “5.1”, and was scheduled to RTM (release to manufacturing) in fourth quarter of calendar year 2007. Later that year, Microsoft Dynamics NAV 5.1 was renamed “6.0”, and the scheduled release date was set for second half of 2008.

In October 2007 at Convergence conference in Copenhagen the plans were announced about using a new versioning approach for Microsoft Dynamics products. In January 2008 it was announced that all of the future Microsoft Dynamics ERP and CRM products will be using a version year approach instead of numbered versions, to align the versioning approach to that of other major product lines at Microsoft. Version year approach mandates that any product release gets the version tag of the current calendar year, unless the release date is in the second half of the year, in which case the “versioning ahead” approach is applied. Since the scheduled RTM (Release To Manufacturing) for Microsoft Dynamics NAV “6.0” was planned for fourth quarter of calendar year 2008, the official product name was Microsoft Dynamics NAV 2009.

Although the two release date delays did initially stir some animosity, the decisions to postpone the release were totally correct. In earlier times, Microsoft had been notorious for unstable first releases, with several service packs for every product in the first two or three years after release. It wasn’t just Microsoft shipping unstable first releases, everybody did it. Somehow, the market had grown used to having unstable software followed by dozens of patches.

With its Trustworthy Computing initiative launched in 2002, Microsoft decided to declare war on software unreliability, and this initiative has since resulted in exceptionally well written software, with SQL Server 2005 being a notable example of a product not having a single security bulletin released ever. From a Trustworthy Computing standpoint, it made perfect sense to invest extra time in the development of Microsoft Dynamics NAV 2009, and reach quality levels never attainable with tight or unrealistic deadlines. If Microsoft Dynamics NAV 2009 had been released a year earlier, it wouldn’t have been as thoroughly tested and feature rich as it is today.