For a few months now we have heard about this topic as promoted by Microsoft marketing and several clients and prospects have asked us “what does this really mean” and/or “does this mean I need to upgrade to CRM 2011 in early 2013? The short answer is “No, you don’t” but let me explain the reasoning behind the answer.

When you purchase and implement CRM Dynamics “on-premise” software, you get a couple of paid support incidents per year with the licensing. Additional support can be purchased directly from Microsoft on a per-incident basis for about $200 per incident. Alternatively, you could have purchased a higher-level service plan with your licensing or services partner, which may have included prepaid support incidents or hours.
Microsoft supports each release of its software in phases. As new releases come out, the previous releases continue to be supported as a mainstream release for a period of time, usually a couple of years. Mainstream means that Microsoft will continue to treat the release like their current production release: with hotfixes for bugs, cumulative updates or service packs at longer intervals, and by offering prepaid or per-incident-paid technical support cases. At some point, Microsoft decides it no longer needs to provide this higher-level of support for older releases. Then the software goes into a phase called “extended support”, typically for 5 more years.
This is the case with Dynamics CRM 4.0 in April 2013. It will move from the mainstream support phase to the extended support phase. So what does this really mean to customers who are currently running CRM 4.0 On-Premise and would like to continue to do so without having to upgrade in 2013? As you can see in the table below, the only things you will be losing are the following non-mission-critical support items:
·        Non-security hotfix support
·        No-charge incident support
·        Warranty claims
·        Design changes and feature requests
To review all of the details regarding the CRM 4.0 extended support phase here are some links you can check out. The table below gives the clearest information.
Microsoft support lifecycle policy FAQ (the table below was extracted from this FAQ)
What is the difference between Mainstream Support, Extended Support, and online self-help support for software products?
 
Support provided
Mainstream Support phase
Extended Support phase
Paid support (per-incident, per hour, and others)
X X
Security update support
X X
Non-security hotfix support
X
Requires extended hotfix agreement, purchased within 90 days of mainstream support ending.
No-charge incident support
X  
Warranty claims
X  
Design changes and feature requests
X  
Product-specific information that is available by using the online Microsoft Knowledge Base
X X
Product-specific information that is available by using the Support site at Microsoft Help and Support to find answers to technical questions
X X

Note
A hotfix is a modification to the commercially available Microsoft product software code to address specific critical problems.
In conclusion, we believe the end of mainstream support for CRM 4.0 IS NOT A GOOD REASON TO UPGRADE. Rather, your upgrade decision should be based on real business benefits, process automation, mobility support, etc. There must be a concrete ROI related to your upgrade project. Dynamics CRM 2011 has literally hundreds of new features and amazing new browser and mobility support and social media interaction.
We recommend that you create a small internal project to evaluate the exciting new features and future capabilities of CRM 2011. A good place to start is at our recent blog concerning the UR12 update (Is Your CRM 2011 Ready for the Next Update?) Once you have a high-level understanding of CRM 2011 and its many potential benefits to your organization, then it would be a good time to convene a meeting or presentation to a small group of business and IT leaders who could champion the upgrade project. You might want to consider giving us a call at C5 Insight to discuss how this meeting might be run. A proven tact is to discuss your company’s long-term vision for CRM as a key component of your “customer-facing systems”. We believe you will have more "posture" and garner more organizational support and enthusiasm for the upgrade to CRM 2011 using this approach.