Microsoft Dynamics 365 is Microsoft’s trusted business solution platform providing CRM and ERP solutions in the Cloud. Dynamics 365 has been on the market for around three years, and Microsoft is constantly bettering the product and modules with further development. For this, Microsoft takes user requirements into consideration, and naturally there are implications for licensing.

Microsoft’s licensing model for Dynamics 365 will change from October 1, 2019. As a customer, you currently have the option of purchasing licenses for the Customer Engagement Plan, Unified Operations Plan or Dynamics 365 Plan. These include all associated business applications at a fixed price per user and month. Effective October 1, 2019, the Customer Engagement Plan, Unified Operations Plan and Dynamics 365 Plan will no longer be offered in this form.

Why is Microsoft changing its Dynamics 365 licensing model?

Microsoft is constantly developing its Dynamics 365 offering, for instance with the introduction of Mixed Reality and AI products (Sales Insights, Customer Insights, etc.), while aiming to enable you as a customer to better customise your licensing (mix and match).

This is an improvement given you’ll now have the possibility to purchase only the Dynamics 365 business applications that are most relevant for your business.

The new licensing model requires each to be equipped with a basic license. This is the license for the work area in which he or she works exclusively or mainly, e.g. Microsoft Dynamics 365 for Sales for a sales employee. The basic license is always offered at the standard price. If the employee also works in other business areas, he or she can be equipped with one or more additional licenses. These are the new “Attach” licenses, which can then be purchased at a fraction of the standard price.

Base and Attach Licenses

In addition, Dynamics 365 for Finance and Operations is no longer offered as a single business application. Instead, there will be two independent applications: Dynamics 365 for Supply Chain Management and Dynamics 365 for Finance.

New licensing model for Microsoft Dynamics 365 from October 2019: What you should know - Division

This change will enable you, as a customer, to acquire the licensing for the individual tasks of your employees in the future. The core areas of responsibility remain Sales, Customer Service, Field Service, Project Service Automation, Supply Chain Management, Finance, Retail and Talent.

New licensing model for Microsoft Dynamics 365 from October 2019: What you should know - SCM Finance

What are the benefits of the new licensing model? Facts and features:

  • The functionality of the Base License or Attach License is, of course, always the same
  • The business applications Project Service Automation, Marketing and Talent cannot be purchased as “Attach” licenses
  • With the exception of Talent, Project Service Automation and Marketing, you can combine Dynamics 365 Customer Engagement (CE) and Dynamics 365 Unified Operations (UO) applications to meet the individual needs of each user
  • The higher-priced business application must always be used as the base license
  • The Marketing application is a client-based license and therefore the Attach license model per user does not apply to this application
  • Under the new licensing model, individual applications are now cheaper than a Customer Engagement Plan or Unified Operations Plan
  • The licensing for devices and team members, as well as for activity users in the area of Dynamics 365 Unified Operations business applications, remains unchanged

What does the new licensing model mean for you as an existing customer?

As a Dynamics 365 customer, there is no change to your existing agreements. Everything remains the same until 12 months have passed since your purchase of the applications followed by a roll-over to the new license model. Then, a basic license must be purchased for each of your licensed employees and, if necessary, one or more Attach licenses. This will be an opportunity for you to re-evaluate your overall application needs and optimise them if necessary.

Make the most of the changes with AlfaPeople

At first glance, this new change in the license model appears to be complex. However, at AlfaPeople we believe the system has been very well thought-out and offers you the possibility to plan your Dynamics 365 business applications according to your needs and application use. AlfaPeople is on hand to advise you. Together, we can determine the best licensing options for you with the best range of functions for your company and your employees.

Sales and Marketing Executive at AlfaPeople