Microsoft Office Licensing Raises the Cost of Dynamics Hosting

Microsoft Dynamics hosting customers face thousands of dollars in unnecessary licensing fees, thanks to outdated Microsoft Office licensing requirements.

An article at MSDynamicsWorld.com by Linda Rosencrance recently explained the issue, suggesting that granting mobility rights on Office licenses would be the ultimate solution to the problem.  Here is how it how it breaks down:

Microsoft Dynamics ERP solutions are a perfect fit for cloud based business management and the Dynamics Services Provider Licensing Agreement (SPLA) is the main software licensing method behind Dynamics hosting.  SPLA hosting allows Dynamics hosting customers to pay for their software licenses in monthly payments, reducing their upfront ERP licensing costs and capital expenditures.  Considering most businesses are already running Office, the ability to seamlessly import and export data between Microsoft Office and Microsoft Dynamics ERP products is a huge benefit for end users.

Unfortunately the pre-cloud, pre-mobile thinking behind Microsoft Office licensing often requires Dynamics SPLA Hosting customers to purchase duplicate Office licenses so users can access Office through integration with the hosted Dynamics solution.  This leads to unnecessary costs to the customer that can reach into the tens of thousands depending on the number of users.

Microsoft Office licensing rules do not allow SPLA Dynamics customers to use their existing Office license to access Office software through Dynamics when it is deployed in a shared hosting environment over a remote desktop connection.  This includes both Azure and hosting partners’ cloud environments.

Under current Office requirements, the only way a customer can use existing Office licenses to integrate with a hosted Dynamics solution is when the server is dedicated to that customer.  But to pay for a dedicated server would greatly reduce the financial benefits that customers expect from deploying cloud based Dynamics through a hosting provider.  It boils down to the fact that Dynamics hosting customers are forced by Office to purchase the duplicate licenses in order to a have a full Dynamics business experience in a shared cloud environment.

Customers are required to purchase additional licenses whether they deploy Office locally or through the cloud via Office 365 (O365).

However this problem could be resolved if Office granted mobility rights to volume licenses under SPLA.  Mobility rights would essentially give the licensee the option to deploy Office on a number of devices which would include the hosting provider’s server in a shared hosting environment.   As of right now, there has been no indication from the Office team that this change is forthcoming.

Microsoft Dynamics Web Client users are not subject to the additional fees as they access their Dynamics solution using a web browser.  However, not all of the ERP products have complete functionality available in the Web Client.  And further, not all Independent Software Vendors (ISV) solutions have ported their applications to work with the newly released web client, so therefore this is not always an option for a customer.

Of course there is still tremendous value in deploying Microsoft Dynamics ERP in the Cloud via a hosting a provider’s shared environment.  Even with Office and O365 licensing requirements, deploying each solution in the cloud still creates significant cost savings over on-premises deployments.  Like never before, small and mid-size organizations are able to leverage a solution that they would otherwise not have the resources to deploy in house.  And large-scale enterprise Dynamics customers are able deploy a cloud or hybrid solution that will streamline their operations. Hosting providers like RoseASP who are dedicated to delivering high value services to their customers face a major challenge as Office’s licensing restrictions create unnecessary fees for customers in a time when everybody is trying to cut costs.

By RoseASP Hosted Dynamics