Your Guide to the Microsoft Dynamics 365 Licensing Plan 2020

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Microsoft is all poised to completely refurbish the enterprise application cloud software license structure for 2020 and beyond. With existing pre-bundled plans not adequately encouraging, the sale of the entire product suite often excluding specific products that represent emerging marketplace value, the new plan aims to help customers get the most of their Microsoft products – without over-assigning functionality or missing out on some great features. With the new plan, customers will get more choices to purchase licenses that more specifically meet their business needs.

An introduction to the new licensing plan

From a fixed licensing model, Microsoft is moving to a more à la carte licensing structure. The new structure will allow customers to purchase base licenses and also add applications – as required.

Here is a snapshot of the changes:

  • For new customers, all current license SKUs will be unavailable, effective 10/1/2019; for existing customers, all current contract pricing will be honored through the contract period.
  • Finance and Operations will be split into two individual applications - Supply Chain Management and Finance.
  • The new model will no longer offer distinct plans such as Customer Engagement Plan, Unified Operations Plan, and Dynamics 365 Plan
  • Instead, it will offer customers a choice of base licenses for any application, with the option to add additional modules or attach licenses - à la carte.
  • Marketing, Project Service Automation, and Talent cannot serve as add-on applications; they can only serve as base applications, allowing other modules to be attached.
  • There are no changes to the defined functionality that currently applies to each user. For example, Microsoft Teams prices are not affected; a Teams user continues to cost $8 per user per month.

Products and pricing

In the new model, licenses will apply separately to Customer Engagement and Unified Operations workloads. So, for users who need an extended suite of both Customer Engagement and Unified Operations, they will have to purchase separate base licenses for both – and then attach licenses for each workload.

Non-Core Add-ons

To purchase add-on applications for existing base licenses, attachments must have a less expensive base price than the license serving as the base. The following licenses are not considered in the base structure and need to be purchased à la carte:

  • Customer Insights
  • Microsoft Relationship Sales Solution
  • Sales Insights
  • Marketing Additional Application
  • Customer Service Chat
  • Resource Scheduling Optimization
  • Comprehensive Hiring
  • Order Lines
  • Forms Pro
  • All capacity add-ons and Sandboxes

Pricing and Product Mix Summary

For Dynamics 365 Customer Engagement and Dynamics 365 Unified Operations, here’s what the pricing and product mix summary looks like:

The Exception of Marketing Automation

The Marketing Automation application is a tenant-based license; therefore, the per-user base and attach license model does not apply to this application.

  • Customers who don’t have any core workload Business Application may purchase Marketing for $1,500 per tenant per month.
  • Existing customers who have at least one core workload under Business Application may purchase Marketing for $750 tenant per month.

Tips for Users

There area lot of users who can benefit from the new Microsoft Licensing Plan 2020. To get the most out of Microsoft product investment, here are some tips:

  • To benefit from the new price optimized license plan, users must evaluate current and future needs on a per-user basis. This will help them come up with the right mix of functionality needed vs. functionality offered in each licensed product.
  • Users who have enterprise licensing but do not plan to use all the features may benefit from switching to professional. Even with an attached license, the per-user cost could drop substantially.
  • Users who are on the Customer Engagement plan or Unified Operations plan and who find that individual users are not getting value from three or more products can reduce costs by converting to Base plus one Attach license.
  • For users switching to Microsoft from competitive cloud solutions, opting for “switcher” deals can provide a more optimized and competitive pricing structure.

The Road Ahead

Microsoft Licensing Plan 2020 is a great opportunity for existing Dynamics users to re-evaluate their application needs and choose a license bundle that best fits their needs. Many may find that professional user license is adequate to meet their business needs, reducing their costs. Partnering with an experienced Microsoft-certified consultant can help organizations optimize licensing and identify the best cloud software solution for improving every aspect of their business.

About the Author - Kjell Kahlenberg

As Director of Customer Engagement Solutions of Synoptek, Kjell is a subject matter expert on Microsoft Dynamics CRM with deep experience across sales, customer care, and marketing disciplines. He has led large enterprise CRM deployments across various industries and business models. Kjell focuses on solution advisory, consulting, architecting, project and program governance, and overall customer engagement.

Contributing Author: Malavika Nityanandam

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