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Microsoft Dynamics 365 licenses

Numerous factors affect the kinds of licenses you need for Microsoft Dynamics 365 and their cost. Conclusion MBS is your guide through the licensing labyrinth.

Microsoft Dynamics 365 licenses

Complicated licensing issues

It used to be simple: you bought the software, and the price depended on the number of users and the modules. Now that Microsoft Dynamics 365 is Software-as-a-Service (SaaS) and uses a subscription model, licensing is more flexible, but also more complex. The five factors described below, among others, affect Dynamics 365 licenses and their prices.

1.     What functionality are you buying?

There is not just “one” Dynamics 365. You can think of Dynamics 365 as an ecosystem with a myriad of business ERP and CRM applications. The applications are easy to combine in the platform. Of course the specific functionalities you purchase have a major impact on your licenses and their prices. A full-suite ERP with CRM is naturally more expensive than a single CRM application like Sales or Marketing.

 

2.     The number and types of users

It almost goes without saying that the more users you have, the more you pay. Aside from the number of users, the type of license a user has also matters. Microsoft uses terms like “full/enterprise users”, “team members”, “device users” and “activity operations users”. Some types of users have access to more functionality than other types. And to make things even more complicated: different Dynamics products may have different user types, use different terminology for these types, or have minimum numbers of users. A user who can do everything naturally costs more than a user with limited access.

 

3.     Usage

For Dynamics 365, Microsoft also uses pay-per-use-type models, generally on top of other types of licenses. In simple terms, it sets a maximum usage for a specific system, such as X gigabytes of database space allocated to each user. This maximum varies from one Dynamics product to another. If you need more, you pay extra for it based on your additional usage.

 

4.     Client type

Whether you are a commercial enterprise, government agency, educational institution or non-profit makes a huge difference in your licensing. Non-profits and government agencies may enjoy attractive discounts, for instance.

 

5.     Contract term

Dynamics 365 offers three different contract terms: your license can be for 1 month, 1 year or 3 years. If you opt for 1-month licenses, prices may fluctuate. In practice prices are reasonably stable, but there’s no guarantee. The main benefit of a monthly subscription: you can scale the number of users up or down every month. If you opt for 1 year or 3 years, you enjoy price protection: you know exactly what you will pay over next 1 or 3 years. You can still scale the number of users up, but not down. You can also strategize around this. If you use a lot of temps during peak vacation times in the summer, use 1-year or 3-year contracts for your permanent employees, and monthly licenses during the summer for your temps.

The added value of a Dynamics partner

As a Dynamics partner, we are always up on the latest developments in licensing. To make order out of the licensing chaos, we have developed our own licensing portal. Here’s how it works:

  • We activate you as a client, giving you access to this portal. It shows you your current licenses, as well as the other licenses that are available.
  • Along with a Conclusion MBS license specialist, you can mix and match licenses in the portal, which automatically calculates the price.
  • If you purchase licenses over our portal (after consulting with a license specialist), the delivery and invoicing are fully automated.

    Advice: always work with a specialist.

    Strictly speaking, our clients can in fact purchase their own licenses over the portal, but we always recommend doing this along with a specialist. There are hundreds of different licenses, some of which have very similar names. So it’s easy to make a mistake with far-reaching consequences, even though you do have 72 hours to cancel the license after ordering (please note: you must pay for the license up to the time of cancellation). What’s more, the specialist knows all about strategic mixing and matching, and all the possible discounts.

    FAQ about Dynamics licenses

    Which Dynamics license is right for me?

    That depends on a whole slew of factors, such as the functionality you want, and the number of employees who will use it. We recommend consulting with a license specialist before purchasing or changing a license.

    Can I change my license?

    In principle, it is possible to change Dynamics licenses on your own. Please note: you are bound to a specific contractual term of 1 month, 1 year or 3 years. You cannot change it during the term, though you can upgrade at any time. If you have ordered or changed a license, you can cancel within 72 hours. You will however pay for the license for as long as it runs.

    What does a Dynamics license cost?

    The short answer is: it depends. As we explain above, the main factors in the price are the functionalities you want, the number and types of users, the usage, the organization type and the contract term (1 month, 1 year or 3 years).

    Can I order licenses myself?

    Yes, you can. Using our portal, for instance. But we cannot stress it enough: we always recommend consulting a license specialist first, before you order or change any licenses.

    How do you mix and match, and how do base licenses and add-ons?

    Microsoft distinguishes between your base license and add-ons. The first app you purchase in Microsoft Dynamics 365, or your “base app”, is your base license. Anything you add later you can purchase as an add-on or “attach” license. One rule here is that the most expensive license always becomes the base license. It’s difficult to say anything more specific here. The apps that can be the base app, and the different possible combinations, all change regularly. In addition, certain functionality (such as HR modules) is sometimes transferred to other products.