Licensing Guide for Dynamics 365 Online – October 2019 Update

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Overview

With October release right around the corner, Microsoft will be moving away from the plan-based structure to base-and-attach licensing model to allow customers to mix and match applications depending on their consumption. The new licensing model will allow customers to purchase the applications they need when they need them, or as some would like to call it -an a’la carte sales model.

But, as close as we are to the fall update, I am still hearing some concerns and questions regarding the new Dynamics 365 licensing. It may seem a bit complex and might require some to do some math after, but it is intended for customers to have more control of their subscriptions and therefore allow them to “pay only for what they use”  As Alysa Taylor, Corporate Vice President of Business Applications and Global Industry assures us…

In October, Microsoft will be moving from “one-size-fits-all” Microsoft Dynamics 365 licensing plans to focus on providing customers with the specific Dynamics 365 applications that meet the unique needs of their organization. Customers need software that aligns to their functional roles and scenarios, and they require the ability to add or remove applications as their company grows and changes over time. The new licensing model will allow customers to purchase the applications they need, when they need them. Each application is extensible and applications can be easily mixed and matched to configure integrated solutions that align to a customer’s unique business requirements.

How it works

Every user starts with a base license. The Base license is the first application purchased for individual use within an organization.  The Attach licenses can be purchased on top of the base license as incremental applications at a heavy discount.

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Both Base and Attach licenses provide access to the same application functionality.

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This new model allows each organization to use the right layering for each individual user depending on their needs. But depending on your consumption, this new model might still affect your monthly payment. Payment is based on usage per user per month. I suggest reading the full pricing guide and check Microsoft updates.

Restrictions and things to consider…

  • The Dynamics 365 for Marketing app will remain tenant-based and can only be purchased at the standard price of $1500 for new customers. Attach licenses will NOT apply.

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  • Additionally, Dynamics 365 for Project Service Automation and Talent are NOT available as Attach licenses.
  • The minimum 20 seats for Finance and Operation will still take effect. At least 20 licenses must be purchased for any one of the applications.
  • Common Data Service will still be allocated with Unified Operation apps without additional licensing, but multiplexing issues will still apply.
  • Storage SKUs will remain unchanged and can be purchased and allocated as needed.
  • Base license must be the higher-priced app. For users that require using apps from Customer Engagement and Unified Operations, Unified Operations must always be the Base License. The same applies between CE Enterprise licenses and CE Professional licenses – Enterprise must always be the base license.

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Customer Engagement

See below for the placemat view pricing guide for Dynamics 365 applications under Customer Engagement.

Some entities are accessible as read-only and are categorized as unrestricted. Update to restricted and unrestricted entities are also being made with the goal of enabling more users to access data directly through a PowerApps application or Flow workflow without requiring a Dynamics license but more on this on a separate post.

But if you require to use all the Customer Engagement Apps, you can purchase Project Service Automation as Base License and add the rest as Attach Licenses.

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Unified Operations

One of the key changes that are also coming this October is the separation of Finance & Operations module into two separate applications — Supply Chain Management and Finance.

Both of these apps can be purchased as base and attach licenses of one another, depending on your needs, and would still require the 20 seat minimum.

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The functions are broken down into these two applications…

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Below is the placemat view of the pricing guide for Unified Operations applications.

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Impact

New customers can no longer purchase the Dynamics 365 CE and UO plans. The new Base and Attach license model will apply from the 1st of October. So, it is important for potential and existing customers to be made aware of these changes.

For existing customers, the changes will only take effect after their renewal date. So, for a 1-year long subscription purchased on January 1, 2018, the changes will take effect on the same date the following year and must be converted before then. To those that still have concerns, make sure to keep an eye out for more updates.

These changes are easy to understand but may still have a substantial impact on your existing subscriptions. Depending on your organization’s needs, it is important to seek the advice of a consultant/partner regarding this matter.

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