Dynamics 365 Licensing Explained

Dynamics 365 Licensing Overview

Microsoft Dynamics 365 uses a role-based licensing model that has access to applications related to common business processes. An organisation will typically pay per user, per month, per application, providing flexibility to scale up and down their business operations. Dynamics 365 starts with a base app when implementing a solution, and then builds on this with extra applications which are heavily discounted. For example, if you purchase Sales as the base app, subsequent apps such as Customer Service will be cheaper, but requires 10 users as a minimum to qualify.

There are also variations of app licences such as Customer Service which has Professional and Enterprise, with Enterprise bringing further capabilities and a high price.

Dynamics 365 Marketing is the exception to this rule, where you pay per tenant. (A tenant is a large slice of your Dynamics environment defined by region, language and so on).

Dynamics 365 Pricing

Prices below are Per User, Per Month, apart from Customer Insights (formerly Marketing) and Customer Data Platform. Subsequent pricing for user-based apps applies only to the individual licensed for the first app. For example, if Person A is licensed for the first app, subsequent pricing wouldn’t apply to Person B. Subsequent pricing for tenant-based apps applies to any tenant in your organisation. 

Teams licensing grants limited read access to Dynamics 365 data and applications. There is also limited participation in set business process scenarios, such as updating personal employee information, mobile access, reporting, creating notes, contacts and activities.

Power Platform Licensing

The Power Platform has its own licensing pricing so users can access Apps, Virtual Agents, Portals and automations. Because Dynamics 365 and Power Platform are model-driven apps securely connected in the Dataverse, there are business cases where it's optimal from a licence standpoint for users to go through the Power Platform route to interact with business-level processes, data and systems.

Frequently asked Questions on Dynamics 365 Licensing

Can I buy annual subscriptions?

Yes, Microsoft changed their licensing models as of July 2022 to the New Customer Experience (NCE) to provide further flexibility for businesses.

This allows commercial organisations to:

• Annual subscription option to lock in licence prices for 12 and 36 months
• For the annual and the new 36-month agreement options, cancellations made after 72 hours will be billed for the remaining term.
• Monthly subscription with the flexibility to reduce licences any month at a 20% premium. Allows for monthly seat reductions and cancellation of licences any month without further financial commitment.
• Licences can be mixed and matched to match their demand.

What is the difference between Pro and Enterprise for Sales and Customer Service?

Professional has some capacity restrictions compared with Enterprise such as entity creation in the Dynamics 365 environment. We've covered this in further detail where you can find out further information.

Customer Service Licensing Explained

Sales Licensing Explained

How can I manage my licences?

Licences can be administered through the Microsoft Admin Center. However, We would strongly advise allowing a Dynamics 365 Partner handle this for you. A good partner will strategise licensing and have context of your business needs and will be able to identify ways to reduce overhead. For example, you have a licence for Sales Pro for a user in your business, when a Teams licence is sufficient due to their role only requiring limited access.

Is there a cooling-off period?

You can trial a solution for 30 days, after which point you will need to do a 12-month commitment or alternatively you can pay for individual months at a 20% price premium. If you work with a qualified Microsoft Partner, they will mitigate this issue as flexibility is planned into the licensing and solution strategy.

Is there a full Dynamics 365 licensing guide?

Yes, you can download the full Microsoft Dynamics 365 licensing guide, which is updated monthly.

Do you need a Dynamics 365 Licensing Partner?

At Serversys, we've been looking after organisations licensing for many years. We don't just buy on your behalf, but we will work with you to find the best strategy so you don't overpay and get what you need, when you need it. We have delivered this service from Small-Medium businesses to blue-chip companies across many sectors such as finance, automotive and healthcare. We support licensing for fresh Dynamics 365 solutions and build a plan that is aligned with the customisation and unique requirements of your business. If you want to move from your existing partner, we can do this too in a pain-free transfer process. If you think this is what you need, please fill in the form below and we'll be in touch to discuss how we can support you.