Dynamics 365 Plan Licence Withdrawn
When Microsoft introduced Dynamics 365, a Plan licence was promoted as the most cost effective way to access all capabilities across its Customer Engagement apps.
However, Microsoft now says that overwhelmingly the majority of users who are licensed with the Plan SKU tend to only work within the confines of one Dynamics app. In these instances, a single app would be a more cost effective licence compared to a paying a premium for the full stack of Plan functions that aren't used which means value isn't aligned to price.
To move away from a 'one size fits all' licensing approach, Microsoft removed Dynamics 365 Plan licensing with effect from 1 October 2019.
In this post we'll aim to explain what this change means for your business based on the information that Microsoft has shared, and what steps you'll need to take.
What is changing?
Since Dynamics 365 was unveiled 3 years ago, the main licensing choices for Customer Engagement / CRM have been: Team Member (for light usage needs), functional role based apps (including Sales and Customer Service) and the Customer Engagement Plan.
From October, Microsoft will no longer offer the Plan as it moves to an 'a-la-carte' style licensing offering.
With the removal of the Plan licence, users will be licensed on a per app basis, or using the Team Member license.
How will the new app licensing structure work?
Upon Dynamics 365 renewal, an administrator would need to define a Base licence from the following choice for each user is currently licensed with the Customer Engagement plan:
- Dynamics 365 Sales Enterprise
- Dynamics 365 Sales Professional
- Dynamics 365 Customer Service Enterprise
- Dynamics 365 Customer Service Professional
- Dynamics 365 Field Service
- Dynamics 365 Project Service Automation
If individual user needs can be met by a single app, a Base app licence alone will be sufficient.
At this point it is worth referencing two important licensing changes that have been made during recent years as these may help steer you towards a single app.
Sales licences now include capabilities enabling users to create cases (previously this would require Sales + Customer Service)
Customer Service licences now include capabilities allowing users to create leads (previously Customer Service + Sales would be needed)
With the UK commercial price for a Plan licence @ £86.70 per user / month and an individual Enterprise app @ £71.60 per user / month a saving could be gained by moving from a Plan licence if user needs can be met by a single app.
Attaching Dynamics 365 apps
For each user requirement, where two or more apps are required, an administrator will need to Attach the appropriate licence(s), available at a discounted rate, to set the required combination.
For example, this would enable the following scenarios:
Base Licence: Sales Enterprise + Attach Licence: Customer Service Enterprise
Base Licence: Customer Service Enterprise + Attach Licence: Field Service
Base Licence: Field Service + Attach Licence: Sales Enterprise + Attach Licence: Customer Service Enterprise
There is no difference in the functionality of an individual app regardless of whether it is licensed as the Base or an Attached application. These are only differentiated in price.
When a user is equipped with a Base licence for an Enterprise app and a single Attach licence, Microsoft says the total cost will be identical to the current Plan price and initial UK pricing confirms this @ £15.10 per additional app / user /month.
As a result, an increase in user costs compared to Customer Engagement Plan licensing would only occur if users migrate from a Plan to a Base app with two, or more, Attach licences.
Other Attach considerations
Some important points to consider with the new licensing model are:
- Administrators may only assign Attach licences if a user has one of the above valid Base licences.
- When purchasing multiple apps, the Base license must be the highest priced license.
- The Project Service Automation app can only be purchased as a Base licence
- We've focused on the Customer Engagement apps in this post but administrators will also be able to mix and match the D365 Unified Operations apps with CE apps to meet each user requirement. This does remain subject to the requirement that the Base licence must be the highest priced.
- Ordinarily, a user will only have one Base license but an exception would be in licensing the Talent app as this won't be available as an Attach licence.
- Several Dynamics 365 add-on products will not be available as an Attach licence. These include: Sales Insights and Customer Insights.
In 2018, Microsoft introduced a new Professional licence SKU for its Dynamics 365 Sales and Customer Apps providing core capabilities for these roles at a lower monthly rate.
Professional licences can be used in the new licensing model and these reflect a lower Base price compared to their Enterprise equivalents. It is important to note that an existing condition still applies whereby Professional and Enterprises licences cannot be mixed and matched among users on the same Dynamics 365 environment.
For example, the following licensing scenario would be supported in combining full Dynamics 365 sales capabilities with core customer service and case management functionality:
Base Licence: Sales Enterprise + Attach Licence: Customer Service Professional
However, by equipping at least one user with Customer Service Professional, it would not be possible to select Customer Service Enterprise as either the Base or Attach licence for any other user on the same Dynamics 365 environment. In this illustration, by selecting Customer Service Professional it wouldn't be possible to mix and match with Customer Service Enterprise on the same tenant.
Finally, where a Professional licence is selected as a Base licence an Enterprise or Field Service licence cannot be attached.
Dynamics 365 for Marketing
Dynamics 365 Marketing is a tenant-based licence so the new per user Attach licence model won't apply to this app. As a result, the Marketing app can only be used as a Base licence.
With the demise of the Customer Engagement Plan, Microsoft is also withdrawing an entitlement whereby Dynamics 365 customers with 10 or more Plan users can access the Marketing app for up to 2000 contacts.
We understand Microsoft will offer a transitional SKU enabling qualifying Plan customers to continue using the Marketing app at a reduced rate.
A separate SKU shall enable customers with 10 or more full Dynamics 365 licences to licence Dynamics for Marketing at £565.60+VAT per tenant / month.
The regular rate of Dynamics 365 for Marketing from October 2019 is quoted @ £1131.20+VAT per tenant / month.
Read more about Dynamics 365 for Marketing licensing.
Existing Dynamics 365 customers will not be impacted until the renewal of their agreement.
At this point, it will only be possible to transact licences on the new model as Customer Engagement Plan licences will no longer be available to new customers.
This will require administrators to identify what Base licences will be needed for each user and which Attach licences, if any, would be needed for some, or all users.
Existing customers who are licensed with the Customer Engagement Plan on the Cloud Solutions Provider (CSP) can auto renew Plans until 30 June 2020.
There are several ways that Preact can help you manage this process and evaluate the most effective mix of licenses for your users.
Our free license check service will review the actual usage of each Dynamics 365 user within your environment to confirm what licence(s) each person should be equipped with. For example, this will highlight potential savings that could realistically be achieved by moving individuals from the Customer Engagement Plan to a single app.
Speak to us to have your licensing questions answered and plan for this upcoming change. We will also be able to help if your organisation's transitional Dynamics CRM Online offer is shortly expiring.
We'll help you understand the different capabilities between Professional and Enterprise licences, Team licences as well as each Customer Engagement app licence.
- Comparing Sales Pro and Sales Enterprise Licences
- Comparing Customer Service Professional and Enterprise Licences
We are here to help with your questions and simplify your licensing of Dynamics 365. Get in touch for answers and advice from our Microsoft licensing gurus.