How to Choose the Best Microsoft Dynamics 365 Licenses for SMB's

The aim of this post is to provide some clarity about the licensing rules and options for Microsoft Dynamics 365 to help SMB's choose the best, and most cost effective, mix of licenses for their users.

When we are first contacted by organisations that are already using Dynamics 365, it is often apparent that they are paying more for their licenses than they need to be. This is additional cost being paid every month simply because the best license types, or eligible offers, were not selected when the product was activated.

Sometimes, the individual organising the Dynamics implementation wasn't aware of all the licensing options available but in some instances external partners have landed clients with an unnecessary extra cost due to poor licensing advice. Measured over the term of a Dynamics 365 annual agreement, this can easily amount to a significant expense. 

We've previously shared content about Dynamics 365 licenses including our post about team member licensing and our concise licensing guide.

If you want chapter and verse on this topic, the official Microsoft licensing guide is readily available, even if it is not quickly readable.

In this post we'll feature a series of licensing scenarios to discuss the options available and hopefully offer some useful and cost saving guidance to help you choose the best Dynamics 365 license mix for your users.

Mistakes made during the licensing of Dynamics 365 can prove expensive and are not quickly remedied. If you are planning to go live with Dynamics 365 contact Preact to check you have selected the best value licensing options for your requirements.

Key Dynamics 365 Licensing Points

At the outset, it is worth listing some important points about the licensing of Dynamics 365:

  • There is a choice between licensing individuals as 'full' or 'light' users of Dynamics 365
  • Team Member is a low cost option designed for 'light' users who only need to carry out basic functions or access data
  • Full users can be licensed with a role specific app, e.g. Sales or Field Service
  • Or, full Dynamics 365 users can be licensed with a Plan that combines multiple apps
  • The Customer Engagement Plan is the most popular covering Dynamics 365 Sales, Customer Service, Project Service and Field Service apps  
  • A plan will always be best value if a user requires functionality across two or more apps that are included in a single plan
  • Each Dynamics 365 customer can have a mix of users who are licensed with Plans, individual apps and Team licences
  • Licences include capability to access Dynamics via web, mobile and tablet and from Outlook
  • For the purposes of this post we are focusing on licensing Dynamics 365 named users but there are also options for device licensing whereby several individuals would use the same device to access Dynamics at different times.

Don't Forget the SMB Offers!

A longstanding Microsoft offer is available for new SMB customers that have not previously been registered with Dynamics 365. This is important to remember as the promotion offers a significant reduction compared to the regular commercial pricing.

  • The Dynamics 365 Sales app is available at a reduced rate as part of the SMB offer - subject to a maximum of 25 user licences
  • Or, choose another variant in this offer to licence users with the full Sales & Customer Service apps - subject to a 50 user licence limitation
  • Reduced SMB team member pricing is available subject to a maximum of 150 user licences

There are a few qualifying notes to highlight:

The first two options can be mixed and matched subject to these user limits. For example, the SMB offer could be used to licence 10 users with the Sales app and another 10 users with the combined Sales / Customer Service app. 

However, a scenario to licence 20 user licences of the SMB Sales app promotion and combine this with 40 users of the SMB Sales & Customer Service app would breach the teams of this promotion as the 20 x Sales app users are counted towards the 50 user limit on the second Sales / Customer Service licence promo.

If these SMB promotion limits are subsequently exceeded, customers will no longer be eligible to the offer. At this point the full commercial rate would immediately be applied for all user licences.

New customers that purchase these discounted user licences will be able to renew their annual Dynamics 365 subscriptions at the same rates through to 1 December 2019.

Dynamics 365 Licensing Scenarios

EXAMPLE #1

An organisation new to Dynamics 365 is planning to deploy the system in the cloud for its sales team of 10 people. Each of these individuals will need permissions to create leads and edit sales opportunities. Up to 2 further individuals will want to carry out basic functions including reviewing active opportunities, using CRM dashboards and scheduling activities.

For this scenario, the dedicated Sales app will be the best fit as this is aligned to the team's specific role. As there is no indication that any of these individuals would need the functionality from other apps such as logging cases or raising work orders a Plan would not be appropriate.

In some instances senior directors and business owners don't need functionality to create or edit sales leads and opportunities themselves as they will simply want to monitor and report on the organisation's sales performance and activity. In this situation, licensing these individuals with a full Sales app licence is a more heavyweight solution than is needed when the lower priced 'Team Member' licence is a better match for their user needs.

With fewer than 25 user licences this requirement falls within the boundary of Microsoft's SMB Sales App promotion so we would recommend:

  • 10 x Dynamics 365 for Sales App (SMB Offer)
  • 2 x Dynamics 365 for Team Members (SMB Offer)

Failing to select the SMB offer with this requirement and activating Dynamics 365 with the regular license pricing would incur an unnecessary additional cost of more than £5000 for this organisation each year!

EXAMPLE #2

A company is migrating to Dynamics 365 from an entry-level CRM software. They have a national sales team of 35 individuals and a marketing team of 3 people who all need full access to Dynamics 365. In addition there are 10 individuals who need basic access to update accounts, contacts, dashboards and have access to list views of other entities. 

The number of user licences required by the sales team immediately exceeds the 25 user limit of the SMB Sales App promo.

However, don't forget the alternative SMB Sales & Customer Service promo!

There is no indication that these users need case management, or any other service functions, but these functions can always be switched off and this promo is significantly more competitive compared to the full price for the Sales app alone.

Although it is named 'Sales' this app also includes some marketing capabilities. These include marketing lists and campaign entities so the marketing team could also take advantage of the SMB Sales & Customer Service promo.

For the marketing team this provides the foundation of native functionality that is needed to connect Dynamics with their preferred marketing automation service such as ClickDimensions.

As the remaining 10 users do not need to update opportunities, leads or marketing lists they can all be assigned team member licensing as part of the SMB promotion

  • 38 x Dynamics 365 for Sales App + Customer App (SMB Offer)
  • 10 x Dynamics 365 for Team Members (SMB Offer)

For this example, ignoring the SMB promotion and instead activating licensing for users on the Dynamics 365 Sales app at the default price would add an extra cost of more than £10,000 to the company's annual subscription.

EXAMPLE #3

A call-centre is implementing Dynamics 365 to its 50 strong support team who will use the system to manage service issues reported by customers online, by phone and email. A further 15 sales and marketing users require full access to the system and of these, 5 will need the capability to update support cases and create sales leads. The organisation also has requirements for some 10 admin staff and members of its management team to have basic access to Dynamics 365.

This scenario is immediately beyond the threshold of the SMB offer so in this instance the regular Dynamics 365 price list would apply.

The majority of these individuals have usage needs that are aligned to their specific role with the exception of the 5 people who have a crossover need to manage cases and well as sales leads.

This is exactly the type of scenario that the Dynamics 365 Customer Engagement Plan is designed for as it includes full access to the Sales and Customer Service apps (as well as the project service and field service apps).

In this example, these are the only users where a Plan would be appropriate.

For the majority of the company's users, the Customer Service app will suffice while 10 users across its sales and marketing teams only require the Sales app.

It's important to remember that Dynamics 365 licensing rules allow the flexibility to mix and match full licences. 

We have seen situations similar to this where every user has been licensed with a Plan which would be a needlessly excessive and expensive solution that is inconsistent with the functions and capabilities that users actually need. 

We would recommend licensing for this example of:

  • 5 x Dynamics 365 for Customer Engagement Plan
  • 50 x Dynamics 365 for Customer Service App
  • 10 x Dynamics 365 for Sales App
  • 10 x Dynamics 365 for Team Members

EXAMPLE #4

A maintenance company will roll out the initial phase of its new Dynamics 365 system to a team of 24 people. Of these, 12 are field service engineers who are dispatched to carry out equipment installations and undertake service and repair jobs. 2 members of staff are responsible for managing these work orders and scheduling the companies technicians. Dynamics will also be deployed to 10 members of its customer service team who provide first level phone support.

The main requirement for field service functions immediately means that the SMB promotion will not be valid as this is limited to Sales and Customer Service functions only.

Each field based technician would need to be licensed with the full field service app as it will enable this personnel to access and complete work orders through the mobile Dynamics 365 field service app. The two office based members of staff responsible for managing the schedule of these technicians and booking visits would also need to be equipped with the full Field Service app.

For the organisation's customer service team we would need to determine if all, or any, of these individuals need the capability to raise a new Field Service Work Order from a Dynamics 365 Case record. Any individuals who require this overlap between case management and field service would need to be licensed with the Dynamics 365 Customer Engagement Plan. 

This plan combines the full apps for field service and customer service (as well as sales and project service apps which can be switched off as they aren't required in this scenario).

On the basis that the entire customer service team would need the capability to escalate support cases where a visit is needed by raising a work order we would recommend licensing of:

  • 10 x Dynamics 365 for Customer Engagement Plan
  • 14 x Dynamics 365 for Field Service App

If you have any questions about Dynamics 365 licensing and the best licenses and offers for your requirements we'd be delighted to help. Please get in touch to speak to one of our Dynamics experts.

RELATED: Cheat Sheet for Licensing Dynamics 365


Receive CRM and Microsoft Dynamics 365 Updates

If you enjoyed this post, why not join our mailing list to receive emails about the latest updates and events from Preact?