Microsoft has Changed the Dynamics 365 Licensing Game
Those of you who have been using Dynamics 365 for awhile have probably gotten fairly used to Lifecycle Services. But in one of their latest moves to disrupt the status quo to bring a better (in the long run) user experience. Microsoft has announced that they are making some fundamental shifts to the way they approach licensing.
This article is a quick summary of the changes to Microsoft Dynamics 365 licensing. For a deeper dive, we recommend you check out our detailed whitepaper “Transitioning to Capacity-Based Licensing and Unified Administration."
What is Changing with Dynamics 365 Licensing?
The changes will impact many of the Dynamics 365 product licenses, including Finance & Operations (F&O), Supply Chain Management (SCM), and Human Resources (HR). The main shifts include:
- Unified Administration via Power Platform Admin Center (PPAC): Dynamics 365 ERP apps will now be managed alongside other Power Platform apps, using a Dataverse database for consistent lifecycle management across applications.
- Retirement of Lifecycle Services (LCS): To allow for the shift to the PPAC, Microsoft will be phasing out the current management of Dynamics 365 environments in LCS.
- Move to a Capacity-Based Licensing Model: Instead of the previous fixed-cost licensing model, the new approach is based on the amount of database storage consumed by environments, making it more consumption-based.
- New Licensing Structure: Organizations are allocated database and file storage with their licenses, and additional environments can be created based on available capacity.
What is the Timeline for These Changes?
The transition to the new model will occur in 4 key phases:
- Link Phase: Currently operational with integrated ERP apps
- Try Phase: Gradual LCS deprecation and trial PPAC environments
- Operate Phase: Full PPAC administration enabled
- Migrate Phase: Migration to PPAC management, expected in late 2025
What Can We Do About It?
So, a natural question that occurs with all of these changes is to determine what actions your organization needs to take today to prepare. Some of these key steps include:
- Formulating policies for decommissioning unnecessary environments.
- Training staff on the new PPAC interface.
- Testing new features and tools.
- Archiving unused data to manage storage effectively.
How Ellipse can Help with Dynamics 365 Licensing Changes
Ellipse Solutions can assist organizations in transitioning to this new licensing model, offering support in migration, planning, and cost management. If you are already an Ellipse Client, please reach out to your current team. For anyone reading this that isn’t engaged with Ellipse, we encourage you to sign up for our free Licensing Workshop, where you will meet with one of our Ellipse experts and craft a strategic plan for navigating these licensing changes.