More Licensing Changes for Dynamics 365 (April 2020)

licensing updates dynamics 365

“The more things change, the more they remain the same” – Alphonse Karr

Late last year, with much fanfare and hubbub, Microsoft announced that Dynamics 365 licensing for the Finance & Supply Chain products had changed.  If you follow our blogs you know that the change was, for most, fairly revenue neutral, but involved a more thorough examination of users/usage in order to map out what a company needs to purchase.

The two big issues raised, at that time, were:

  1. No more “plans” for companies using both the ERP and CRM products
  2. Discounts for existing customer had yet to be determined

Well, stop the presses!  Hold your horses!  Things have changed.

Cross Platform Plans

“The best laid plans of mice and men oft go awry” – Robert Burns

As it turns out, market demand, partner feedback and customer responses changed the whole “no more plans” approach.  Microsoft relented.

Check out this easy to read chart:

Dynamics 365 Licensing SKU

Bottom line – if you use multiple product lines there is a way for you to get a rather handsome discount by cross licensing.  Don’t try this at home – work with your Partner,

Existing Customer Licensing – Don’t Get SKU’d

Microsoft finalized the existing customer discounts and, lo and behold, they look a lot like what was there before – roughly 40% off list. With two big changes:

  1. Transitions are no longer guided by user types – this means that if you have 100 named users in AX2012 (regardless of type), you are entitles to the discounted SKUs for 100 named users in D365 (regardless of type).  So, you can upgrade a user’s type at no extra charge.  Remember, don’t do this unless you really need to, no need to pay for a higher user type of you really don’t need it, but it’s there if you want it.
  2. Transition rights are now based on named users in AX2009 and previous versions.  Translation: if you have 200 named users in AX2009, but purchased only 100 concurrent users (based on usage), you own transitional discount rights to 200 users.  This is actually very good news.

Here’s the rub, folks – you have to be sure that your licensing Partner knows what the heck they are doing.  They have to look for the licensing SKUs (on a spreadsheet with thousands of SKUs) that say “from SA” or “from DPC”.

If you’re buying from a CSP, chances are they are familiar with the drill as they likely have specific D365 licensing expertise, but you should still double check to be sure they are giving you the discounted SKU.

For those of you on an Enterprise Agreement (EA), you will be dealing with someone like CDW, or SHi, or TechData to actually fulfill the order. The individual you will be dealing with at these very large companies, has thousands of SKUs to choose from, everything from Office 365 to SharePoint, to SQL to Dynamics 365.  They definitely have no specific expertise in Dynamics 365 and are pressured to sell the highest cost SKUs.  Make sure that they are using the “from SA” or “from DPC” SKUs to price your licenses.  You and your D365 Partner have to be persistent.

Conclusion

You cannot eliminate the complexity of these new licensing models and discounts. It is what it is.  You will need to work closely with your D365 Partner to be sure that your CSP or EA provider is giving you the best deal possible.  If you suspect that your D365 Partner doesn’t understand these models – you need to find one who does.

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