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Microsoft reveal that Dynamics 365 Plan Licence is to be scrapped

After Microsoft first launched Dynamics 365, a Plan Licence was earmarked as the easiest and cheapest way for organisations to be able to access all the capabilities across its Customer Engagement applications.

After much research and internal discussions, Microsoft came to the conclusion that most users who are licensed with the Plan SKU largely work within just one Dynamics app. Therefore, in these cases, a single app would be a more financially viable licence rather than paying a significant premium to access the full stack of apps without even using them.

In light of the above and to shift away from the ‘one size fits all’ licensing approach, Microsoft has revealed that it will be scrapping the Dynamics 365 Plan licence which will come into effect at the start of October.

NB: If your business is currently licensed with the Customer Engagement Plan you will need to move users to the new licence types that Microsoft will be delivering. You will need to do this quickly if your next scheduled Dynamics 365 renewal is in October 2019.

The purposes of this article are to help you understand how this change impacts on your business based on the information that Microsoft has revealed and the actions that you’ll need to take.

What is happening?

Following the launch of Dynamics 365 in 2016, the main licensing options available for Customer Engagement /CRM have been the following:

  • Team Member (for light users)
  • Functional role based apps (also covering Sales and Customer Service)
  • Customer Engagement Plan

After October, Microsoft has said that it will no longer offer the Plan as it moves to an ‘a-la-carte' style licensing offering.

Following the removal of the Plan licence, users will only be licensed on a per app basis or through the use of the Team Member license.

What does the new app licensing structure look like?

When a Dynamics 365 renewal is due, an administrator would have to select 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

To put this into context, if an individual user needs can be satisfied through the use of a single app, then a Base app licence will cover it.

It is worth noting two critical licensing changes that have been introduced by Microsoft in recent times as they may help guide you towards a single app.

Sales licences now have the functionality that will allow users to create cases.

Customer Service licences now have the functionality that will allow users to create leads.

Taking this into account, the UK commercial price for a Plan licence is priced at £86.70 per user per month with an individual Enterprise app priced at £71.60 per user per month, therefore it could be more cost effective to move from a Plan licence if a user needs can be satisfied by a single Dynamics app.

Adding Dynamics 365 Apps

In the case where individual users require two or more apps, an admin will need to add the appropriate licence (s), which will be available at a discounted rate to set the necessary combination.

To put this into context in the form of a few examples:

User A

Base Licence: Sales Enterprise + Attached Licence: Customer Service Enterprise

User B

Base Licence: Customer Service Enterprise + Attach Licence: Field Service

It is important to note that the function of each individual app remains the same with the only difference being the price.

If any user has a Base Licence for an Enterprise app and a single Attach licence, Microsoft has stated that the overall cost will be exactly the same as the current Plan price and from the early UK pricing it is reflected in this as £15.10 per additional app per user per month.

What this means is that customers will only see an increase in overall costs compared to Customer Engagement plan licensing if users are moving from a Plan to a Base app with more than one Attach licence.

Other things to consider around Attach Licences

Along with the previous points around the new licensing model above you will also need to consider the following:

  • Admins are only allowed to assign Attach licences if the user has one of the above Base licences.
  • When buying more than one app, the Base licence will need to be the highest priced one.
  • The Project Service Automation app is only allowed to be bought as a Base licence.
  • Usually, a user will only have one Base licence, however the Talent app would have to be a Base licence as it’s not available as an Attach licence.
  • Some Dynamics 365 add-on products will not be available as an Attach licence such as Sales Insights.

What is the latest with Professional Licences?

Back last year, Microsoft added a new Professional licence SKU for all its Dynamics 365 Sales and Customer Apps which gave all users the core functionality at a lower monthly cost.

It is important to note that Professional licences can be used as part of the new licensing model and these are reflected in a lower Base price against their Enterprise equivalents. You will also need to take into account the fact that an existing condition still applies where Professional and Enterprise licences are not allowed to be combined or matched among users from within the same Dynamics 365 environment.

To put this into context in the form of an example, the following licensing scenario below would be supported in aligning full Dynamics 365 sales capabilities with core customer service and case management functionality:

Base Licence: Sales Enterprise + Attach Licence: Customer Service Professional

However, if you had one or more users with Customer Service Professional, you would not be allowed to select Customer Service Enterprise as either the Base or Attach licence for any other user from within the same Dynamics 365 environment.

In the diagram above, you will see that you are unable to combine both Customer Service Pro and Customer Service Enterprise on the same tenant.

Also, when a Pro licence is added as a Base licence an Enterprise or Field Service cannot be added.

So what happens with Dynamics 365 for Marketing?

You will be pleased to know that as Dynamics 365 for Marketing is a tenant-based licence the new per user Attach licence model won’t be applied to this app. Therefore, you will see that the Marketing app can only be used as Base licence.

Following on from the scrapping of the Customer Engagement Plan, Microsoft has also revealed that will be withdrawing an entitlement where Dynamics 365 customers with 10 or more Plan users can access the Marketing app for up to 2000 contacts.

To compensate for this, we are under the impression that Microsoft will be offering a transitional SKU enabling qualifying Plan customers to allow them to continue using the Marketing app at a lower cost.

A separate SKU will allow customers with 10 or more full Dynamics 365 licences to licence Dynamics 365 for Marketing at a reduced rate of £565.60+VAT per tenant / month with the full rate from October 2019 believed to be £1131.20+VAT per tenant / month.

What actions do I need to take?

The above changes will be in operation from the 1st of October 2019. Existing Dynamics 365 customers will not impacted by these changes until the renewal of their agreement. When it gets to this stage, it will only be possible to transact licences on the new licensing model as the Customer Engagement Plan licences will not be available anymore.

Therefore, admins will need to find out what Base licences will be required for each individual user and which Attach licences, if required, would be required for some or all users within the business.

If your Dynamics 365 agreement is coming up for renewal in October or November, this will need to be addressed straight away so that users can easily be migrated to the new licensing SKUs.

How can Advantage help your business with these licensing changes?

There are a number of ways in which Advantage can help you streamline this process and help you to assess the most effective mix of licences needed for your users.

We are able to offer your business a free licence check where we will be able to review the actual usage of each Dynamics 365 user within your environment to see what licence (s) each individual requires. To give you an example of this, this will help to highlight any potential savings that could be achieved through moving individuals from the Customer Engagement Plan to a single app.

Get in touch with our team of experts to discuss your licensing questions and how your business can plan for this upcoming change.

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