Demystifying Dynamics 365 & Power Platform Licensing: Part 1

At Dynamics Power 365 Saturday London 2019 I presented on a topic that I had never attempted to cover in any public forum earlier: licensing. In fact, I bet it’s an area most members of the Dynamics 365 community would want to avoid touching at all cost in their sessions. It’s even worse if you’re a technical specialist working for Microsoft, because then you’re under strict guidance on not to make your own statements on an area as delicate as licensing (let alone pricing) and instead direct the customers to talk with a department focusing on these commercial matters.

Yes, it might feel like explaining quantum physics as you travel deeper into the maze of a software product licensing matrix built from license types and feature bullets, accompanied by pages of text full of phrases that feel as if they’re intentionally designed to make you trip over a detail you failed to notice. Then again, this isn’t really that much different from the attention to detail that is required when designing a technical solution made of software bits that must work together. A proper solution needs to be viable both from a technical and commercial perspective, so there’s no point in closing your eyes and hoping that the client forgets to ask about the license requirements.

As with the technical side, you don’t need to memorize all the details that are found in the official licensing documentation. You just need to be aware of how the big picture looks like, what factors may affect the type of license needed and where to search for the exact answer. Like with the product itself, also the licensing model is constantly being updated and you’ll need to keep up with the changes to stay on top of the licensing game. Now when the Dynamics 365 and Power Platform product lines are being united not only on technical level but also commercial, it’s particularly interesting to see how Microsoft will align these two license models.

D365_Saturday_London_-_Demystifying_D365_Power_Platform_Licensing

You’ll find my full deck from the London event already on SlideShare my Slides archive, so feel free to browse through the story. I’ve divided the blog post into two parts where I highlight some of the more interesting graphs, in an attempt to grab your attention before throwing 54 slides of PowerPoint at ya! In part 1 I’ll cover the Dynamics 365 side and the next post talks about Power Platform.

Dynamics 365 recent licensing updates

Licensing enterprise software has never been too simple. As the product suites grow, they tend to accumulate all sorts of weird exceptions to the general rules that used to define the basic licensing model. Whenever a brand new model is introduced, the promise tends to be “we’ve simplified our licensing!” and yet you end up with documentation twice the length of the earlier model. Such is life, and Dynamics 365 Customer Engagement is one part of it. Here are the main concepts you need to understand in order to grasp the details of how the product’s licensing works today:

Even though the anticipated split between Enterprise Edition and Business Edition never materialized for Dynamics 365, we did get some alternatives to the “real” Enterprise plans and apps with the introduction of Sales Professional and Customer Service Professional licenses in 2018. To compensate for the cheaper price, there are a number of limitations imposed on the Professional apps. Some of the features you may have come to take for granted as an XRM core capability are stripped away if you opt for the cheaper license:

There is of course an even cheaper and much more widely used license type: Team Member. Back at the time when Dynamics 365 brand was announced, Microsoft still appeared to be in denial about the business potential of this cloud service as a true application platform and neglected this aspect in their licensing model. As a result, Team Members were granted unlimited rights to custom entities, thus opening a back door for XRM scenarios. Now when the winds have changed with the Power Platform revolution and platform licensing is a thing with PowerApps P2, that door had to be slammed shut with changes to the licensing terms. First, the access to the most central entity of most CRM systems, the account, was limited to read only for Team Members. Second, the use of custom entities was restricted and the following guidance is now given for choosing the right license type:

An important aspect for both Professional and Team Member license holders is that there will soon be more technical enforcement of the limitations for customized scenarios. Specifically, the App Module concept will be used to determine what the user can access. You can have 15 editable custom entities per app and grant Team Member users access to all of these (+ global read rights to all Dynamics 365 entities). However, configuring your own App Module will be off limits, as Microsoft wants to ensure you are really just using the 1st party apps with extensions and not something completely custom – unless you pay for Enterprise apps or PowerApps P2.

The more recent the apps in Dynamics 365 product family, the more interesting their licensing models appear to get. Dynamics 365 for Marketing launch was of course a big event in 2018 and the per instance licensing model combined with the per contact pricing is a story you’re better off reading from the blog of a fellow MVP. Recently we’ve seen the AI apps march onto the stage and Dynamics 365 AI for Sales already getting a license type available for purchase. Who gets what where isn’t all too clear when these AI powered features are offered via two different application UI’s for both those with an AI license and those with just the Sales Enterprise one:

Stay tuned for part 2 where I’ll dive deeper into the PowerApps side of the licensing pool.