Is Dynamics 365 data now “free” in Microsoft Teams?

In the opening keynote for Microsoft’s partner conference Inspire 2021, Satya Nadella stated the following:

Wow! That’s a major licensing related announcement – with not too much details to go with it yet. The feature is also covered in the summary blog post “From collaborative apps in Microsoft Teams to Cloud PC—here’s what’s new in Microsoft 365 at Inspire.”

Clearly this is quite a big factor for Microsoft when competing against the likes of Salesforce. The features are therefore unlikely to be merely on a “check the box” level that the competition could undermine with their counter arguments. Obviously Teams is the platform that Microsoft is betting pretty much everything on, so a deeper integration with Dynamics 365 is hardly a surprise.

The brand new 2021 Release Wave 2 release plans for Dynamics 365 that came out on the same day have multiple references to new Teams integrated features:

• Sales: Collaboration using Microsoft Teams (6 sub items)
• Service: Increase agent productivity with contextual collaboration using embedded Microsoft Teams
• Marketing: Create a webinar registration experience in Teams, then design the participants’ journey in Marketing with a few clicks
• Field Service: Collaborate throughout the work order lifecycle with embedded Microsoft Teams
• Human Resources: Employee leave and absence experience enhancements in Microsoft Teams

…And I won’t even go to things like Mixed Reality. You get the idea by now: if a Microsoft product doesn’t have any Teams integration today then it might as well be nearing the end of its natural lifecycle.

Collaborative apps in practice

Today we’re limited to the product marketing materials published by MS, but let’s try and make the most of it in our feature analysis and licensing speculation. Starting from the Dynamics 365 + Microsoft Teams landing page, we can watch a promotional video that includes some UI footage of the collaboration scenario. To start off, sharing Dynamics 365 records into a Teams channel is obviously a key to unlocking the collaborative scenarios, so a new experience for attaching records like opportunities or accounts will be provided:

From the resulting Adaptive Card we see that the user is offered not just an option to “open in Dynamics 365 for Sales” but also to “edit in Teams”:

We don’t get to go very deep in this video, so let’s switch over to the Inspire session called “The Cloud Built for a New World of Work” where Alysa Taylor introduces the Teams + Dynamics 365 story to the MS partner audience. The story has a similar “attach a Dynamics 365 record to a channel message” scenario. Here the button says “View details” rather than “Edit in Teams” but since these videos probably need to created well in advance, we can assume these two feature to be the same.

Here we then get to see the actual details/editing experience. An opportunity record opens in a modal dialog within the Teams client’s channel context (no tabs) and presents a simplified form with key fields in the Summary tab. All the fields appear locked here, but the dialog has a Save button, so presumably the security roles from Dynamics 365 will be reflected here on the UI level already.

Next we see the Activity tab, which is again a simplified version of the full Timeline view found on a Model-driven Power Apps form (meaning Dynamics 365 for Sales et al.).

The user in question has the ability to add a new note for the record, which will get stored within Dataverse rather than just the Teams thread. Tasks also appear to be an option presented in this modal window.

What happens next in Alysa’s demo scenario is not entirely clear from a licensing perspective. The marketing executive performing the actions in this demo has also the access to any Dynamics 365 views pinned as Teams tabs. Also the full forms are accessible, including Command Bar buttons allowing record creation and editing.

Whether these rights have been inherited merely from the Teams collaboration scenario depicted in the demo is not disclosed here. The user might as well be a fully licensed Dynamics 365 user and MS just wants to show off the seamless experience of working with CRM data within the Teams client.

In addition to the licensing story, there’s also the access management angle that isn’t revealed in detail yet. Obviously not any person within your tenant will just automatically have access to records inside a Dataverse environment. Therefore the process of sharing the record with non-users of Dynamics 365 when attaching a record into a Teams message and mentioning users within a message is likely to have a lot of interesting new functionality for any Dynamics 365 admin or solution architect to consider.

Contextual presentation of business application data inside Teams is not limited only to channel messages or chat. Meetings can also be associated with Dynamics 365 records in the future, thus opening up further possibilities to make use of this new “free” access to Dynamics data for any Teams user.

Licensing implications in practice

Let’s think about the broader context of this licensing announcement. The big picture of what Microsoft wants to draw with their Collaborative Apps story is a stack like this:

When I’ve drawn a similar diagram for customers I’ve labelled the top layer as “OS” rather than UX. Understandably MS may not want to rock the boat that much yet, keeping in mind that they also have concrete operating system announcements like Windows 365 and Windows 11 to pitch to the partner audience. Still, the logical layering is the same and that’s what matters. Teams is how MS can regain its relevance inside the users’ devices that are today running Android, iOS or even Linux. Therefore making things not just easy to use but “free” to use within Teams makes perfect sense.

Dataverse for Teams has considerably lowered the barrier for organization wide usage of the low-code apps built on Power Platform tools, with its bundled rights to basic Dataverse features for no additional fee if used within Teams. To me, this Inspire announcement of unlocking access to Dynamics 365 data “without the licensing tax” (Microsoft’s words, not mine) is a logical continuation on this same path. You won’t get full features for free, but the upsell potential with the massive audience of Teams users globally is what makes this bargain lucrative for MS product teams.

From a Dynamics 365 perspective, there are similarities here to the earlier Team Member licensing model that MS launched back when their CRM+ERP vision of a 365 cloud saw the light of day exactly 5 years ago. It was a $10 license that helped to close deals but ended up being a big headache for MS in practive. The launch of Power Apps as the official platform SKU eventually made the TM license pretty much redundant.

Whereas Power Apps is the story for custom low-code apps, it isn’t exactly meant to be used for Dynamics 365 scenarios (if you ask MS). Yet the licensing terms currently do make it an interesting option for unlocking light use of Dynamics 365 data. Especially given the coming 50% price drop for Power Apps licenses, the fact that you can use these in a Dynamics 365 environment would certainly make them ever more interesting for customers to evaluate as an option.

Depending on how far the read rights on Dynamics 365 data for Microsoft Teams users will actually go, this latest change might be able to deflect some of these Power Apps “misuse” threats. It’s a fact that not such a big share of a typical organization’s employees will need to work daily with updating CRM data, yet from a reporting and data referencing perspective it’s pretty darn valuable if you have access to the records within the customer data master system.

If there’s one thing I hear from pretty much every customer (and many partners), it’s that they think Microsoft Business Applications licensing is complex. I’m hoping that whatever this new Dynamics 365 + Teams licensing announcement turns out to be in practice, it wouldn’t create more seemingly arbitrary lines for what data can be used in which context for what license. I’ll need to revisit this topic once we have the full story on today’s Inspire 2021 announcement, to see which way the licensing model is turning this time.

Update 2021-07-22

From the comments section in the original Dynamics 365 product team blog post for this announcement, we can gather the following details around Dynamics 365 privileges that will be embedded within Microsoft Teams:

• Scope: “We are initially launching Teams experiences for Dynamics 365 Sales and Dynamics 365 Customer Service but working on the possibilities of additional experiences across the Dynamics 365 portfolio.” So, further CE scenarios like Field Service and the ERP side for HR, FinOps, BC will be covered later.
• Schedule: “These experiences will start to become available as part of our Dynamics 365 Wave 2 release which begins in October.” As expected, 2021 Wave 2 release plan is where you should go and check the current target dates for public preview / early access / general availability dates for these Teams related features.
• Technical implementation: “We are entitling all paid Microsoft Teams users with ‘Team Members’ level access to Dynamics 365 allowing Teams users to read Dynamics 365 data and action upon designated scenarios. These new connected experiences between Dynamics 365 and Teams will make it easier for Teams users to access Dynamics 365 records but only from within Microsoft Teams.” Quite similar then to the earlier technical enforcement of Team Member licensing on app module level. Except that direct browser access outside of Teams clients will be restricted, so presumably the current Dynamics 365 Team Member license SKU will still remain in place at $8 per user per month.