Tips and Tricks for Dynamics 365: Licensing
During the evolution of Microsoft Dynamics 365, we’ve witnessed some fairly significant changes in the licensing model. Occasionally, these are a little difficult to comprehend.
However, it is also vital that you do understand the licensing requirements for your organization. This is because in addition to providing appropriate legalities, assigning proper licensing will minimize the overall cost of ownership. You don’t want to pay for licenses that you don’t end up using.
We’ve got your guide on Microsoft Dynamics 365 licensing – the history, recent changes, and how to select the right licensing mix for your business.
A Lookback at Microsoft Dynamics Licensing
In the early days between the initial IBM Axapta launch in March 1998 and September 2011 when we moved to Dynamics AX 2012, Microsoft Dynamics AX was licensed on a concurrent license basis. This essentially meant that an organization would purchase a specific number of user licenses. At any one time, a number no greater than the licensed quantity could physically log into the system.
A Dynamics AX installation could feasibly have included many hundred users, but logins would only be possible up to the concurrent license limit. There was also a distinction between the core product functionality and additional modules, which could be added to enhance the core functionality — such as human resources, enhanced production and retail to name a few.
With the release of Dynamics AX 2012 the licensing model changed. The base package shipped bundled with all functionality included, but with a slightly different licensing model called “Named User” licensing. This essentially meant that any internal user accessing the system needed to be allocated a specific user license.
Based on the different functional needs of different users, different license types provided the required functionality.
- A full access user, such as a system administrator or accountant, might have been assigned an “Enterprise” license
- An order entry clerk might be have been assigned a slightly lower level “Functional” license
- Employees responsible for fairly small and discrete processes such as goods inward or picking might have been assigned a “Task” license
- Light-touch human resource users might have been assigned a “Self Service” license, providing access to the human resources self-service portal
- A license type called “Device” was used for shared devices, such as warehouse PCs, handheld barcode devices, and so on
Dynamics 365 License Naming Changes
With the release of Microsoft Dynamics 365, the licensing structure remained consistent as a named user model, but the names of the licenses changed slightly.
- The Enterprise license was renamed “Full Operations Plan”
- The Functional user was renamed to an “Activity” license
- The Self-Service license was termed a “Team Member” license
- Device license naming remained as was
These changes were fairly aesthetic and mainly concerned naming.
However, that all changed in October of 2019.
New Dynamics 365 Licensing
In October of 2019, Microsoft changed the top-level Full Operations license, to allow greater granularity of license types.
They split the combined Full Operations Plan license into two separate licenses:
a) D365 for Finance; and
b) D365 for Supply Chain
These were referred to as Base licenses.
What does this mean for you?
Within an organization, it isn’t uncommon for some employees to have a dual role, needing access to both finance operations and the supply chain.
Microsoft recognized that charging the full price for each license could potentially make D365 have a higher cost of ownership than other competing business systems.
To reduce this impact, Microsoft introduced a lower-priced Attach license, which essentially allowed the required finance or supply chain license functionality to be “attached” to the base license. This provides the same functionality as the previous combined license, but at a lower cost.
Making Dynamics 365 Licensing Work for Your Organization
When planning for the deployment of Dynamics 365 in your organization, licensing needs to be considered early on in the process to determine the most cost-effective licenses for your subscription.
The easiest way to do this is to take the standard security roles provided by Microsoft, which mirror real-world workplace roles. As an example, this might look like:
- CEO: Finance license
- Buying Agent: Activity license
- Quality Control Clerk: Team Member license
You can do this for each user in your organization to determine the overall license mix and quantity. Some roles may require multiple capabilities under licensing.
For example, in addition to the base Finance license, the CEO may also need to look into and action supply chain information. This might mean assigning a Supply Chain Attach license, providing the ability to view and update both finance and supply chain information.
Microsoft licensing can sometimes be complex to comprehend. SHEA Global can answer any questions you have at our free, live web series, Quiz the Wiz. Our Wiz Panel is answering all of your questions, from licensing needs to supply chain to staying productive while working from home, and much more.
Can’t make a Quiz the Wiz session? Reach out to us today for further help on licensing.