Microsoft Dynamics 365 Licensing Guide

Microsoft offers different licensing agreement types and user subscription options for companies like yours across the entire Microsoft Dynamics 365, Dynamics 365 Finance and Supply Chain Management, Microsoft Azure consumption and Microsoft Modern Work and productivity suites. Learn all about your purchasing options for Microsoft software on Microsoft CSP and Microsoft EA. Our Microsoft dynamics 365 licensing guide will help you determine the best licensing agreement and licensing support for your organization. Significant Microsoft licensing savings are available if your organization plans in advance. Get help building your Microsoft EA and CSP licensing comparison from Avantiico.  

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Morten Logstrup

Dynamics 365 Licensing: Pricing and Subscriptions options. What is Microsoft CSP & EA agreements? What is a Microsoft Digital Partner?

If you are like most modern enterprise businesses, you already hold and support a diverse list of Microsoft subscriptions, including Microsoft Office 365, Dynamics 365 Finance and Operations, Microsoft CRM now re-branded to Dynamics 365 for Customer Engagement (CE) and new Microsoft Azure services. In addition to Microsoft cloud subscriptions, you may also have some Microsoft enhancement plans for older on-premise versions of Microsoft Dynamics AX or Microsoft CRM.

Tip: If you already have Microsoft Dynamics 365 or Azure cloud SKU’s (licenses), you can navigate to the Microsoft 365 Admin center. Sign in using your Microsoft Office 365 Global Administrator credentials. From here go to Billing > Products & Services and you will see your Microsoft cloud subscriptions. For each type of Microsoft subscription, you can see how many user subscriptions you currently have in your license subsription.

Microsoft dynamics 365 licensing guide featuring Microsoft existing cloud subscriptions in the Office 365 admin center.

Understanding the Microsoft license pricing for CRM and ERP apps as well as the Dynamics 365 accounting software user pricing or inventory management software user pricing in Dynamics can be challenging for most organizations. New Microsoft products and Microsoft services are offered every quarter and as a result, Microsoft is frequently adjusting prices, subscription models and Microsoft support to align with new offerings and different product SKU’s. 

To learn more about key Microsoft Dynamics 365 subscription changes to Microsoft licensing check out these two Avantiico Microsoft licensing blogs: (Q4 2019) and (April 2020)   


Most businesses have complex Microsoft licensing needs involving everything from a few Azure subscriptions to hundreds of Dynamics 365 Finance, D365 Supply Chain Management licenses. Add to this company wide use of Office with Office 365 users on E1, E3, E5 subscriptions including familiar applications like Excel, Outlook, Word and Microsoft Teams (Skype for Business replacement). A not-so-rare situation for companies that scale quickly is not having the chance to consolidate their Microsoft Subscriptions in order to consolidate and manage license consumption under one agreement. In some cases, customers purchase their licenses from multiple Microsoft Cloud Solution Providers or directly through Microsoft leading to a lack of overview of total license usage and licensing compliance management. 


See a summary of Microsoft’s 2020 licensing policies and terminology to help your business navigate Microsoft licensing, Microsoft Support options and Microsoft subscription rules. Because of the rapid changes to terms, acronyms and licensing programs, this blog post may be outdated by the time you reach it. If you have Microsoft licensing questions, you are always welcome to contact a member of the Avantiico licensing team to get clarification or a second opinion. 

How Microsoft Licenses Products

In order to use a Microsoft product, you must first acquire a Microsoft license or subscription through a Microsoft Partner or Microsoft directly. In exchange, you receive a subscription specific to the Microsoft software you want to deploy. The real benefit is that you only pay for the specific Microsoft software you use and for a specified period of time. Depending on the number of Microsoft licenses you need, Microsoft offers multiple licensing programs. 


The licensing programs include the Microsoft Cloud Solution Provider agreement(Microsoft CSP) or the Microsoft Enterprise Agreement (Microsoft EA). As a long-term Microsoft Solution Partner with multiple Microsoft Partner designations, Avantiico teams help clients get the best pricing and product mix on Microsoft EA agreements as well as Microsoft CSP Agreements. 


Picking the best Microsoft licensing agreement for your business depends on a host of factors. When you compare a Microsoft EA agreement against a Microsoft CSP agreement here are some of the factors your licensing advisor should cover: how long the agreement runs, the number of users your organization has across a number of Microsoft products, your growth plans and forecasted user needs one to three years into the future, purchasing commitments as well as your company’s ability to adjust your licensing with stepping user counts up and down. Microsoft EA agreements include a concept of True-up within the typical 3-year EA agreement which is important to manage as well. 


For all these reasons it is important to evaluate and compare Microsoft CSP agreements against Microsoft EA agreements   

Microsoft Licensing Pricing and Subscription Programs

The most common Microsoft licensing programs provided by Microsoft partners are the Microsoft CSP program and the Microsoft EA program. As a Microsoft Solutions Partner and highest ranked Microsoft Inner Circle Partner, Avantiico offers both programs to our customers.

The Microsoft licensing agreements are designed so that your organization can pick the best offers for purchasing Microsoft subscriptions. Most companies need licenses for their Outlook, CRM and productivity suite (Word, Excel, etc.) usage. If you are an enterprise business that would typically fall under Office 365 ProPlus, Office 365 E1, Office 365 E3, Office 365 E5 – you can learn more here.

Other commonly used Microsoft products by enterprise companies are Dynamics 365 for Finance and Supply Chain Management, Azure etc. All license subscriptions can be purchased through either a Microsoft EA or Microsoft CSP agreements. In Volume Licensing, Office 365, Dynamics 365 and Azure is available through:

  • Enterprise Agreement (EA)
  • Enterprise Agreement Subscription (EAS)
  • Server and Cloud Enrollment (SCE)
  • Enrollment for Education Solutions (under the Campus and School Agreement) (EES)

Additional channels include: 

  • Microsoft Dynamics Online Government (except Finance, Supply Chain Management, Commerce, Human Resources, and Dynamics 365 Operations – Activity)
  • Microsoft Products and Services Agreement (MPSA). More information on MPSA is available here.
  • Microsoft Online Subscription Program (Web Direct/MOSP) (except Finance, Supply Chain Management, Commerce, Human Resources, and Dynamics 365 Operations – Activity)

The Microsoft licensing options summary above should give you an idea of just how complex navigating the Microsoft licensing options can be. As your organization evaluates Microsoft licensing options for example as part of your Microsoft EA renewal, it is therefore a good idea to build a comparison between CSP pricing and EA pricing and pros and cons for CSP and EA agreements for your business.  


For most organizations, the required Microsoft licenses and Microsoft subscriptions are offered and discounted with the best incentives under the Avantiico Microsoft CSP program and the Avantiico Microsoft EA program. 

Microsoft Enterprise Agreements (EA)

Microsoft Enterprise Agreements (EA) are negotiated directly with Microsoft, and most commonly, with a Microsoft Partner as well. For Microsoft EA agreements, Avantiico cloud architects along with the Avantiico EA licensing team will ensure you have the right licensing, the correct user count and user types aligned with intended system usage, as well as the right Dynamics D365 environment design blueprints. For existing EA agreements coming up for renewal licensing savings can often be made by conducting a granular user security audit of your current Dynamics 365 users or Microsoft E1, E3 or E5 users as an example. Avantiico offers a granular user access and security audit which provides licensing as well as security and compliance insights relevant to SOX audits or other audit types. This is a great foundation for your licensing agreement renewal. 

When negotiating an EA agreement and licensing cost for many Microsoft subscription types, it is worth nothing that you are committing to a 3-year or 5-year licensing agreement. There is a *500 minimum user/device requirement.


Tip: When buying through your Microsoft subscription, the manually added system admin has to activate the new subscriptions through the Microsoft Volume Licensing Portal.

Microsoft Licensing Service Portal showcased in Avantiico's microsoft dynamics 365 licensing guide.

Indirect Cloud Solution Provider (Indirect CSP)

Your company may have started your Microsoft cloud exploration journey with one subscription and for that, you may work with a so-called Indirect CSP partner. In this case, you are working with a Microsoft Partner who buys your licenses through a large Microsoft CSP Partner (acting as distributor). 


Typically, indirect CSP partners do not have to offer comprehensive 24/7 support and won’t have the full set of certified and experienced support resources compared to working with a full-service Microsoft CSP Partner.


Tip: If you’re new to Microsoft licensing in your role and not sure about your Microsoft Partner agreements or licensing, the Avantiico Licensing team can help your team get an overview of your licensing obligations. Request a complimentary license call with a Microsoft product licensing specialist from Avantiico to get an overview of your licensing.  

Cloud Solution Provider (Direct CSP)

Direct Microsoft CSP Partners are required to maintain many Microsoft certifications and provide comprehensive and guaranteed Microsoft support services. As a Direct Microsoft CSP partner, Avantiico provides Microsoft Dynamics licensing optimization services to help your team manage and purchase Microsoft Dynamics D365 Finance & Operations, Office 365, Dynamics 365 Customer Engagement (CE) and Microsoft Azure licenses and subscriptions. As a Direct Cloud Solution Microsoft Partner, Avantiico assists your team directly and provides Microsoft support to your business. 

Buying Microsoft licenses through CSP

Avantiico Support offers customers 24/7/365 end-to-end Microsoft solution help desk services and Microsoft Support across Microsoft platforms. To do so, Avantiico offer dedicated Microsoft solution teams to help you with everything from bug fixes, code development, code review, and testing, all the way to data migrations and cloud infrastructure assessments. 

Working with a Direct CSP Partner also means that you will get Microsoft support by and get billed directly from the Direct CSP Partner, rather than having multiple people delivering services. Microsoft calls this their “One Partner” strategy. 

CSP VS Indirect CSP Table

Need Help With a Question?

Need to calculate or purchase Microsoft subscriptions? Talk to an experienced Avantiico Cloud Architect.

Microsoft On-Premise Licenses Vs. Cloud Based Licenses (SKUs)

If your organization is still running on a version of Microsoft Dynamics AX, you can still purchase additional Microsoft AX licenses as long as you have an active Microsoft AX enhancement plan. Avantiico Cloud Architects can also help your team benefit from dedicated Microsoft Cloud Transition offers for Microsoft Dynamics D365 Finance & Operations. 

Keep in mind that Microsoft moves and will continue to move more and more products to the Microsoft Cloud. Products have set end-of-support dates that eventually force you to a new cloud-based license. For an overview of the Microsoft Dynamics Support and end of Dynamics AX support please refer to 

If you have decided that you no longer want to maintain old servers or if it is a hassle to maintain your customized infrastructure, you can benefit from purchasing the new Microsoft cloud-based license. If you have an active AX Enhancement Plan, you can take advantage of different migration offers. Contact us to learn more about On-Premise to Cloud migration services

If your business chooses to transition into Microsoft’s cloud-based licenses, you gain automatic access to the biggest cloud computing service run on a worldwide network of secure data centers, which Microsoft upgrades to the latest generation to ensure performance, no latency and high efficiency, no matter your geographic location. From a productivity standpoint, adopting cloud computing removes the need for software patching, hardware setup, and onsite servers or data centers. Microsoft cloud computing takes care of your data backup and disaster recovery.

If your company is currently using products like Office 365, Azure, Dynamics AX4.0, AX2009 or AX2012, Dynamics 365, Customer Engagement (CRM), it might be time to get a detailed review.

Microsoft Dynamics 365 apps and subscriptions?

Microsoft Dynamics 365 CRM and ERP apps are the next generation of intelligent business applications that enable organizations to grow, evolve, and transform. Microsoft Dynamics 365 licensing subscriptions provide access to many different applications with a deep subset of functionalities. The Dynamics 365 applications continue to evolve, but currently include:

  • 365 Sales
  • 365 Customer Service
  • 365 Field Service
  • 365 Human Resources
  • 365 Finance
  • 365 Supply Chain Management
  • 365 Commerce
  • 365 Project Service Automation
  • 365 Marketing
  • Artificial Intelligence (AI)
  • Mixed Reality
  • Business Central

These applications unify CRM and ERP capabilities by delivering new purpose-built applications that work seamlessly together to help manage specific business functions. 

Dyanmics 365 Demo for your business?

If you're interested in a demo of Dynamics 365 applications, please contact us.

How Is Microsoft Dynamics 365 Licensed?

There are hundreds of Microsoft licensing SKU’s, so we’ll be focusing on the most popular applications seen from an enterprise licensing perspective:

Dynamics 365 subscriptions:

  • 365 Finance
  • 365 Supply Chain Management
  • 365 Customer Engagement


  • Virtual Machines
  • Environments
  • Azure Database

Microsoft 365

  • Office 365

Dynamics 365 Named User Licensing

Dynamics 365 simplifies the licensing of business applications. The primary licensing method is the named user subscription. The Dynamics 365 user subscriptions classify users into two types. One user type is a “full user” and the other is a “light user.”

Full users are the users whose work requires use of the feature-rich business app’s functionality. Examples of full users are salespeople, customer service representatives, finance employees, controllers, and supply chain managers. Such users have also been referred to in the past as “pro users” or “power users.” In the Dynamics 365 license model, full users are licensed with a Dynamics 365 application subscription. If you are on an older licensing model, Avantiico will help you make a smooth transition into the new licensing model.

Often, many users in an enterprise organization are considered light users. Light users may consume data or reports from line-of-business systems and complete light tasks like time/expense entry and human resources record updates. In the Dynamics 365 model, light users are licensed with the Dynamics 365 for Team Members subscription. This allows for enterprises to save on subscription costs and pay only for what users use. 

To get an understanding of the minimum required licenses needed, please see our previous blog post ‘October 2019 Dynamics 365 Licensing Changes‘. You can also download the latest February 2020 licensing guide here. 

Get A Complimentary Licensing Review

For more information about Microsoft licensing, talk to an experienced Avantiico Cloud Arhictect.

What Is Microsoft Azure?

Microsoft Azure is an ever-expanding set of cloud services to help your organization meet your business challenges. Azure allows you to build, manage, and deploy applications on a massive and secure global network using your favorite tools and frameworks.

How To Start A Microsoft Azure Subscription?

Microsoft Azure is a pay-as-you-go concept. In other words you only pay for what you consume. On Microsoft’s website, you can read that “AWS is 5 times more expensive than Azure for Windows and SQL Server”.

Depending on your organizational situation you can choose to:

  • Purchase Azure directly from Microsoft
  • Use Azure as part of a managed service from a Microsoft partner: Microsoft Cloud Solution Provider (CSP) partners such as Avantiico offer different cloud solutions.

Learn more about Azure pricing here. 

How Secure Is Microsoft Azure?

Security and privacy are built directly into the Azure platform. Microsoft is committed to the highest levels of trust, transparency, standards conformance, and regulatory compliance with the most comprehensive set of compliance offerings of any cloud service provider. To learn more about Azure security, please click here

Common Licensing & Agreement Questions


Question: How much does an Enterprise Agreement cost?

Answer: It depends on multiple factors, including the volume of licenses purchased, Azure consumption, etc.


Question: How long does it take to get a Global Enterprise Agreement?

Answer: If you reach out to us 60-90 days before you have to renew your EA/CSP Agreement, we would have an appropriate amount of time to work on new 3-5 year prices.


Question: How does Microsoft Enterprise True-up work?

Answer: When you have a EA Agreement, Microsoft asks you to align your total number of licenses you have added in the previous 12 months. You can also call it an inventory count – where you count all of your users and their respective devices that have been added. You can download the Trup-up guide here


Question: How does a EA Agreement or CPS Agreement benefit the worker I choose to work with?

Answer: Partners that meet all of the EA partner requirements can get an upfront quickback for the licenses purchased. With CSP Agreements, partners receive recurrent revenue. 


Question: What are the discount levels on Enterprise Agreements?

Answer: Discount levels follow a ladder model that is based on the amount of users/devices included in the plan.


Question: Are there different payment options on EA Agreements?

Answer: There are flexible payment options including ramped payments, equal monthly payments, quarterly payments and deferred payments. 

Get the help your organization needs with Microsoft licensing and pricing

Avantiico is a full-service Microsoft Dynamics Solutions Partner delivering the full suite of consulting expertise for the modern enterprise using Microsoft Azure, Office 365 and Dynamics 365. With consulting teams across North America and Europe we help clients with the full project lifecycle from selecting, designing, building and supporting future ready Microsoft Dynamics 365 solutions across 9 times zones.


Based on experience from some of the largest Microsoft EA agreements for Dynamics 365 in the US and large Microsoft CSP clients, your team gets the insights and expertise to compare agreements and avoid overpaying for Microsoft Licensing.  


We assist organizations like yours with reviewing and consolidating your Microsoft licensing and subscription costs to deliver cost reductions where possible. Get assistance with your renewal and Microsoft licensing purchase before you commit. Our Microsoft Enterprise Licensing Specialists have been working with Microsoft products for two decades which ensures you get the maximum subscription benefits, the best Microsoft subscription offers and pricing available. The Avantiico licensing team helps you get all Microsoft Subscriptions activated and utilized through your Microsoft contract.

Get A Complimentary Licensing Review

For more information about ways to purchase Microsoft licenses, talk to Avantiico

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