Microsoft Dynamics 365 Licensing and Agreement Overview

Morten Loegstrup

Morten Loegstrup

The Microsoft Dynamics AX/D365 Support Team at Avantiico is focused on solving our client’s problems, from daily issues to large and more complex problems.

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Understand Microsoft Dynamics 365 Licensing, User Pricing and Microsoft Subscriptions

Microsoft offers different licensing and user subscription options for companies like yours across the entire Microsoft Dynamics, Microsoft Dynamics 365,  Microsoft Azure and its Productivity suites.

If you are like most modern enterprise businesses, you already hold and manage 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 Microsoft Dynamics AX or Microsoft CRM.

Note: If you already have Microoft cloud SKU’s (licenses), you can navigate to the Microsoft 365 Admin center and sign in using your Office 365 Global Administrator credentials. From here go to Billing > Products & Services and you will see your Microsoft cloud subscriptions. Under each subscription, you can also see how many subscriptions you have available to you.

Manage existing cloud subscriptions in the Office 365 admin center.

Understanding the different Microsoft license pricing and Dynamics D365 subscription costs options can be extremely challenging for most organizations. New Microsoft products and services are offered every quarter and as a result, Microsoft is frequently changing licensing subscription models to align with new offerings and different product SKU’s. 

Most enterprise businesses have complex Microsoft licensing needs involving everything from a few Azure subscriptions,  to hundreds of Dynamics 365 for Finance or Supply Chain Management licenses to thousands of Office 365 subscriptions including the 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 entire Microsoft Subscription consumption under one agreement. In some cases, customers purchase their licenses from multiple Microsoft Cloud Solution Providers or directly through Microsoft. 

Below you will find a summary of Microsoft’s 2020 licensing policies and terminology to help you navigate your Microsoft licensing and Microsoft subscriptions. 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 any 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 license or subscription through a Microsoft Partner or Microsoft directly. In exchange, you receive a subscription specific to the software you want to deploy for your business. The major 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 and the route you choose to take, Microsoft offers multiple licensing programs. These programs include Microsoft Clould Solution Provider agreements (CSP) or Microsoft Enterprise Agreements (EA), which can be purchased through a Microsoft Partner that meets Microsoft requirements.

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 Gold Microsoft 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 an EA or 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.

For most organizations, the most commonly needed Microsoft licenses and Microsoft subscriptions can be purchased with the best incentives under the Avantiico Microsoft CSP program and the Avantiico Microsoft EA program. 

Microsoft Enterprise Agreements (EA) (Microsoft Volume Licensing)

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.

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

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

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 partners don’t have to offer comprehensive 24/7 support and won’t have the full set of ressources compared to working with a full-service Microsoft CSP Partner.

If you’re not sure about your Microsoft Partner agreements, the Avantiico Licensing team can help.

Direct Cloud Solution Provider (Direct CSP)

By Microsoft standards, direct Microsoft Partners are required to have many certifications and guaranteed services and expertise. As a Direct Microsoft CSP partner, Avantiico provides licensing expertise and 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. 

Avantiico also offers customers 24/7 end-to-end Microsoft solution help desk services. To do so, Avantiico offer dedicated Microsoft solution teams to help you with everything from 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 be billed directly from the Direct CSP Partner, rather than having multiple people delivering services. Microsoft calls this their “One Partner” strategy. 

Direct CSP Indirect
CSP
Enterprise
Agreement
Subscription
Period
Normal subscription period is 12 months. Normal subscription period is 12 months 3 or 5 years
Dynamics 365
license
minimums
See the latest
Microsoft licensing
guide here
See the latest
Microsoft licensing
guide here
*500 users/devices for commercial customers
Learn more here
Azure consumption minimums None None $1000 monthly
Support
Requirements
Talk with your
partner
Talk with your
partner
Negotiated with
Microsoft. Discount
varies customer to
customer.
Payment Monthly-
on what you
consume.
Monthly-
on what you
consume.
Annually upfront-
yearly true-up
Microsoft
Discounts
Talk with your partner Talk with your
partner
Negotiated with
Microsoft. Discount
varies from customer
to customer.

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. 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 https://www.avantiico.com/microsoft-dynamics-ax-support-is-expiring/ 

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 is 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. These applications continue to evolve, but currently include:

  • Sales
  • Customer Service
  • Field Service
  • Human Resources
  • Finance
  • Supply Chain Management
  • Commerce
  • Project Service Automation
  • 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. 

Interested in Seeing A Demo?

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

  • Finance
  • Supply Chain Management
  • Customer Engagement

Azure:

  • 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

1).

Question: How much does an Enterprise Agreement cost?

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

2).

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.

3).

Question: How does Microsoft Enterprise Trup-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

4).

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. 

5).

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.

6).

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. 

Let Us Help Your Organization Face Licensing Challenges

Avantiico is a dedicated full-service Microsoft Dynamics Gold Partner delivering the full suite of services 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.

We can assist you in reviewing and consolidating your Microsoft licensing and subscription spending or assist you with your Microsoft licensing and subscription purchase. Our Microsoft Enterprise Licensing Specialists have been working with Microsoft products for two decades which ensures you get the maximum subscription savings, the best Microsoft subscription offers available and a team that can help 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, contact an Avantiico Representative.
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