4 min read

Understanding Microsoft Dynamics 365 Licensing

Understanding Microsoft Dynamics 365 Licensing
Understanding Microsoft Dynamics 365 Licensing

Puzzles. They can be a fun and healthy challenge – unless that puzzle surfaces when your Enterprise or SMB company’s expensive licensing agreements and bottom line are at stake.

Good luck finding a volunteer willing to take on that challenge.

Jeff was that reluctant volunteer at the Business Process Outsourcing company, where he was an operations manager. The company was considering investing in Microsoft Dynamics 365 but wanted to ensure it would be the best Microsoft licensing option for them.

Jeff knew it would be a complex undertaking–and his early research confirmed it.

As he began digging into Microsoft's various new and “comprehensive” licensing agreements, the staggering array of options to consider was overwhelming, to say the least.

In addition, accounting for the company’s unique and changing business needs added another layer of complexity, not to mention grasping compliance issues and the periodic updates that would be needed.

So, as with any puzzle, Jeff took a strategic approach involving multiple considerations and review steps. The first step was research.


Gathering the Facts

Gathering the following information related to the company’s needs was Jeff’s first priority:

  • The number of users - this impacts licensing costs and options for scaling
  • Specific software requirements - determining the needs for their operations while avoiding unnecessary features that can inflate costs
  • Understanding licensing with cloud services and balancing on-premise vs. cloud solutions


Microsoft’s Licensing Models

In the intricate world of Microsoft licensing, the number of users is the foundational factor shaping costs and scalability options, and Jeff quickly realized that aligning the licensing structure with the organization's unique needs was critical.

Identifying the software requirements for operations became the primary step, and Jeff was determined to avoid unnecessary features that could potentially inflate costs.

Cloud services introduced an additional layer of complexity. Understanding how licensing works in the cloud and finding the right balance between on-premise and cloud solutions was essential for the company to achieve operational efficiency.

Jeff's research underscored the importance of staying informed about updates, as changes could impact licensing and potentially lead to compliance nightmares.


Balancing Tools and Budget

Microsoft offers multiple licensing options, each specific to different operational needs.

Wading through the various models and determining the best fit for the company was a test of Jeff’s perseverance.

He spent hours poring over the per-user, per-device, and subscription-based models.

In addition, there was the issue of software updates and how they affect licensing, and the importance of staying informed about changes to avoid compliance nightmares.

And if that wasn’t enough, over-licensing - acquiring more licenses than necessary for the organization – was yet another risk to consider.

Over-licensing imparts not only the financial implications of paying for licenses you’re not using but can also contribute to scaling difficulties, non-compliance issues, audit vulnerability, and user confusion due to an unnecessarily complex system.

To shed light on these challenges, let’s imagine the scenario of trying to decide between Dynamics 365 and Microsoft Power BI licenses based on employee needs:

Many employees will primarily need analytical and reporting capabilities (covered by Power BI), while others will need more robust features, such as CRM. In addition, purchasing licenses with features that go unused can result in unintentional non-compliance and financial penalties or legal consequences stemming from periodic license audits by Microsoft.


TrellisPoint to the Rescue

Jeff felt like he was drowning in a sea of options. He felt no closer to a recommendation than when he started when a colleague mentioned TrellisPoint - a Microsoft solutions partner - as a possible lifeline to help sort things out.

After learning more, Jeff gained approval to work with TrellisPoint's advisors on a plan to determine the best route for the company.

TrellisPoint’s business is based on knowing all the ins and outs of the Microsoft space and the above complexities.

They analyzed the company’s needs and resources and swiftly came up with recommendations and a plan (one that was much different than what Jeff was considering) that would cost them less, provide employees access to the tools they need, and lower their risk of running into compliance issues.

What Jeff and his leadership learned as a result of their partnership with TrellisPoint is that it’s easy to overlook the long-term benefits of strategic licensing decisions.

Immediate costs and needs often push those future advantages into the shadows, only to have them reappear after you’ve made the wrong decision (and, in this case, after Jeff put in significant hours on the project himself).

Knowing when to “do it yourself” for simple projects and when to leverage the expertise of an experienced Microsoft partner like TrellisPoint, who understands the intricacies of the different licenses, will save you time and ensure you make the right decisions.

To learn more about how TrellisPoint can provide solutions to meet your company’s unique needs and align with your business goals faster and more efficiently, contact us.

Microsoft Dynamics 365 Licensing FAQ

  1. What are the specific criteria or thresholds for choosing between per-user and per-device licensing options in various business scenarios?

    Criteria for Choosing Between Per-User and Per-Device Licensing: The decision between per-user and per-device licensing typically hinges on how the business operates and the way its employees use Microsoft Dynamics 365. Per-user licensing is often the best fit for organizations where employees need access to the system from multiple devices, providing flexibility and personalization for each user. On the other hand, per-device licensing might be more cost-effective for environments where multiple employees share the same device across different shifts, such as in manufacturing facilities or retail locations. The choice depends on the ratio of users to devices and the pattern of system usage across the organization.
  2. How does Microsoft Dynamics 365 licensing accommodate seasonal businesses or organizations with fluctuating user counts throughout the year?

    Accommodating Seasonal Businesses or Fluctuating User Counts: Microsoft Dynamics 365 licensing is designed to be flexible to accommodate the varying needs of businesses, including those with seasonal peaks or fluctuating user counts. Microsoft offers the ability to adjust the number of licenses on a monthly basis, allowing businesses to scale up or down as needed. This flexibility is crucial for seasonal businesses that see a significant variation in workload and employee count at different times of the year, ensuring they only pay for the licenses they need, when they need them.
  3. Can businesses transition between different Microsoft Dynamics 365 licensing models as their needs evolve, and if so, what does that process entail?

    Transitioning Between Licensing Models: Microsoft Dynamics 365 allows businesses to transition between different licensing models as their needs evolve. The transition might involve re-assessing the organization's usage patterns, financial considerations, and future growth projections to select a more appropriate licensing model. This flexibility ensures that businesses can adapt their Dynamics 365 licensing to reflect changes in their operational needs and strategic goals, although it's important to note that such transitions should be planned carefully to minimize disruption and ensure continuity of service.
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