With Dynamics 365 Project Operations in GA, Microsoft prepares transition plan for legacy users

October 7 2020

With the new Dynamics 365 Project Operations offering, which became generally available on October 1, Microsoft promises to bring together the existing project-based capabilities of multiple Dynamics 365 products, tied in with Microsoft 365 services like Teams and Project for the web, and with the opportunities for partners to add their own industry-focused IP around it. But with the new solution's release, existing customers of earlier project management solutions will need to understand their existing licensing dates and prepare for a transition to a new product and the new licensing requirements.

Microsoft has designed Project Operations as a solution that can be used either in a standalone scenario or integrated with D365 Finance for invoicing, contracts, milestones, and actuals for time and materials projects. The base capabilities span deal management, project planning, resource management, time and expense, project costing, invoicing, and financials. Those broad capabilities reflect Microsoft's years-long effort to unify project-related capabilities in its CRM and ERP-focused applications, from Dynamics 365 Project Service Automation, which had its own scheduling engine, to the project management-related features of D365 Finance and Operations, which did not have a standard integration with PSA. 

The licensing of Project Operations will fit into the so-called "Dynamics 365 SKU placemat", the flattened list of applications that allows customer to pick and choose license combinations as they see fit. Project Operations joins the portfolio at a price of USD$120 per user per month as a base application and $30 as an attach application on top of another base app. 

The introduction of Project Operations also represents the beginning of an important transition for existing customers of products that will lose capabilities or that will be retired in the future.

The GA launch coincides with the removal of the older D365 Project Service Automation (PSA) from the product lineup. Current PSA customer can continue using it until as late as either October 1, 2022 (for CSP and Web Direct customers) or 2024 (for customers with an enterprise agreement). If a contract ends earlier than those respective dates, then that contract end would define the end of use.  

Project Operations will also impact users of D365 Finance using the Project Management & Accounting (PMA) and Expense tools, as well as those using the more limited Dynamics 365 Operations Activity license. Similar to PSA, PMA users will be supported until 2024 or when their contracts end (whichever comes first). Until then, Microsoft will provide support and offer a migration path to Project Operations.  

A Microsoft spokesperson explained to MSDW that as part of the transition to Project Operations for eligible users of the impacted products, Microsoft will add access to Project Operations seats at no cost in addition to their currently licensed products. 

"Eligible user licenses (active PSA, PMA and Expense management customers) will automatically be upgraded to Project Operations at no additional cost and with no required action starting on April 1, 2021," the spokesperson said. That offer extends until each customer's paid license period ends. 

The April 2021 start date has been selected at least in part because some key replacement  features from PSA and PMA are still to be delivered in Project Operations, says Andrew Snodgrass, research vice president at Directions on Microsoft. 

"The reason PMA customers aren't being migrated to Project Operations until April 1, 2021 is because PMA hasn't actually moved to Project Operations yet. It's still only accessible from the Finance application," he said in an email interview. "And the reason PSA customers aren't migrated until April 1, 2021 is because the inventory and product management features, critical for manufacturing, won't be accessible in PO until then either."

Microsoft's spokesperson also confirmed that there are some price increases that some customer should be aware of when their current licensing agreements and any available renewals end. Users on the D365 Operations Activity user license will be moving from the $50 Activity license to the $120 Project Operations base user license to gain the same project-based capabilities. And D365 Finance users losing PMA capabilities will have to add the Project Operations "attach" license, which will be required on top of their existing D365 Finance base license of $180.

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About Jason Gumpert

As the editor of MSDynamicsWorld.com, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at jgumpert@msdynamicsworld.com.

Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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