New pricing and licensing for Microsoft Dynamics 365 Unified Operations apps planned for October 2019
July 18 2019
Diagram presented to partners at Inspire 2019
Microsoft revealed to partners at Inspire 2019 that the Dynamics 365 for Finance and Operations (D365FO) application will be licensed as separate Finance and Supply Chain Management applications starting on October 1, 2019. The move is part of a new approach to licensing the Dynamics 365 enterprise applications – categorized under Customer Engagement and Unified Operations – with the flexibility to assign specific combinations of applications to various users.
The change will introduce new pricing on a per-app basis that still allows for bundling multiple applications from the existing portfolio. Pricing, which was also revealed, this week, will impact customer differently depending on their needs, but Microsoft is advising up to a ten percent price increase on some customers. (A pricing breakdown is included below)
"For about 95 percent of users, you would be looking at a ten percent or less impact. And when you net it out over all the users that a typical customer has, it is going to be a single digit impact," said Ken Tracy of Microsoft in a recorded Inspire presentation. (The recording appears to have been removed from the Inspire site. -Ed.)
Microsoft also revealed how the Dynamics 365 Customer Engagement app licensing will change under the new approach.
The current "plan" offering known as Unified Operations will become four separate applications: Finance, Supply Chain Management (SCM), Talent, and Retail. Until now, Finance and SCM have been combined in the single application D365FO and in Dynamics AX before that. Here is the breakdown of where existing modules of D365FO, Talent, and Retail align with the new licensing.
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New pricing and licensing for Microsoft Dynamics 365 Unified Ope
The last lot of license changes more than doubled the cost.
This seems significantly more than a 10% increase. I don't understand the logic that selling an integrated solution with business processes that cut across functions is sensibly supported by this. From $190 to $360 seems a little more than 10%.
Its not clear what is an attach user -
Task users and activity users - do they work across all apps? - they a re of little use - few jobs could be sensibly done without enterprise - which I assume is what the license compliance gap is reflecting.
What happens to HR, Service module. Public Module?, CallCentre? Cross functional ISV apps ?
How do you do inventory without finance or Projects without SCM?
We were told that telemetry was to be used to enhance the system design to be more efficient not to justify price increases., and a back door to license audits.
I don't have a problem about fair pricing. I do have an issue with trust - customers are still being told they will save money by moving to D365 on the cloud than staying on Ax 2012 - partners see record Microsoft profits reported, yet have rising partner costs and declining margins.
In the real world both customers and partners don't have elastic budgets. Sales cycles and proposal pricing last longer than 3 months often there bid/tender bonds and price guarantees required by rfps. The licensing of Ax 2012 and d365 tied to security considerably complicated the sales cycle - I don't see this making it any easier.
This is not the way . nor the time frame in which to communicate such news.
More D365FO pricing guidance for partners
While I don't dispute your concerns, your understanding of the calculated prices is not correct. Unfortunately, Microsoft appears to have removed the recording of the related presentation from the Inspire site, which contained some pricing examples. But the basic price calculation for Finance (base) + SCM (attach) would be $180 + $30 = $210, which would be right at the existing plan pricing level. Finance + SCM + Retail would be $240. Their point was that the mix of D365FO users would now be using 1, 2, 3, or 4 apps, as needed, and in aggregate the pricing will result in zero to ten percent license increases.
New pricing and licensing for Dynamics 365
The license pricing has been made more complex and expensive, all these decisions should be largely discussed and shared in Partner Community.
A mess awaits us
So, 60 users D365FO, going to 120 UOP plus 580 Team subscriptions. Need to use Retail ops APIs and Retail Promotions Pricing Engine (with basket handling) to serve front end web sites and allow them to query order history. Need to add Prospect to Cash (which MS have built upon D365CE). Add Talent.
If you implement the above, that's 120 Plan subs and 580 team subs.
Unless you can split subscriptions by user profiles (HR staff count as Talent users, Finance as Finance, AR as Prospect to Cash, somehow count Retail Ops API use, etc), then manageable. However, the licenses don't work that way. This looks like a big and very costly mess about to happen...
And what happens to d365 for $210?
You could purchase a single seat but with this change it appears to be gone and now back to minimums of 10 - 20 seats!