Microsoft Dynamics 365 Licensing and Agreement Overview
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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.
Microsoft Dynamics 365 Licensing and Agreement Overview
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- March 3, 2020
- 10:59 pm
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Understanding Microsoft Dynamics 365 Licensing
Microsoft offers different licensing 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 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 legacy subscriptions for Microsoft Dynamics AX or Microsoft CRM.
Understanding your different Microsoft licensing/subscription options can be extremely challenging. New Microsoft products and services are offered every quarter and as a result, Microsoft is frequently changing subscription models to align with new offerings. Most larger enterprise businesses have complex 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).
Below you will find a summary of Microsoft licensing policies and terminology to help you navigate your Microsoft licensing and Microsoft subscriptions.
Why Microsoft Licenses Their Products
In order to use a Microsoft product, you must first acquire a license through Microsoft. You in turn, receive a subscription to use the software. The major benefit is that you only pay for the software you use. Depending on the number of licenses you need and the route you choose to take, Microsoft offers multiple licensing programs. These programs include Microsoft Enterprise Agreements (EA), which can be purchased through a Microsoft partner that meets Microsoft requirements.
Microsoft Licensing 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 programs are designed so that your organization can pick the best offers for purchasing company 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 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 a vague 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 team will ensure you have the right licensing count, the right user types aligned with system usage, as well as the right environment design blueprints.
When negotiating an EA agreement, it is worth nothing that you are engaging in a 3 or 5 year agreement and there is a *500 minimum user/device requirement.
When buying through your Microsoft subscription, the manually added admin has to activate the new subscriptions through the Microsoft Volume Licensing Portal.
Indirect Cloud Solution Provider (CSP)
If you’re not sure about your Microsoft Partner agreements, our Avantiico licensing specialists can help.
Your company may have started your Microsoft cloud exploration with one subscription and for that, you may work with an Indirect CSP partner. In this case, you would work with a Microsoft partner who buys your licenses through a large CSP reseller or distributor. Typically, indirect partners don’t have to offer comprehensive 24/7 support and won’t care to know enough about your business when compared to working with a full-service Microsoft CSP Partner.
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 CSP partner, Avantiico provides licensing revisions and licensing optimization services to help your team manage and purchase Microsoft Dynamics AX, Office 365, Dynamics 365 ERP, Customer Engagement (CE) and 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 support. To do so, Avantiico has put strong technical teams in place 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.
Get Help With Licensing
Microsoft On-Premise Licenses Vs. Cloud Based Licenses (SKUs)
Even with an On-Premise product, you can still purchase most of your own Microsoft licenses. Keep in mind that Microsoft moves and will continue to move more and more products to the cloud. Products have set end-of-support dates that eventually force you to a new cloud-based license. It is part of Microsoft’s mission, to move their customers to their 99.9% secure cloud.
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.
What is Microsoft Dynamics 365?
Microsoft Dynamics 365 is the next generation of intelligent business applications that enable organizations to grow, evolve, and transform. Microsoft Dynamics 365 consist of 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?
How Is Microsoft Dynamics 365 Licensed?
There are hundreds of Microsoft products SKU’s, so we’ll be focusing on the most popular applications seen from an enterprise perspective:
Dynamics 365:
- Finance
- Supply Chain Management
- Customer Engagement
Azure:
- Virtual Machines
- Environments
- Azure Database
Microsoft 365
- Office 365
Dynamics 365 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
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 Does A Company License Microsoft Azure?
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.
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
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Microsoft Dynamics 365 Licensing and Agreement Overview
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