Licensing Explained

Microsoft Dynamics 365 Licensing Explained

Licensing has always caused a lot of issues across ERP products, trying to understand what role each person will undertake to ensure the right license is purchased. Even though users don’t always exist in traditional departmental structures anymore, or do a range of jobs across different processes, licensing by ERP applications has stayed in the same constrained parameters as it always has. So what’s different with 365?

Microsoft Dynamics 365 is Microsoft’s new approach to end-to-end business intelligence. It is designed to improve productivity and collaboration in your business, Dynamics 365 is a cloud platform that will eventually provide a fully integrated solution across all of your data from business apps with Office 365, Power BI, Azure, and Cortana Intelligence.

No matter what the role is, everyone needs some access to data that is held in business apps in today’s world. In the license by application model, only the lucky few that you’ve paid for have access to this data. When the time comes to find something that doesn’t fall under your department, the reality is that you have to ring up a person with access and waste their time trying to find that information.

Pay For What You Need With Dynamics 365

The new licensing model in Dynamics 365 is inclusive, where roles are built around business outcomes. Everybody gets access to the functionality they need across Apps, Plans, and Team Members – the building blocks to the licensing structure. These three building blocks essentially offer you a spectrum of licenses to pick and choose from for one or many products, for any type of user, and for businesses of any size.

Dynamics 365 Licensing Explaining

The Products

Firstly let’s start with the Product. The Enterprise Edition is a mix of the previously named Dynamics CRM and Dynamics AX, the ERP product. There is a smaller ERP version, called Business Edition which is based around the previously known NAV product. Dynamics 365 Business Edition is currently only available for Financials.

Having selected the product type, Enterprise or Business on the ERP side you can purchase the parts of CRM you need, from nothing to everything, and then the type of user you’ll need, per user for full users and for Team Members.

So basically Microsoft have pulled together these three products. For the medium, larger and enterprise businesses you’ll need aspects of the CRM plus probably AX. These are now sold as Apps where the previously known Dynamics AX is now known as Dynamics 365 for Operations and Dynamics NAV is now365 Financials. The confusion here is that Operations includes its own financials so the Financials element is only there for smaller organisations with more limited functional requirements, around the operational aspects.

CRM is split into a number of smaller elements allowing a chance to pick the elements that you need for your business.

Here is an overview of what these new terms (Apps, Plans, Team Members and Devices) mean:


Licensing by application is still relevant and available. With Dynamics 365, you have the option to buy applications individually or buy them through a Plan. The core applications available in Dynamics 365 are:


    • Operations – previously known as Dynamics AX7


    • Financials – previously known as Dynamics NAV

The CRM Apps:

    • Sales
    • Field Service
    • Customer Service
    • Project Service Automation

Additional CRM Apps due for release in 2017:

  • Customer Insight
  • Marketing

Power BI and Cortana Intelligence will be embedded in all apps. They will also come with two new extensibility apps, PowerApps and Flow, which allows you to pull data from any app and data source and build web apps and workflows based on all those data sources. You can buy Dynamics 365 apps on a standalone basis and add to them easily through Microsoft AppSource as you grow.


Licensing by Plan is a package of Apps for companies with people who need to access multiple Apps. This option is more affordable when you need a solution that caters to Joe who does Sales and a bit of Marketing and Mary who does Operations and Finance. Dynamics 365 takes these normal roles and ads value by giving these employees the flexibility they need to work in more than one app. By leveraging the integration across the Dynamics 365 platform, you are enabling your employees with more information to do their jobs better. You also have the ability to build whatever customised role within the span of the use rights in the plan. If you have a user who leaves, you can easily adjust what an employee uses or assign to other employees over time.
Here are the Plans available in the Dynamics 365 Enterprise Edition:

Plan 1 – this is effectively the previous Dynamics CRM – all the Apps together give you the original product.

  • Dynamics 365 for Sales
  • Dynamics 365 for Field Service
  • Dynamics 365 for Customer Service
  • Dynamics 365 for Project Service Automation

As shown below there are two Apps still to be released.

Plan 2 – This is the previous CRM now adding in ERP with Dynamics AX – covering everything from Finance to Supply Chain to Production to Warehouse Management to Retail to HRM etc etc. This list goes on…

Enterprise users will have access to the Plans they buy for. Effectively there are just two individual users now, Full Enterprise and Team members

Team Members

Roles can be much more productive and effective when they have the opportunity to range across all the business apps deployed within the client. A Team Member license in Dynamics 365 gives read rights to all other apps. If you cover a person with this license, they can review data from all Dynamics 365 applications. Why is this such an exciting new offer? Because it means that there are no barriers for allowing your employees to consume information anymore.

One Team Member license instantly makes use rights and knowledge sharing accessible to all employees – which also puts an end to double licensing. You do not need to buy a separate license for someone that wants to read data in Dynamics AX and in Dynamics CRM. Team Member licenses are included in all Apps and Plans.

If you buy Dynamics 365 Enterprise Edition for Team Members, you get this:

  • One SKU that covers all light use scenarios and knowledge sharing use rights
  • Limited rights to power apps and flow so you’re plugged into the platform
  • A rich feature set in addition to collaboration tools
  • Ability to access time and attendance functionality, holiday booking and other HRM functionality within the Operations App
  • Lower TCO! i.e. buy more seats, pay less

Designed for use with the Dynamics 365 for Operations App, device license multiple users can access through a device to operate a point of sale device, shop floor device, warehouse device or store manager device.

“Point of Sale Device” means one device located in the Commerce location, used by any individual, for the purpose of completing customer facing sales of goods or services transactions.

“Shop Floor Device” means one device dedicated to performing manufacturing shop-floor functions where these are things like; clock-in and clock-out, starting and finishing production jobs (including project activities carried out on the shop floor), reporting progress, materials consumption and completion, viewing documents and instructions related to production jobs, and viewing worker holiday balances.

“Warehouse Device” means one device dedicated to Performing Warehousing Functions, which means receiving, putting-away, doing internal stock transfers, picking, packing, capturing product attributes, and shipping goods plus performing inventory count checks in the context of a warehouse management system and posting output and materials consumption against production orders when captured as transfers of raw materials and finished goods between a warehouse and a production line.

Microsoft Dynamics 365 - Business Apps Licensing Explained

Choose Your License Based on User Type

In every business you have a mix of highly specialized employees and general employees. Because of this, Microsoft has segmented its licensing based on two broad categories of users: Full Users and Team Members with the Operations App including the use of Devices.

The fully inclusive licensing model in Dynamics 365 designed to support every employee. Every company has a mix of generalists and specialists. The licensing solution for Team Members encourages operational transparency, granting every employee access to the read rights to the business applications deployed within the client. Licensing by application is still a requirement for full users so for CRM you can still simply buy the Sales app and get the Sales app. However whilst this works for the CRM aspects the ERP aspects all come under the one APP and so any operational process will generally require one of three licenses, Full, Device or Team Member. But, certainly with CRM, the key component here is the ability to mix and match with Licensing by Plans, and that’s where we think Dynamics 365 really stands out. You can now buy any combination of licenses that suit your specific needs which is something we have never seen before!

Get in touch today to find out about Dynamics 365 Licensing and get a quick pricing: