Dynamics 365 Licensing Update

Microsoft is making its first major update to Dynamics 365 license pricing in nearly five years, set to take effect on October 1, 2024. These changes could impact your business’s budget and planning, so it’s important to understand what’s coming and how to prepare. In this blog, we’ll break down the new pricing structure, discuss its implications, and offer strategies to help you make the most of your investment in Dynamics 365. Whether you're a current user or considering a switch to Dynamics 365, this guide will help you navigate the upcoming changes with confidence.

1. Microsoft is updating its license pricing

This is the first time Microsoft has changed pricing for business applications in almost five years. Hopefully, it will be another five before they change again.

Starting October 1, the following products will have their prices updated according to the table below:

Product	Price before October 1,   2024	Price as of October 1, 2024
Microsoft Dynamics 365 Sales   Enterprise	$95	$105
Microsoft Dynamics 365 Sales   Device	$145	$160
Microsoft Dynamics 365 Sales   Premium	$135	$150
Microsoft Microsoft   Relationship Sales	$162	$177
Microsoft Dynamics 365   Customer Service Enterprise	$95	$105
Microsoft Dynamics 365   Customer Service Device	$145	$160
Microsoft Dynamics 365 Field   Service	$95	$105
Microsoft Dynamics 365 Field   Service Device	$145	$160
Microsoft Dynamics 365   Finance	$180	$210
Microsoft Dynamics 365 Supply   Chain Management	$180	$210
Microsoft Dynamics 365   Commerce	$180	$210
Microsoft Dynamics 365 Human   Resources	$120	$135
Microsoft Dynamics 365   Project Operations	$120	$135
Microsoft Dynamics 365   Operations – Device	$75	$85

 

2. The way you buy additional D365 environments is changing

The way you buy additional environments is changing. Today you can purchase additional environments through two different mechanisms. First, you can spin up a cloud-hosted environment in your Azure tenant. This is a pay-as-you-go service and can be turned on and off. These environments are typically for developers and are not meant to support multiple users in the system. The second is Tier 2-5 environments. You are entitled to one Tier 2 environment when you make a minimum qualifying base license purchase. We always recommend to our customers that they buy one additional Tier 2 environment during the implementation. The Tier 2-5 environments have a SKU and are purchased like a traditional license with monthly/annual commitments. The Tier 2-5 environments increase in price and performance, respectively. Tier 3 and up environments should be reserved for heavy performance testing.

Going forward, you will be able to spin up as many environments as you would like within your tenant. You will simply be required to pay for the underlying storage and compute to support them. The pricing for these items has not yet been released.

 

How to plan for these Dynamics 365 license updates

If you are an existing customer, check when your current licenses are set to renew. If your renewal is before October 1, you will be able to lock yourself in at the current lower price for longer. Please reach out to us for coaching on how to best manage this for your situation.

If you are shopping for D365 there has never been a better time to buy your licenses. Please reach out to us with any questions to begin your transformation into the cloud.

Even though prices are set to increase Microsoft’s licensing is still one of the most cost-effective in the market for the depth of capability that Dynamics 365 offers.