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The licensing structure from Microsoft for Dynamics 365 paves the way for greater flexibility to suit every organization’s budget and business needs.

Companies can choose licensing based on apps, licensing models, and user access types. What apps does the team need? Which licensing model best suits them – enterprise or business edition? What types of access do team members need – full user or light user? Microsoft Dynamics 365 licensing for Finance and Operations is modeled to simplify business processes, improving collaboration and productivity in your business at cost-effective pricing.

How to Purchase

Companies can obtain D365 licensing either through a subscription model or a purchase model under two types of agreements:

Enterprise Agreement (EA): For companies with 500 seats or more, this licensing model is preferred. Available for both on-premises and cloud with dual user rights, it gives unlimited access to all of the Microsoft products and services. Generally, EA comes with a 3-year commitment with a yearly payment option.

Cloud Solution Provider (CSP): This licensing model is ideal for small and mid-sized businesses. This pay-as-you-use model is subscription based, with fees paid monthly. Companies can obtain this licensing under agreement with an authorized Microsoft cloud solution provider.

User License Types

While under Dynamics AX, user license types are mapped as Enterprise, Functional, Task, and Self-serve. D365 user license types are as listed below:

Operations (Full Use): This license includes full read, edit, and approval access across the entire ERP solution. Ideal for those who work extensively in Dynamics 365. Generally roles such as purchase managers, warehouse managers, customer service representatives, supply chain managers, sales managers etc. fall under this category.

Activity (Medium Use): This license includes rights to:

  • Approve all activity related transactions
  • Create or edit the items related to: warehousing, receiving, shipping, production orders, purchase orders, sales orders, project activities, vendor maintenance, and all budgets.
  • Operate a POS device, store manager device, shop floor device, or warehouse device. Roles like buying agent, receiving clerk, sales clerk etc. come under this activity based licensing.

Team Member (Light Use): This license is an ideal choice for those users who perform minor tasks, which includes read access across any and all Dynamics 365 apps as well as the rights to:

  • Record any type of time or expenses
  • Approval of time, expenses, and invoices
  • Manage personal information
  • Manage direct employee activities in human resources
  • Create requisitions
  • Create or edit the items related to quality control, service orders, and department level budgets. Roles like time registration clerk, quality control clerk, project timesheet user etc. are the ideal users of this license type.

Device (Limited Use): This license includes full use, limited to only the licensed device, allowing for multiple user access.

Dynamics 365 Licensing Plans and Pricing

Dynamics 365 has three licensing plans: Enterprise Edition, Unified Operations, and Customer Engagement. Enterprise Edition customers enjoy tiered pricing with discounted prices based on the number of seats being purchased, which means larger Dynamics 365 deployments are qualified for a lower price per user. However, the Unified Operations Plan and Customer Engagement Plan do not come under the purview of tiered pricing. You can access the pricing calculator here.

Transitioning from on-premise to the cloud is a critical task for organizations. It needs to be aligned with the cloud transformation strategy and the overall technology strategy of the organization. A trusted Microsoft Cloud Solution Provider can maximize the benefits of moving you to the cloud and assist you with selecting the best-suited licensing model for your current business needs. 

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