Dynamics 365 CE Licensing Guide Changes October 2018

How do you solve a problem like team member?

The hills are alive, with the sound of people downloading the new Microsoft Dynamics 365 Licensing Guide October 2018, just released today! Ok, so apart from me, most people don’t get too excited about software licensing, but there are some fundamental changes coming for Microsoft Dynamics customers, so be aware. You’d better set aside a day or two to fully digest and understand the changes,. If you haven’t got the time to do so, read on for my highlights.

Background first – How did we get here?

Back in the days of Dynamics CRM 4.0, right up until Dynamics 2015, we had a horizontal licensing model. What do I mean by horizontal licensing? Well, users were licensed on generic features included across the entire product. So, you could use Dynamics for Sales, Service, Marketing and not need to buy a specific Client Access Licence (CAL) for each subset of business functionality. Sure, you had to licence servers separately and you could buy either an essential, basic or professional CAL, but for the most part you didn’t need to worry about what end users were actually doing. Most people considered essential CALs for read only or light users, basic CALS were a good fit for the vast majority of users, and Professional CALs were for super-users.

Why mix it up?

Compared to the likes of Salesforce and its other competitors, Microsoft was cheap as chips. SalesForce and others didn’t licence horizontally, they licenced based on modules of rich functionality they provided. Microsoft followed suit with the introduction of new role based licensing in December 2016. This coincided with the release of the newly branded ‘Dynamics 365’. To justify the licensing, Microsoft started investing heavily into the development of the underlying platform, taking a cloud first approach and building what we now know and love as the ‘Power Platform’.

No longer could you buy a CRM essential, basic or professional CAL, you had to buy a Full Plan 1 CAL, or a Sales CAL, or a Service CAL. You had to buy a licence based on the vertical records and business functionality you wanted to use. Right down at the bottom was the equivalent of the old essential CAL – a team member licence.

‘Honor’ Based Licensing

This all seems reasonable, but there was a minor issue that manifested itself shortly after Dynamics 365 was released. Unfortunately, whether by design or not, technical restrictions had not caught up with the licensing. Users with a team member licence quickly found that they were able to access functionality that they may not have been licensed for. The licensing guide also told an ambiguous story around what was allowed and what was not allowed.

The licensing guide had a particular line that caused many people in the community to scratch their heads.

“If the custom entity is based on or replicates the functionality of entities included in Microsoft Dynamics 365, or if the entity links to entities included in Microsoft Dynamics 365, then users accessing the custom entity must also be licensed to access the included or replicated entity. For example, users creating an entity that replicates the cases entity for a ticketing system would still require the user to be licensed for cases.”

Good partners and customers stayed on the right side of the curvy line drawn here.

Undoubtedly, some others may not have tried.

When is a Case not a Case?

When it’s a custom entity of course! This was one of a few scenarios which was not clear until today.  Some time ago, I set upon my own rationale for deciding when a case is not a case. At Summit EMEA 2018 in Dublin, I did finally hear from senior Microsoft architects that they appreciated that there was a fundamental difference between an out of the box case, and, for example something more esoteric such a medical case management system. The new licensing now thankfully reflects this – the same paragraph now reads :

“Custom entities may be based on entities included in Dynamics 365 or created by a customer or partner to represent business entities/items not present or to replicate those already in included in Dynamics 365.”

How does it work now?

In short, the changes are as follows:

  1. The original team member licence has been grandfathered from today, 1st October 2018. Depending on your renewal cycle you might be able to buy and use it for a limited period only.
  2. The new team member licence is limited to create and update access to FIFTEEN custom entities in the context of an app module. This will be much easier to enforce than previous limitations.
  3. The new team member licence cannot create, update or delete accounts. It won’t ever be able to create accounts. Under no circumstances will a team member be able to update account details on any device. It will be impossible to delete accounts if you only have a team member licence. System Users with a team member licence won’t be able to update any account records.
  4. Did I mention team members won’t be able to update the account record? Capiche?

What else is new?

  • Effective October 1, 2018, access to the first included portal for the tenant requires the purchase of a minimum of 10 Full User licenses. This was originally 1, then upped to 5, now 10.
  • There are also two new licences – Sales Professional and Customer Service Professional. I am thinking of these like Team Member Plus – they still have the 15 editable entity limit, but can do straightforward things like create cases and leads. I may be wrong, but price wise, I would expect these to sit somewhere between team member and PowerApps P2 licence. These are priced higher than the PowerApps P2 licence.

What do I do next?

There are still a few moving parts here, and you will want to look at 4 things to get a definitive idea of how it will affect you.

  1. Number of Team Member Licences you currently use and what for.
  2. When does your licensing agreement renew?
  3. Are users accessing functionality they shouldn’t be – directly or indirectly?
  4. How has your solution has been designed and how do users currently use it?

Some customers will find the new team member licence works for their current use case with no changes. Others may need to upgrade to a more expensive Customer Service or Sales professional licence, or a PowerApps P2 licence. Others again may find they need to upgrade to a Customer Engagement licence.

You won’t be able to determine this until you spend some time on the 4 points above – particularly number 3.

If you are solution architect designing a Dynamics 365 solution, you need to understand the current licensing before you start going creating entities and enabling functionality willy-nilly!

I need more guidance

These are my personal thoughts only based on my reading of the guide today. Any time Microsoft makes changes like this, customers will be affected – some positively, some negatively. Help is at hand though – contact a trusted Microsoft Dynamics Partner who can give you some clarity quickly.

In the meantime, if you have any questions or need help, get in touch by Twitter, LinkedIn or leave a comment below.

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