Starting from October 2024, prices will increase by 9-16%.
Strategies and tools to cope with the significant price increase for certain Dynamics 365 applications that will be applied to all customers at the time of renewal starting in October 2024.
For the first time in five years, Microsoft is increasing Dynamics 365 prices: in the post On the vendor's blog dated April 12, the products that, starting from October 1, 2024, will see the new pricing structure applied at the time of renewal are specified.
The vendor justifies the implementation of a new pricing structure by value brought by innovations and features already implemented and can will be implemented, which have led marketers, salespeople, and service agents to Improve the customer experience thanks to AI-based insights, as well as all the operetional part to optimize their processes Thanks to data insights, better visibility of the supply chain, and end-to-end automation of financial processes.
The increases vary from 10,53% for CRM Enterprise licenses (from 95$ to 105$) to 16,67% for ERP Enterprise licenses (from 180$ to 210$), with a $15 increase for all levels for the Microsoft Relationship Sales licenses. The post also mentions that another smaller increase will be introduced one year later, on October 1, 2025.
Let's consider that these are percentage increases for user (or device) per month: For example, for an enterprise with a sales force of 2,000 users who require a Microsoft Dynamics 365 Sales Device license, we are talking about having to sustain additional monthly expense of approximately $ $29,000. At the moment we are talking about "informational" prices, which may then be subject to variations by region, country, or currency.
The prices for Dynamics 365 on-premises products for customer engagement and operations will increase of the same percentage as their respective cloud versions.
While the cloud products not listed in the table will remain unchanged: therefore, small and medium-sized enterprises using solutions such as Dynamics 365 Business Central At the moment, they will not experience significant impacts.
Since the new prices for Dynamics 365 applications will come into effect on October 1, 2024it means that there are six months' time to prepare for the impact on the wallet.
Companies that leverage Dynamics applications integrated into CRM and ERP for sectors such as marketing, sales, customer service, field service, finance, operations, and supply chain must make a review of their licenses , and Plan a roadmap for the strategic features necessary for business development.
Let's look them in detail:
For the rapid identification of inactive subscriptions or those with overestimated functionalities compared to actual usage, it is advisable to integrate your suite with an advanced SAM analysis platform specialized for SaaS Management, such as Snow Software by Flexera.
Compared to the data already available within the MS Dynamics suite, which provides us with financial views and license allocation, Snow provides information on the most important detail, which is verified use. Having data on SaaS application usage is the only way to identify allocated but unused licenses , and to perform downgrades from costly premium packages.
At WEGG, with our experience in software consulting, we can assist you in configuring the tool and interpreting the data to obtain easily digestible reports regarding cost optimization.
Here is an example of a report where we verify data on unused licenses:
These insights will indeed be useful for the vendor table to review the renewal conditions, suspending unused subscriptions and revising the packages that are not fully utilized into more economical formulas.
Our intervention is not limited to the historical data but looks to the future: by aligning with your strategic roadmap, we highlight the subscription proposals that best meet business needs over a longer timeframe, in order to obtain greater discounts during negotiations.
To these aspects, we add nother element worthy of attention: verifying whether there are Power Apps users who need to access Dynamics 365 applications.
We raise this issue because Power Apps functionalities are often used to customize and extend Dynamics 365 applications such as Sales and Customer Service according to business needs.
Recent updates in the Licensing Guide from March 2024 (and subsequently revised in April) suggest paying attention to the topic: the number of "restricted tables” related to Dynamics 365 applications that Microsoft Power Apps license holders will no longer be able to access without a corresponding Dynamics license has been clarified.
Specifically, Appendix J (Change Log) notes the addition of some footnotes establishing:
The news was also reported by The Register which had asked Microsoft for explanations… and it seems Microsoft has backtracked in the new April Licensing Guide, where both notes have been removed (but the Change Log has not been updated).
We can only assume that the changes announced in March are no longer applicable, but given that Microsoft’s licensing model is complex, particularly due to the overlaps in functionality between Dynamics 365 and Power Apps (both use Dataverse as a common data model!), we recommend thoroughly understanding the nature of these 'overlaps'.
This is because, if they fall under the "restricted tables' it is advisable to perform a preliminary check with the vendor regarding the presence of any constraints that require a license to ensure that you do not need to pay for new subscriptions to Dynamics.
Even though the number of affected users might be small (typically developers) the unit price difference is still considerable: a subscription to Microsoft Power Apps costs €18.70 per month per user, while a Dynamics 365 CRM Enterprise subscription costs €88.90 per month per user (which is four times more).
If you need further information on the topic, please feel free to contact us at [email protected]!
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