Microsoft is set to shake up Dynamics 365 pricing and packaging again

Microsoft plans to make some pricing and licensing changes to its Dynamics 365 CRM and ERP family as of October 1, according to information it shared with its partners recently.

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Credit: Microsoft

Microsoft has plans in the works to change the way it is pricing and packaging its Dynamics 365 CRM and ERP applications. Officials shared some of the changes which will go live on October 1 with Dynamics 365 partners at last week's Inspire partner conference.

I first saw the mention of the coming changes in a couple of articles from MSDynamicsWorld.com. As that publication notes, Microsoft is moving away from its current "plan"/bundle approach because "Plans are not landing the value message." Officials told partners that Plans move customers into talking about pricing but not "value," they found. And many customers end up paying less for plans than they would if they were buying single apps that they use. In the case of Dynamics 365 Customer Experience (aka CRM), 80% of those users are just using a single app.

Currently, Microsoft offers CRM via a Customer Engagement Plan for $115 per user per month; ERP via its Unified Operations Plan for $190 per user per month; and a combined Dynamics 365 Plan for $210 per user per month.

The new model calls for Dynamics 365 Customer Engagement to be sold as a base license with "attach licenses," which would be heavily discounted, sold additionally when needed. The current $115 per user per month will be replaced by a $95 per user per month base license price, plus a $20 per user per month attach license price, as noted on a slide from a Microsoft presentation tweeted by Dynamics 365 CE trainer and professional Tommi Oksanen.

The current Unified Operations plan will be carved up as four separate applications: Finance, Supply Chain Management, Talent and Retail, officials said, according to MSDynamicsWorld.com.

The Dynamics 365 apps will still be able to be bundled. But the new model also will introduce new pricing on a per-app basis. Some customers may see an up to 10% price increase as a result of the change, Microsoft officials said.

I asked Microsoft for more details or any additional comment they'd like to make on the coming changes. No word back. 

Update (July 23): Still no word back from Microsoft, but I hear the session(s) where these changes were described have been removed from the Inspire replay site. Luckily, Jon Stypula found the uber-Dynamics 365 "placemat" SKU slide and tweeted it out today:

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Update (July 25): Microsoft has posted a Dynamics 365 recap of the Inspire partner conference and includes two paragraphs which acknowledge the coming pricing/licensing changes. The post does not explain these changes; instead, it points to two sessions held at Ignite -- which are the same ones I reference in this post -- which cover the details. 

Today's post says: "In October, Microsoft will be moving from "one-size-fits-all" Microsoft Dynamics 365 licensing plans to focus on providing customers with the specific Dynamics 365 applications that meet the unique needs of their organization. Customers need software that aligns with their functional roles and scenarios, and they require the ability to add or remove applications as their company grows and changes over time. The new licensing model will allow customers to purchase the applications they need when they need them. Each application is extensible, and applications can be easily mixed and matched to configure integrated solutions that align with a customer's unique business requirements."

Microsoft also posted a separate but related post on changes to PowerApps and Flow pricing and licensing. In October, Microsoft will add a new PowerApps per-app plan and a new Flow per business process plan.

The PowerApps per-app plan will be $10 per user per app per month. PowerApps per user plan will replace existing P1 and P2 plans and will be $40 per user per month. The Flow per user plan will be $15 per user per month, and the Flow per business process plan will be $500 per business process per month for up to five active workloads. More details are in this post.

Microsoft has been regularly changing its Dynamics 365 pricing and licensing for the past several years. In 2016, Dynamics 365, an SMB bundle of ERP and CRM applications and services, was going for $50 per user per month. Microsoft was selling both a Business Edition bundle and an Enterprise Edition bundle. Since then, Microsoft did away with the Business/Enterprise edition distinction