Microsoft's Dynamics 365: Tiered pricing, discounts will be key

When alleged pricing leaked for Microsoft's coming Dynamics 365 offering in September, Microsoft execs and others were quick to caution that it wasn't official.

The 'official' Dynamics 365 pricing is out now, ahead of its appearance on the November 1 price lists, and it's basically the same as what leaked a month ago -- with a couple of caveats.

The Business Edition SKU will be $50 per user per month, with the Financials app -- the only piece available this calendar year -- priced at $40 per user per month standalone. Enterprise Plan 1 will be $115 per user per month and Plan 2, $210 per user per month. Individual apps in these plans are $95 each. All that matches what leaked in September.

However, there are a couple of wrinkles that may make Dynamics 365 attractive to those evaluating it against Salesforce, SAP, Oracle and other players in the CRM/ERP space.

Via these tiers, Business Edition can drop to $28 per user per month, and Enterprise Plan 1 prices may go as low as $60 per user per month (with the light-use team member offering bottoming out at $4 per user per month).

Let's just get this out of the way: Microsoft's pricing and licensing scheme for Dynamics 365 is not simple. There are two editions (Business and Enterprise), two user subscription options (by user and application) two subscription types (full and light); and two Plans for Enterprise (P1 and P2). There also is the notion of tiered pricing coming with Microsoft's hybrid CRM + ERP suite, which will reward users with more seats with lower prices per user.The easiest way to show what's going on is with charts.

Here are a few from Microsoft's own updated pricing and licensing guides shared with resellers earlier this month:

The Financials module in the Business Edition, as reported previously, is the Microsoft Financials as a service offering codenamed "Project Madeira." The Sales and Marketing modules in this edition aren't coming until mid-2017, but in the interim, Microsoft is planning to offer interested customers the ability to get the same Sales and Marketing modules that are part of the Enterprise Plan for a discounted rate, according to the company's pricing and licensing documentation.

Microsoft is going to use Adobe Marketing Cloud as its Marketing Module in its Enterprise Editions of Dynamics 365, officials have said.

A couple of other things worth knowing that weren't clear to me until I read through Microsoft's latest Dynamics 365 FAQs and PowerPoints that it made available to its channel partners earlier this month:

• Starting November 1, brand-new Dynamics Online customers (CRM and ERP) will only be able to get Dynamics 365. Dynamics CRM Online and the online ERP offerings from Microsoft won't be available to first-time customers.
• Existing Dynamics customers can continue to use their existing Dynamics CRM and ERP) offerings if desired, but at renewal, must transition to Dynamics 365 SKUs
• There will be a "20% Switcher" offer for new customers switching from Salesforce, SAP or Oracle to Dynamics 365 plans.For existing ucstomers, there will be "transition offers" meant to blunt and/or eliminate the impact on Dynamics CRM Online users of the new Dynamics 365 pricing
• Current CRM Online and Dynamics AX SKUs will be removed from pricelists on November 1, and all new customer purchases after November 1 will be on Dynamics 365 SKUs. Dynamics CRM seemingly will be renamed Dynamics 365 on-premises.
• Existing customers who want to stay on-premises still will be able to buy Dynamics CRM, AX, NAV, GP and SLwith Software Assurance. But as of October 2016, "no CRM on-premises licenses will be sold to new customers in DPL (Dynamics Price List).

Update: Microsoft also reconfirmed in a separate blog post today, October 24, that the existing Microsoft Dynamics Marketing app is being phased out over time.

There's a lot to digest. For further reading, I'd recommend the downloadable Dynamics 365 Packaging and Pricing PowerPoint deck and the 16-page FAQ document.