Microsoft Dynamics 365 price increase from
1st October 2024: What are your options?
In April 2024, Microsoft announced upcoming price increases for Dynamics 365 products from 1st October 2024. This date is approaching, and I have not found any announcement
(yet) that there was a change of plan. Microsoft's announcement can be found
here.
According to the press release this is the first pricing update for Microsoft Dynamics 365 in more than five years. This may be true for US customers, by many of us outside of
the US, including in the UK, received “exchange rate” increases from 1st April 2023. That announcement is
here.
While the Dynamics 365 products provide an impressive range of functionality, much of the full functionality is only used by large companies and corporations. Many of
whom will most like not be paying the full price anyway, due to their Microsoft Enterprise Agreements and discounts from the larger license distributors. For clients like ours (Average size is currently 52 users.) these price increases, of approximately 10.5%, will not bring much joy.
Power Apps make you happy
One thing that will make many of our clients slightly happier, is that no cost increases have been announced for Power Apps licenses, which is the predominant way that we license the systems that we set up for clients these days. However, our older clients, set up before Power Apps were a thing
and those with hybrid Dynamics/Power Apps systems, will feel the pain.
Introducing Power Apps
Despite what Microsoft’s marketing webpages may make you think, there are in fact two types of Power Apps:
1) Canvas Power Apps
These were initially intended to run as “mobile” apps on phones and tablets,
but which can also be run in a browser or embedded in Microsoft Teams. Canvas Power Apps tend to be single-purpose apps, that would not, for example, provide the breadth
of functionality, that you would get in a CRM business application, such as Dynamics 365 Sales. However, the major benefit of Canvas Apps is that the person making them has
full control over design of the user interface, and so a very rich user experience can be created if desired.
2) Model-driven Power Apps
This type of Power App (which have a terrible name in my opinion) are business applications that you create on the same platform that Microsoft used to
create their Dynamics 365 Sales, Customer Service and Field Service applications. You start off with core tables (Account, Contact, activities, notes) and platform capabilities
(such as email sync, SharePoint integration, etc) . You then use the platform’s low-code tools to create everything else. This is now the starting approach that we
(Solutions Shared) follow when creating custom bespoke business applications for our clients.
Why do we build business applications for our clients this way, rather than just customizing something like Dynamics 365 Sales? We do this because the ongoing license
costs are significantly cheaper, about twenty-one times cheaper, if you compare Dynamics 365 Sales Enterprise to a Power Apps license that covers access to one App, which
is what most of our clients’ staff need.
Your Options
If you are currently using a system that was set up using one of the Dynamics 365 “CRM” apps (Sales, Customer Service or Field Service) there are some options that you
can take to mitigate or even sidestep these price increases.
1) Review what functionality your staff are currently using.
If you are simply using Accounts (often renamed to Organizations in charity systems), Contacts, activity records (emails, appointments, phone calls & tasks), notes, and
then a set of custom entities\tables that were created to hold your specific data, you most likely have a system where most users, if not all, can use a Power Apps license,
rather than a Dynamics one. This is often the case with Charity/Non-Profit systems, especially older ones, where Dynamics was used as the platform upon which to create a custom
set-up for the Charity/Non-Profit.
Another system set-up that falls into this category, are those where Dynamics Sales was used for the sales pipeline, but a fully custom set-up was then added alongside it,
to provide, for example, delivery & operations functionality. Staff that are working within the delivery & operations side would only need a Power Apps license, which
would also allow read access to the sales data.
2) Migrate some functionality to Power Apps, within the same system.
The viability of this option depends on how deeply your business processes are entwined into the Dynamics 365 out-of-the-box functionality, and any add-ons
and integrations with external systems. But, in theory, if you are light users of pre-build Dynamics functionality, it could be replaced with bespoke Power Apps
functionality, still within the system; the data could then be transitioned “sideways”, and licenses switched to Power Apps ones. There is obviously a ‘build & migrate’ cost
involved here, but depending on the complexity the ROI could be realized quiet quickly. Having more users (and hence Dynamics licenses) would also speed up the time to ROI.
3) Sweat your asset!
Okay, so you might effectively be stuck using Microsoft’s pre-build Dynamics functionality, which will be much more likely if you are using Customer Service or Field Service.
owever, if you have additional business processes that are being managed via other systems (internal or external), or spreadsheets and/or SharePoint, there may well be a case
for moving those business processes into your core Dynamics system, through the addition of Power Apps built (& licensed) functionality. For example, if you were using a cloud
business application, re-creating that functionality within your Dynamics system, may well drop your overall ongoing subscription license costs, especially when the lowest
priced Power Apps license costs £4.10/month. Obviously, re-building complex SaaS applications is not going to be a viable option, but moving simple cloud apps inside your
Dynamics system is. Conversely, when it comes spreadsheets and SharePoint lists (which will already be covered under your Microsoft 365 licenses), you will be adding the
Power Apps subscription costs, but you will be moving to a significantly more “joined up” setup for the business, and so the productivity gains will more than cover the
additional Power Apps costs.
Next steps
If this post has given you any food for thought, and you would like to have a chat to discuss your situation, please contact us below.
CONTACT US?
About the Author
John Clark
Founder | Microsoft Dynamics 365 & Power Platform Consultant, Solutions Shared Ltd