If you’ve read any of my articles recently you’ll know that I view Microsoft’s release of Dynamics 365 as a game changer that adds even more strength to the argument that it’s time for you to migrate from your on-premise CRM to the cloud. In February, I outlined the top five reasons to move to Dynamics 365, and earlier that same month I explained why Dynamics 365, with its combination of ERP and CRM functionality, is perfect for small-to-medium-sized businesses.
But I’ve also seen some pushback within the Dynamics community from those who experienced sticker shock when they examined the Dynamics 365 pricing page. Many consultants and, of course, Microsoft’s competitors are making the case that Dynamics 365 users will need to pay much more to access the exact same functionality they received under the old Dynamics CRM Online licensing. In this article I’m going to explain why (in most cases) they’re wrong.
Why the prices (at first) seem higher
I understand why many people think the prices are higher. Under the old model, a license that gave you the full sales and customer service functionality would cost $65 per month per user when you purchased a Professional license. With Dynamics 365, to achieve the exact same functionality, you’ll need to purchase what’s called an Enterprise Plan 1 license, which costs $115 per user per month. I’ll note briefly that this Plan 1 license actually gives you access to several new tools, including Microsoft Power Apps and Microsoft Flow and as well the new Project Service Automation and Field Service Automation, but for the sake of argument, let’s say you don’t care about these tools/modules and you just want the same offerings as before. In this scenario, it seems like you’re paying $50 more, which can quickly add up once you added a few dozen users.
But not so fast
While at first this might seem like a blatant price hike, if you peruse the pricing page further, you’ll learn about the new Team Member license. For only $10 per user per month, a team member license will allow you “read only” access to all modules and write access to Accounts, Contacts, Activities, Tasks and Notes as well as any custom entities you create. What most organizations will find is that the overwhelming majority of their CRM users only need this light access license, which means you only need to purchase a handful of the more expensive licenses. You can also purchase Sales and Customer Service separately for $95 per user per month if users only need access to those specific areas. It’s not a huge savings, but $20 per user per month adds up. To give you an example, I’ve analyzed Cobalt’s own usage under the 2 models.
Under the CRM Online model, we had 27 Professional users at $65 per user for a total of $1,755 per month or $21,060 per year. Under the new Dynamics 365 licensing, we have 2 Enterprise Plan 1 users, 5 Enterprise Sales users and 20 Team Member licenses. This totals $1,010 per month or $12,120 per year adding up to a savings of just under $9,000 per year!
Of course, not every organization can get by with these team member licenses, and if your company does need complete Plan 1 access for most employees, your prices will go up (that’s why I said “in most cases”). To date, most the clients we’ve worked with are saving money under this new structure.
It’s important to note that if you are a new Dynamics 365 customer, Microsoft has several promotions aimed at SMBs. Under the latest promotion, you can get both Sales and Customer Service for $68 per user per month. There is also a $40 promotion for Sales only and $5 per user for Team Member licenses. Note that all of these SMB promotions have limits to the number of licenses you can purchase.
How this pricing plan will make your organization more flexible
Because most CRM plans charge you per user, the costs can add up really quickly as you add new users. This has led to many organizations restricting the number of employees who have access to CRM. But the great thing about the newly-added team member license is that it’ll give those organizations much wider flexibility in distributing CRM access, in many cases allowing them to give CRM accounts to employees who otherwise wouldn’t have them.
Not only that, but if you get your CRM through a Microsoft Cloud Solution Provider (CSP) partner like Cobalt, then you’re only charged for how much you use Dynamics 365 for that particular month. So let’s say you start off one of your employees on a team member account, but then within two months you decide they need the greater access afforded by a Plan 1 account. We can easily switch out those licenses for you. The same goes if you want to downgrade from a more expensive license to a less expensive one.
So yes, while it might seem like Dynamics 365 costs more, Microsoft has actually changed its licenses to give you more flexibility in picking and choosing which package meets your needs. So when you consider that and the bevy of new offerings rolled into this new product, you’ll realize it is, indeed, time to make the switch.
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