Licensing and Pricing Model - Rishan Solutions

In the modern enterprise software landscape, Microsoft Dynamics 365 and the Power Platform stand out as leading solutions for digital transformation. These platforms offer integrated cloud-based applications that cover customer relationship management (CRM), enterprise resource planning (ERP), business intelligence, automation, and app development.

However, to maximize their value and ensure cost efficiency, organizations need a clear understanding of the licensing and pricing models that govern access to these services. Microsoft offers a flexible, modular licensing structure designed to support various business needs—but with this flexibility comes complexity.

This article provides a deep dive into the licensing and pricing models of Microsoft Dynamics 365 and Microsoft Power Platform, covering types of licenses, pricing tiers, user roles, capacity limits, and common strategies to optimize costs.

Why Licensing Matters

Licensing governs how users access applications, the features they can use, and how much capacity (storage, API calls, etc.) is included. A poor understanding of licensing can lead to:

Over- or under-licensing
Unexpected costs
Compliance risks
Suboptimal usage of platform capabilities

Thus, it is critical to align your licensing strategy with your organization’s user roles, functional requirements, and growth roadmap.

Microsoft Dynamics 365 Licensing Overview

Dynamics 365 uses a modular licensing model. Organizations can purchase only the apps they need, while ensuring all modules work seamlessly together due to their shared foundation on Microsoft Dataverse.

There are three main licensing models:

1. User-Based Licensing

This is the most common licensing type and is assigned per named user. It includes:

Full Users: Individuals whose roles require access to all functionality (e.g., salespeople, finance officers). These users require a Base License.
Attach Licenses: Additional apps a Full User needs beyond their Base License, offered at a discounted rate.
Team Members: Light users who need limited access, such as viewing records or running reports.

2. Device-Based Licensing

Applicable in scenarios where multiple users share a single device (e.g., retail stores, warehouses). A single license covers unlimited users on one device.

3. Capacity-Based Licensing

This governs usage of platform resources such as:

Dataverse storage (database, file, log)
API calls
AI Builder credits

Dynamics 365 Apps and Licensing Tiers

Microsoft Dynamics 365 offers numerous applications. Below are some of the key apps and their typical licensing structures (prices may vary by region and partner discounts):

App	Base License Price (USD/month)	Attach Price (USD/month)
Sales Enterprise	$95	$20
Sales Professional	$65	N/A
Customer Service Enterprise	$95	$20
Field Service	$95	$20
Marketing (tenant-based)	Starts at $1,500 per tenant	N/A
Finance	$180	$30
Supply Chain Management	$180	$30
Human Resources	$120	$30
Project Operations	$120	$30
Commerce	$180	$30
Business Central Essentials	$70	N/A
Business Central Premium	$100	N/A

Note: Prices and availability are subject to change. Licensing also includes capabilities tied to use rights like AI, forecasting, and integration levels.

Attach Licenses Explained

Microsoft introduced Attach Licenses to reduce cost for multi-role users. For example, a user who primarily works in Sales (base) but occasionally needs access to Customer Service can purchase Customer Service as an attach license for $20/month, instead of $95/month.

Rules for Attach Licenses:

A user must have at least one base license.
Only one base license is allowed per user.
All additional licenses must be attach licenses.
Attach licenses are only available for Full User apps (not for Team Members or device licenses).

Team Member Licenses

Team Member licenses cost around $8/user/month and provide limited functionality:

Read access to all data
Run predefined reports
Update personal information
Time and expense entry
Participate in workflows

Team Member licenses are ideal for executives, occasional users, or those who primarily need read-only access.

Important: As of recent updates, Microsoft restricts Team Members to specific app modules. Always review the Use Rights Guide for current limitations.

Dynamics 365 Licensing Bundles

Microsoft offers bundled plans for customers needing access to multiple apps:

1. Dynamics 365 Plan

Previously offered access to all apps under one price. This plan has been deprecated but may still exist for legacy customers.

2. Customer Engagement Plan

Combines:

Sales
Customer Service
Field Service
Project Operations
Marketing (tenant-based)

This bundling was once attractive but now, with Attach Licenses, modular pricing often gives more flexibility and cost savings.

Power Platform Licensing Overview

The Power Platform consists of four main components, each with distinct licensing:

1. Power Apps

Per App Plan: $5/user/app/month. Best for users needing access to specific apps.
Per User Plan: $20/user/month. Allows unlimited apps and portals per user.
Pay-As-You-Go: Consumption-based pricing linked to Azure subscription, ideal for sporadic use.

2. Power Automate

Per User Plan: $15/user/month. Unlimited flows for an individual.
Per Flow Plan: $100/month for five flows shared across the organization.
Process Automation: $150/month for unattended RPA with desktop flows.

3. Power BI

Free: Limited to personal dashboards.
Pro: $10/user/month. Needed to share and collaborate.
Premium Per User: $20/user/month.
Premium Capacity: Starts at $4,995/month, designed for large-scale analytics.

4. Power Virtual Agents

$200 per 1000 chatbot sessions/month.
Add-ons available for higher usage.

Licensing for Storage and Capacity

All Dynamics 365 and Power Platform tenants come with base capacity:

Dataverse Database: 10 GB
File Storage: 20 GB
Audit Log: 2 GB

Additional capacity is billed as:

Database: ~$40/GB/month
File: ~$2/GB/month
Log: ~$10/GB/month

Monitor capacity usage in the Power Platform Admin Center to avoid unexpected charges.

Licensing Considerations for Portals

Organizations using Power Pages (formerly Power Apps Portals) need to license external user access:

Authenticated Users: ~$200 for 100 users/month
Anonymous Users: ~$75 for 500 users/month

External licensing is required for customers, partners, or vendors accessing portals.

Cost Optimization Strategies

To manage costs effectively, consider the following strategies:

1. License by Role

Map user needs to appropriate licenses. Avoid assigning Full User licenses to those who only need read access.

2. Audit Usage Regularly

Use the Microsoft 365 Admin Center and Power Platform Admin Center to review license usage. Reclaim underused licenses.

3. Use Attach Licenses

Leverage Attach Licenses instead of multiple full licenses where multi-role users exist.

4. Leverage Team Members

For users requiring light interaction, Team Member licenses offer significant savings.

5. Review Capacity

Monitor Dataverse and API usage. Optimize storage and consider archiving strategies to reduce extra capacity charges.

Licensing for Nonprofits, Education, and Government

Microsoft offers special pricing for:

Nonprofits: Heavily discounted rates across all Dynamics and Power Platform apps.
Education: Special licenses for student, teacher, and administrative roles.
Government (GCC, GCC High): Compliance-based licenses for federal and state institutions.

Licensing Management Tools

Administrators can use the following tools:

Microsoft 365 Admin Center: Assign and manage licenses.
Power Platform Admin Center: Monitor environment usage and storage.
Azure Cost Management: Track pay-as-you-go or Azure-subscribed resources.
License Reporting Tools: Third-party tools like FastTrack or internal dashboards can help with forecasting and compliance.

Recent Trends and Updates

Microsoft frequently evolves its licensing model to:

Support new AI and Copilot capabilities
Transition from per-user to usage-based pricing in specific scenarios
Introduce “seat-based” Copilot licenses (e.g., Sales Copilot, Service Copilot)

Stay updated through the Microsoft Licensing Guide and partner announcements.