Reduce your Dynamics 365 License costs by 92%?


I hinted in my last post about possibly being able to reduce your Dynamics 365 license costs by up to 92%. I may have been a little too coy, so I titled this post more overtly. Was I just bullshitting you? Well… not all of you.

It Depends

Follow me here as there are a lot of “ifs”, but many organizations will meet them.

  • IF, you are paying $115/user/month for the Dynamics 365 Customer Engagement Plan Licenses.
  • IF, you are only using the basic out-of-the-box features.
  • IF, the advanced capabilities you are using were all custom built.
  • IF, any third-party solutions are compatible, or you can do without them.
  • IF, your users primarily work in a single application, ie. “Sales” or “Service” but not both.
  • IF, you are not using things like “Relationship Insights,” or any of the A.I., or other advanced features.

Depending on your answers to the above “Ifs”, you may well be able to move to the upcoming PowerApps Per App Plan model for $10/user/month. My math says that from $115, down to $10, is a 92% savings. Is this even realistic?

How is this possible?

The same way it would be possible for certain people to get by fine with Notepad instead of Word… unused features. As a partner who has been involved with hundreds of deployments, I can safely say that the number of customers who use every feature of the first-party apps they are paying for is… zero. I feel quite confident that number does not change for customers using even half of the available features. Of course no two customers are alike, and the mix of features they actually do use varies significantly, but they are all paying for all of the features. Obviously my 92% scenario assumes you are currently paying the highest price ($115), and that you could ultimately be satisfied with a single PowerApp at $10. Not everyone will, and many are also paying less than $115.

Free Money?

Not exactly. It is not quite as easy as buying a $10 license and cancelling the others. Even if you meet the parameters I outlined, or are willing to give up a few things to do so, there is still some refactoring and a migration to be done. This too will vary significantly from customer to customer. If you are able to save some money, or a lot of money, you will have to spend some money to get there, so the ROI may be deferred. For example, let’s say you fit the profile perfectly. You have 150 users and are paying (let’s be more conservative here), $95/user/month for the Enterprise Sales App. Assuming your actual needs could be met with a custom built PowerApp, you could potentially save $12,750/month. Of course you need to have the PowerApp built which will cost you something (you may want to explore our RapidStartCRM accelerators in AppSource, and RapidLABS services for a fast and low-cost way to do this). I don’t want this to sound like a slam dunk, for some customers the cost to do something like this may actually exceed all of the development costs they have invested so far. There are a lot of factors in this equation.

Power “less”

By now you may be thinking, this sounds great… for an organization with simple needs. What you will forgo in this Per App Plan are the “pre-built” capabilities of the First-Party applications. But… they are PowerApps too. With enough development funds and time, you could practically replicate them entirely, but that would be silly. Instead, you would just build exactly what you need, no more and no less. We have a customer with thousands of users, where everything but Account and Contact was custom built (Account and Contact already exist in PowerApps). In their case, the customization solution (which includes a single app) could be installed directly on a CDS instance with no changes at all, then just migrate their data, and they would be in the exact same place. There are some massive deployments out there, that with little effort could go this route.

In fact, for many of my customers, the Per App Plan offers more than what they are even utilizing today. An “App” in the Per App Plan can include a Web App (aka Model-Drive App) like most customers are already using today, but that “App” can also include a Mobile App (aka Canvas App), which less of them are using, and a Web Portal which very few of them are using. The Outlook App is also available and works the same way.

Is Microsoft Okay with this?

I would guess that depends on how many of their existing customers, walk through this door that Microsoft created to gain new customers. In my example above, trading $14,250/month for $1,500/month may be an unintended consequence of Microsoft’s new model. Make no mistake, this will not be a viable option for everybody. Again, the first-party apps bring a plethora of advanced capabilities that many customers depend on, that would not be practical to rebuild. But it will be interesting to see just how many, are using enough of the out-of-the-box advanced features. The difference in cost sets a pretty high bar for Microsoft’s first-party apps. Microsoft will need about 10 net new PowerApps Per App users to make up for each D365 Plan user who makes this switch, but clearly their expectation is that the PowerApps Per App Plan model will blow up to a point where they don’t really care. And why wouldn’t it? This is more potential business application “power” for $10 than any other company even comes close to, and at $10 moves it into the category of: “Affordable to Anyone”.

Is Dynamics 365 Dead?

Once again, Mark Smith’s (@nz365guy) looming prediction that “Dynamics 365 is Dead“, shows more life. While there will continue to be a place for Dynamics 365 Customer Engagement Apps for the foreseeable future, it’s no longer the “take it or leave it” product it once was. PowerApps has created a highly viable alternative for many customers… new or existing.

If you’re interested in exploring this, Forceworks is offering a free Assessment, to help you see if you can take advantage.

Steve Mordue MVP

Steve Mordue, a Microsoft Business Applications MVP, is the CEO of Forceworks, a 2014 Microsoft Partner of the Year. Steve started his business applications consulting career in 2001, originally supporting Salesforce.com as a Certified Consultant. Steve transitioned his consulting practice to Dynamics CRM, (now Dynamics 365) in 2011. Steve has been engaged in hundreds of deployments over the course of his career. As one of the leading Microsoft Business Application Consultants, recognized by Microsoft as an expert, Steve has provided training, on behalf of Microsoft, to other Microsoft Partners globally on how to launch and build successful practices. Steve is a member of the Worldwide Dynamics Partner Advisory Council, and is a frequent presenter and panelist at global Microsoft events. The opinions shared in this blog are Steve's alone. If you are looking for Microsoft confidential information, you will not find any here.

4 Responses

  1. Antonius Meliat says:

    Hi Steve – thanks for mentioning this blog post during your weekly live chat with Mark. Thought I’d have a closer look. Just a quick observation. I note from https://powerapps.microsoft.com/en-us/pricing/#compare-plans that there isn’t a $10 plan. Instead Plan-1 is $7 and Plan-2 is $40. The Model-app functionality seems to be missing from the Plan-1 license. Is this another update on power app licensing model? I’d suggest that folks wanting to build out business apps will gravitate to the Plan-2 license to take advantage of Webapps with CDS. Consequently the savings you mention would be substantially reduced.

  2. nicknow (@nicknow) says:

    At some point I expect that all of this pricing complexity will disappear and we’ll pay entirely on a consumption model (storage & compute.) I could see per-user pricing dropping to a $2 per month plus storage and some type of compute charge (probably based on API calls.) You end up with this low-code/no-code dev platform for feeding business data into Azure. The biggest challenge for that vision today is pricing. Take a simple scenario, such as guest registration and check-in, which is relatively easy to create in CDS except you need everyone to be a user so now it costs $48k per year (for 100 employees) which is ridiculous when SaaS providers have the capability at a few hundred dollars a month. So real quickly any organization of more than a few people decides it’ll be cheaper to use a SaaS product (which might not be a perfect fit) or try to build it in SharePoint (since they already have it with Office 365.)

    So everyday that Microsoft doesn’t have a cost-effective solution to this problem it is a chance for SaaS products and other low-code/no-code platforms to find traction. In most cases that means Azure will never get the compute or storage revenue from those workloads. PowerApps/CDS is the key to driving a lot of workloads to Azure – and that is what Microsoft really cares about over the next decade.

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