Acquiring a Microsoft Dynamics 365 licensing can seem like a complex task. This article outlines the most important considerations and steps involved in purchasing a Dynamics 365 license for your organization, focusing on the two most popular purchasing models: the Enterprise Agreement (EA) and the Cloud Solution Provider (CSP).
Understanding the Dynamics 365 Licensing Models
Before acquiring the license, it is essential to first understand the two primary models of acquisition, each defined by its specific terms, conditions, and implications for usage and ownership.
Enterprise Agreement (EA):
The Enterprise Agreement is ideal for larger organizations with a requirement of at least 250 users or devices. This model offers great value through bulk purchasing and is particularly cost-effective for government and educational institutions. Under an EA, you can have the flexibility to adjust the number of users, devices, and services throughout the agreement term without the need for individual purchase orders, according to the annual true-up process.
Key Benefits:
- Flexibility in adding or adjusting user counts and services.
- Lower pricing tiers for bulk purchases.
- Suitable for large organizations.
Cloud Solution Provider (CSP):
The CSP model offers a partnership with Microsoft vendors, allowing even small to medium-sized businesses to obtain Microsoft products and services specifically adapted to their needs. Moreover, unlike the EA, CSP agreements can start with as few as 1 to 20 users, depending on the product. This model is very flexible, offering monthly subscriptions with options for one-year or three-year agreements. If you want to know more about benefits of Dynamics 365 application hosting in cloud read this article.
Key Benefits:
- High flexibility with the ability to scale up or down monthly.
- Immediate adjustments for new users or products.
- Lower entry requirement for number of users.
Choosing the Right License Model for Your Business
The choice between EA and CSP largely depends on your organization’s size, budget, and flexibility needs. Here are some factors you should consider:
- Organization Size: Larger organizations might benefit more from EAs due to the volume discounts, while smaller organizations may find CSPs more suitable due to the lower minimum user requirements.
- Budget Flexibility: If your budget allows for a long-term commitment, an EA might be beneficial. For those who prefer less upfront commitment and more flexibility, a CSP is advantageous.
- Operational Needs: Consider how often you will need to adjust your licenses. CSP is much more flexible in terms of changes compared to EA.
Additional Purchasing Options
Some Dynamics 365 services, such as Fraud Protection, can be acquired on a pay-as-you-go basis via an Azure subscription. This allows you to pay only for what you use with monthly billing, which again gives businesses another layer of flexibility.
Licensing Compatibility and Considerations
It is important to ensure compatibility when mixing licenses from different programs. Generally, mixing volume licensing with licenses obtained through a reseller can lead to issues with subscription compatibility. However, for short-term needs, MPSA/CSP licenses can be mixed with EA licenses. If you need more details about the process, check out Microsoft Dynamics 365 country, language, and localization availability and detailed licensing information here.
So which Dynamics 365 licensing option should you choose?
Deciding on the best licensing model for Dynamics 365 comes down to aligning your business specific needs with the appropriate agreement type. The Enterprise Agreement is a solid choice for larger entities looking for higher discounts as they will implement bigger projects, while the Cloud Solution Provider model offers better flexibility, which fits small to medium-sized businesses well, that are planning to expand in the future. By weighing these options carefully, you can ensure that your business maximizes the benefits of Microsoft Dynamics 365 applications, which will increase operational efficiency and help refine business processes.
