How is Dynamics 365 licensed?

New Dynamics customers looking to purchase CRM software have three options:

Applications can be purchased individually, for example, licensing only the Sales and Customer Service applications if the business needs them at the time.

You can purchase a Customer Engagement license, which includes four core CRM applications as well as a social media management service called Microsoft Social Engagement.

You can purchase Dynamics 365, which includes both CRM and ERP applications.

Dynamics 365 is licensed per employee. This license gives access to the software to one user. 

There are two options when it comes to purchasing a Dynamics 365 license. Licenses can be either full licenses, which give users access to all features, or team member licenses, which give the license holder limited access to certain features. Customers can combine these license types to suit their users and required access levels.

For example, if a company chooses the Customer Engagement plan, it can purchase 10 seats for full users and 15 additional seats for team members. This means that ten full-time users will be able to use all the features of all the apps included in the plan. People who have Team Member licenses will also be able to access all included apps, but they will only be able to use certain features, such as accessing timesheets, recording time and expenses, and submitting reports.


License costs

When purchased individually, each of the Dynamics 365 CRM applications—Sales, Customer Service, Field Service, and Project Service Automation—costs $95 per month for each full license and $8 per month for each Team Member license.

App licensing under the Customer Engagement Plan costs $115 per month for each full license and $8 per month for each Team Member license. (There are also tiered pricing options for organizations purchasing a large number of licenses.)

The Dynamics 365 plan costs $210 per month for each full-featured user license and $8 per month for each Team Member license.


How is Dynamics 365 deployed?

Customers can deploy Dynamics 365 in one of three ways:

In the cloud

The software is not installed on every user device. Instead, access is via a web browser, SaaS, or software as a service. Customers who choose this deployment path will use the cloud-hosted version of Dynamics, meaning it is installed on the provider's own servers and accessible remotely over the Internet. Dynamics 365 SaaS are hosted on either the Microsoft Azure public cloud or an Azure managed service provided by Microsoft partners.

This option allows users to take advantage of cloud-only features, such as integration with other programs and smart reporting features powered by machine learning. Running Dynamics 365 in the cloud also eliminates the need for hardware and internal data storage, and means that users do not need to manually install or update software as everything is managed by the vendor.


A traditional software deployment method that allows users to host their Dynamics 365 software either on their own servers or on the servers of an IT partner. Businesses using Dynamics 365 on-premises will install the software on their devices and store all data on their own hardware.

On-premises Dynamics 365 instances may be a good choice for companies that are required to adhere to strict data retention policies or that do not have a stable enough Internet connection to continuously access the SaaS version of the software.


Hybrid deployments, also known as Cloud & Edge, are fully integrated with the Microsoft cloud, but transactions and data are stored locally in users' own data center and synced as needed.

The ability to use the system offline can be useful for industries where business continuity is particularly important, such as retail or manufacturing. A hybrid deployment allows customers to run their point-of-sale transactions connection-agnostic so that users can collect data and complete transactions regardless of an internet connection. Any data collected offline can later be synced to the cloud for business analytics or reporting.

What feature differences exist between a Dynamics 365 cloud deployment and an on-premises deployment?

Users using the Dynamics 365 SaaS model can access extensive and constantly evolving business intelligence tools. The cloud not only stores and processes your data, but also learns from it. Microsoft has invested heavily in machine learning in recent years, and cloud users are reaping the benefits. Dynamics 365 offers comprehensive, real-time performance analysis and helps you visualize business data with intuitive, customizable reports and dashboards.

With Microsoft's 99.9 % Uptime Guarantee, users can also rest secure in the knowledge that Microsoft has them covered should any type of disaster recovery need occur. In the event of service interruption, Dynamics 365 includes some of the most robust disaster recovery capabilities in the business application market. Designed to help organizations recover from unexpected service outages, Microsoft's recovery protocols involve storing a synchronized, duplicate copy of company data on a second server, allowing users to continue their work with minimal disruption.

This recovery procedure is performed either through network load balancing, which distributes traffic evenly across multiple servers and redistributes the load if a server is compromised. Backup servers can also be used to ensure continued operation if the primary server fails. Dynamics 365 offers SQL mirroring, which places a copy of your database on an alternate server that can be brought online in the event of a disaster.

Data backup should be mandatory for businesses. But this is one of those tasks that often gets pushed into the background. Deploying in the cloud not only eliminates the need for users to secure their own servers, but also provides automatic data backup.

Cloud users can scale the size and scope of their Dynamics 365 solution at any time. With on-premises software, business growth often means investing in new servers and processors to handle increased workloads. With cloud software, customers pay for the ability to use the software rather than the processing power or space to run it, so adding or removing users or even applications is as simple as submitting a service request.


Still have questions?

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