Demystifying Microsoft Dynamics 365 Pricing

Dynamics 365 Pricing can be very confusing if you are not familiar with it. At Sabre, we’ve been working with the Microsoft Dynamics product line for a long time. The intent of this blog is to help demystify Dynamics 365 Pricing, whether it be for Business Central, Sales, Customer Service, or Finance and Operations.

In addition to the price of the software, companies need to be aware of other costs like: Support contracts with the training provider; Addon modules that are considered critical; Supplementary products that add a lot of value.

All of these need to be considered part of the analysis of Dynamics 365 Pricing.

What are Dynamics 365 Implementation and License Costs?

Microsoft is constantly reworking and changing the pricing and even the names of their different Dynamics products. This has been going on for some time, and frankly leads to confusion. In this article, I am going to try and give you both examples of the cost of the software and also what you should budget for your implementation for different scenarios. I will focus on Manufacturing or Distribution oriented costs as that is my area of expertise.

At Sabre, we specialize in Business Central and Dynamics 365 Sales (aka CRM). As such the estimated budgets for those products are going to be a lot better than the budgets I give for other products. Even so, you should be able to walk away from this article with a good sense of the budget you will need, as a business, to implement.

For more information, you can visit the Dynamics 365 Pricing official page and (most important) download the Microsoft Dynamics 365 License Guide. I’m going to focus on US Pricing as US buyers are going to be the most common buyer of Dynamics. For Canadian Dynamics 365 pricing you can look at the Microsoft Canada Dynamics 365 pricing page and multiply the implementation costs by 1.25 as an approximation.

Dynamics 365 Products Renamed

It can be hard to keep up with the changes to Microsoft Dynamics products. This table might help understand how Microsoft has renamed the products since the introduction of the D365 brand.

Definitions related to Dynamics 365 Pricing

Here are some important definitions used below:

• Named User: This is the only way Microsoft Dynamics 365 user licenses are offered (with some minor exceptions). Think of a Named User as being a license for each email address of users who use the software. Generally this is each person with access.
• Device User: This is the exception to the named user. Device users are generally for operating a barcode scanner in a warehouse, a POS device in retail, or a time keeping device in a manufacturing shop. I won’t list these except as part of AppSource costs.
• Full User: A full user has the most access to read and write data in the software. Full Users are sometimes attached to the module (a Full Finance user) and sometimes to the product (a Full Business Central user).
• Team Member: All Dynamics products offer a very inexpensive “Team Member” user. In this way Dynamics 365 Pricing is better than some competitors who do not offer this “light” user. Team Members can read all information in the product, and can edit and write limited amounts. Where possible I’ll give some examples.
• ERP: Enterprise Resource Planning. An all-in-one software product designed to manage all aspects of a business. This is the apex predator of software.
• CRM: Customer Relationship Management. Microsoft CRM was renamed Dynamics 365 Sales and Customer Service and split into 2 licenses about 4 years ago.
• Small and Medium Business (SMB): In Microsoft Terms, a business with under 250 computers (this is debatable but as a general rule is pretty good).
• Enterprise: In Microsoft Terms, a business with 251 or more computers.
• Microsoft AppSource: Microsoft AppSource is an app store where customers of Dynamics 365 products can select addons.
• Support: Although Dynamics 365 is supported by Microsoft, that support does not include consulting or training support. I will estimate support (below) based on what Sabre would charge. Some products might also require inhouse staff to manage – so this will double for that purpose.
• Attach License: Some products (like Business Central and Sales Professional) can be “attached” to each other to create a larger license at a discount price. The Attach License must be combined with an existing license assigned to a user. So Joe@company.com who already has a Full user license of one product, can “Attach” a lower cost Full user license of a 2nd associated product.

Dynamics 365 Products We Analyze

Customer Engagement

Dynamics 365 Customer Engagement is (usually) referring to the Sales and Customer Service modules. If you had these two products it would basically reproduce the old CRM Online product. These products come in an Enterprise and Professional level. I give examples of the pricing of these products below.

Business Central

This used to be the Microsoft Dynamics NAV product. Manufacturing Dynamics 365 Business Central has two “levels” of product; Essentials and Premium. These are described in more detail below. We believe that Microsoft is investing very heavily in Business, and so far it is a winner among cloud ERP! It is one of the most rapidly growing products in the entire Microsoft portfolio and is often bundled with Office 365.

Business Central is a Small and Medium Business (SMB) class ERP product.

Finance, Operations (and Human Resources, Commerce)

Dynamics 365 Pricing gets really complicated once you get to the Finance and Operations product. This is the Microsoft Enterprise-class ERP product.

We know a lot about the implementation and costs of Finance and Operations. The complexity of the pricing requires examples in order to make it clear.

Dynamics 365 Pricing we won’t address

These products are less common in the market and not something Sabre is comfortable commenting on.

Field Service

The Field Service product is technically related to the Dynamics 365 Sales and Customer Service Enterprise modules and does not have Professional level pricing (which is why it is separated out). The pricing is basically the same ($95 for a full user, $20 attach licenses).

Marketing

Dynamics 365 Marketing is a product that competes against Hubspot and Marketo (as some examples) and unlike the others is licensed by site – meaning your entire business pays one price regardless of the user count.

We have no experience implementing the product, so we’ll have to defer to some other blog writer. I will give you a little bit of my best guess as to what you should expect, at a minimum so you can understand if this product is for you.

The pricing starts at $1500 per month per site and can be attached for $750 where your licenses exceed a threshold. Implementations are pricy (but I don’t feel confident pricing it out).

Many Others

And there are many other products we won’t touch on here. There are almost too many choices within Dynamics 365 pricing to keep track of.

Microsoft Dynamics 365 Implementation Cost

I am going to give a budget for implementations. It’s a bit hard to estimate the implementation budget for some products, very easy for others. There are 2 types of implementations in the market. If I mention an implementation is based on “market rate” or “market price,” it is the time and material type and based on my understanding of “cheap” implementations of this type.

• Fixed fee: Very uncommon. A few partners (like Sabre) will offer a true fixed fee implementation, but not many.
• Time and Material: Very common. Most partners offer these types of projects.

If there is some kind of limit to the number of hours offered in a quote, then it is a Time and Material quote.

For Example: A Sabre Fixed fee has no cap on the hours that a project can take. If it takes 150 or 250 hours – it is the same price (notwithstanding monthly support and software costs). A quote that says that it is fixed at $15,000 and includes 80 hours is not a fixed fee – it is a block of time.

Be cautious when getting a quote and make sure you compare apples to apples.

Dynamics 365 Sales or Customer Service (CRM)

Sabre does work closely with customers who have Dynamics 365 Sales and/or Customer Service (more often the Sales product to be frank since it has basic Customer Service capabilities). Dynamics 365 pricing for these products come in two levels, Enterprise and Professional.

The Enterprise products are significantly more full-featured, and have no effective limits on the ability to customize them. The Professional Products have a sub-set of Enterprise capabilities. They are much more limited in terms of being customizable. Sabre is more focused on the Professional Level as we generally prefer to work where there are not excessive levels of customization.

Within Dynamics 365 Pricing there are two other CRM products: Dynamics 365 Sales Premium which is Dynamics 365 Sales Enterprise with the Sales Insights Add-In; Dynamics 365 Relationship Sales which is Dynamics 365 Sales Enterprise bundled with LinkedIn Sales Navigator; and we note that both these products are beyond the scope of this document.

Some minimum user levels apply to the Premium and Relationship Sales modules.

Sales and Customer Service Dynamics 365 Pricing

• Professional: $65 per month per Named Full User.
• Enterprise: $95 per month per Named Full User.
• Premium: $135 per month per Named Full User.
• Relationship Sales: $162 per month per Named Full User.
• Attach Licenses: $20 for Business Central, Finance and Operations, Sales, Customer Service etc… (Enterprise licenses cannot be attached to Business Central as of this writing).
• AppSource Apps: Prices Vary
• Support: Around $30 per user per month

For example; a company with 3 sales users looking to implement basic sales opportunity tracking with Sales Professional might look something like this:

• 3 x $65 Sales professional Users = $195 monthly
• Add: $150 per month for support
• Implementation: $4,000 (based on Sabre fixed fee)

A company with 10 full users looking to implement sales opportunity, sales quotes, orders, invoices with a price catalog with Sales Professional with the basic Customer Service in Sales.

• 10 x $65 Sales Users = $650 monthly
• Add: $300 Support
• Implementation: $10,000 (based on Sabre fixed fee)

A company with 40 full users that want to make customizations to support a special business need, will have 15 pure Sales users, 15 pure Customer Service users, and 10 users who are both. Will also have 40 more users who access the customizations primarily.

• 25 x $95 Sales Enterprise Users, 25 x $20 Attach Customer Service, 15 x $95 Customer Service, 40 x $8 Team Members = $4,620 monthly
• Add: $1,200 Support
• Implementation: $40,000-100,000 (based on market prices)

Business Central (ERP)

Business Central licenses are actually one of the simpler to understand. Of the Dynamics 365 pricing rules, there are not many exceptions regarding Business Central. Business Central and Sales Professional (or Customer Service Professional) are considered to be part of the Small Business “Suite” of Dynamics 365 products. I’ll give examples of combinations below.

The Premium Product is basically Essentials plus production manufacturing modules and field service (field repairs or depot repairs and service) modules. For Manufacturing companies of a certain level of complexity, the Premium product is required, but very small companies can get by with Essentials and the Assembly modules.

Business Central Dynamics 365 Pricing

• Essentials: $70 per month per Named Full User.
• Premium: $100 per month per Named Full User.
• Attach Licenses: $20 for D365 Sales Professional and $20 for D365 Customer Service Professional
• AppSource Apps: Prices Vary
• Support: Around $60 per user per month (minimum of $300).

Business Central Manufacturing

Sabre is exceptionally good at implementing Dynamics 365 for SMB manufacturing. If you are a manufacturer and are smaller and simple, an Essentials license from Dynamics 365 pricing can work. Mid-size or above manufacturers will definitely need the Premium license of Business Central. We add the typical number of team members we find that customers want in the examples.

Examples:

For example; a company with 3 full users looking to implement inventory control, bills of material, purchasing automation and core accounting would receive a quote from Sabre of about $33,000 budget (plus or minus a bit).

• 3 x $70 Essentials Users, 3 x $8 Team Members = $280 monthly
• Add: $300 Support monthly
• Implementation: $33,000 (based on Sabre fixed fee)

A company with 15 full users looking to implement Inventory Management, Bills of Material, Production Scheduling, MRP, Job Costing, and core accounting would receive a fixed fee quote from Sabre of about $60,000-$85,000 budget (the range varies depending on the number of modules to be trained).

• 15 x $100 Premium Users, 10 x $8 Team Members = $1,580 monthly
• Add: $900 Support, $500 budget for Addons
• Implementation: $60,000-85,000 (based on Sabre fixed fee)

A company with 30 full users that is a full manufacturing company that wants a lot (not necessarily all) advanced functionality training should have a minimum budget (based on Sabre’s pricing) of about $105,000. In this scenario let’s say they also want 25 CRM users (15 inside people who also have a full Business Central license and 10 outside salespeople who just use CRM).

• 30 x $100 Premium Users, 20 x $8 Team Members, 15 x $20 Attach Licenses, 10 x $65 Sales Professional = $4,110 monthly
• Add: $1800 Support, $1000 budget for Addons
• Implementation: $105,000 (based on Sabre fixed fee)

Business Central Distribution or Non Durable Goods

At Sabre, we don’t many of these implementations (just distribution) so it’s a bit harder to estimate a price. This would be companies in areas such as pure distribution, professional service, not-for-profit, finance, government, health care, etc… With very few exceptions the Dynamics 365 pricing at the Business Central Essentials level is all that is needed.

• Essentials: $70 per month per Named Full User.
• Attach Licenses: $20 Dynamics 365 Sales Professional and Customer Service Professional
• AppSource Apps: Prices vary
• Support: Around $60 per user per month (minimum of $300).

Example Implementations:

A company with 3 full users looking to implement “Quickbooks” type functionality.

• 3 x $70 Essentials Users, 3 x $8 Team Members = $280 monthly
• Add: $300 Support monthly
• Implementation: $15,000 (based on market pricing)

A company with 10 full users looking to implement supply chain or project accounting type functionality (ie: either buy and sell with warehousing or project time tracking with revenue recognition). Often these projects expand beyond that level as they use addon products from Microsoft AppSource.

• 10 x $70 Essentials Users, 10 x $8 Team Members = $780 monthly
• Add: $600 Support monthly, $500 AppSource
• Implementation: $60,000 (based on market pricing)

A company with 50 full users looking for a complex suite of product features.

• 50 x $70 Essentials Users, 30 x $8 Team Members = $3,740 monthly
• Add: $3000 Support monthly
• Implementation: $200,000 (based on market pricing)

Dynamics 365 Finance and Operations (ERP)

Finance and Operations is the enterprise-class ERP system from Microsoft. That means that it is intended for businesses with 250 or more computers. That is not to say some businesses that are medium-sized won’t implement Finance and Operations. We do see it from time to time, but smaller businesses usually don’t have the budget for this product.

There are several products (all at the same or similar price level) that are part of this broader product suite in Dynamics 365 pricing:

• Finance: Accounting features and functions
• Supply Chain: Inventory management, Manufacturing, Distributions
• Commerce: Retail (online and brick and mortar)
• Human Resources: Staffing, Performance, Tracking, Compensation
• Project Operations: Project management, Resources, Costs

These 5 products are really under one umbrella. Once licensed for one product, adding any of the others is $30 per user per month through an Attach license. In addition, the Sales or Customer Service modules can use an Attach license at $20 per user.

Implementations for even “simple” Finance and Operations projects are unlikely to run less than $200,000. The product is much deeper in function and capability than Business Central (for instance) which makes the training more difficult. Partners who claim to implement Finance and Operations for much less than shown should demonstrate examples where they have been successful.

Dynamics 365 Pricing

• Finance, Supply Chain, Commerce: $180 per month per Named Full User.
• Human Resources, Project Operations: $120 per month per Named Full User.
• Attach Licenses: $20 for Sales, Customer Service
• Attach Licenses: $30 for Finance, Supply Chain, Commerce, Human Resources, Project Operations
• AppSource Apps: Prices Vary
• Support: Around $120 per user per month (either in-house or outsourced)

User Minimums for Dynamics 365 Pricing

In the past, there was a 20 user minimum for Dynamics 365 Finance and Operations pricing. I am going to assume this is still the case, as companies with fewer than 20 full users should not really be looking at the F&O product.

For example; A company with 20 full users, a combination of finance and supply chain looking to implement multi-location warehouse and distribution functions between about 5 different locations in 2 countries and 5 states or provinces.

• 10 x $180 Finance, 10 x $180 Supply Chain, 5 x $30 Supply Chain Attach licenses = $3,750 monthly
• Add: $2400 Support monthly, $1000 AppSource
• Implementation: $250,000 (based on market)

A company with 50 full users looking to implement human resources, manufacturing, and distribution at 2 locations (one manufacturing and one warehouse). In addition, 50 Sales and Customer Service Enterprise licenses will be required with 25 stand-alone sales, and 25 Customer Service for full users to use.

• 20 x $180 Finance users, 30 x $180 Supply Chain, 5 x $30 Human Resource attach, 10 x $30 Supply Chain attach, 25 x $95 Sales Enterprise, 25 x $20 Customer Service attach = $12,325 monthly
• Add: $7500 Support per month, $3000 AppSource
• Implementation: $500,000 (based on market)

Conclusion

Hopefully, this set of examples helps put into perspective the budgetary ranges for different Microsoft Dynamics 365 pricing examples. Sabre focuses on the Dynamics 365 Business Central, Sales and Customer Service products. We know enough about the Finance and Operations product suite to provide some ideas of the costs and budgets that you should be prepared for.

Business Central is going to cost about half the monthly operating cost and license costs, and about 1/3 or less the implementation costs as compared to Finance and Operations. Sales Professional and Customer Service Professional are, by their nature, lower in implementation cost than the Enterprise versions because they are usually selected when low customization and simple features are required. Enterprise is going to always be more complicated and costly if it is selected over Professional – because there is no reason to pick it except for advanced features that require advanced training.

Need some help?

Looking for pricing for Business Central or other Dynamics 365 products? You can find the current Microsoft Dynamics US Price List at Microsoft.com. If you need help with Microsoft Dynamics 365 pricing, especially trying to price implementations for Business Central or CRM, give us a call at: (519) 585-7524 or contact our team, we’re excited to talk with you soon!