Microsoft Dynamics 365 won't come cheap, leaked details suggest

The way it looks now, you'll want to go with the bundle pricing

Microsoft's Dynamics 365 cloud software may be a better deal as a bundle.
Credit: James Niccolai

Microsoft's upcoming Dynamics 365 cloud software promises a one-stop shop for ERP and CRM, but its modular convenience could come at a considerable cost, with strong incentives to sign up for bundle pricing.

So suggests a blog post published Monday but since taken down by Microsoft partner Encore Business Solutions. The blog post outlined how pricing and licensing will work for the new enterprise software. (A cached version of the post is still online.)

"Microsoft Dynamics 365 represents a re-thinking of how Microsoft approaches the licensing and pricing of its cloud and enterprise software," wrote Trevor Molag, a marketing specialist with the firm. "While Microsoft claims that pricing is simplified for Dynamics 365, any new approach will take some getting used to."

Customers will begin by choosing between two versions of Dynamics 365: one for large enterprises, and one for businesses with fewer than 250 employees. Based on that choice, they'll get to choose from among a set of individual modules.

For the enterprise version, there will be modules for operations, field service, project service, marketing, sales, and customer service, Molag said. For the business edition, there are just three: financials, sales, and marketing.

Depending on what your users need, you can buy access to just one of those modules or several. Companies that need more than one, however, will find it could make a lot of sense to opt for a bundled plan.

Whereas pricing on the individual enterprise modules ranges from $95 to $190 per user per month, for instance, two bundled plans offer pricing of $115 or $210 per user per month, according to Encore. The latter plan includes all the modules; the former excludes only operations.

For smaller businesses, individual modules will be priced at $40 per user per month, while a bundled plan provides full access to all of them for just $10 more per user per month.

Encore says the prices it lists are just estimates, and will ultimately vary based on market, purchase plan, or discounts.

Microsoft, meanwhile, said only this: "We are not sharing specific pricing or licensing details at this time, and aren’t commenting on speculation."

But if the numbers are close to what Microsoft eventually settles on, they're "definitely on the high side," said Frank Scavo, president of IT consulting firm Strativa, "especially if you are looking for complete ERP functionality, including operations."

In the past, Microsoft has been willing to compete on price with competitors like Salesforce.com, but "the pricing here certainly doesn’t make Microsoft look like the low-cost leader," Scavo said via email.

That said, "we don’t know what kind of discounting Microsoft will allow partners to offer, and we don’t know how deals will be priced for customers under a volume licensing agreement," he added.

Still, one of Dynamics 365's key benefits is that it unbundles functionality, allowing customers to mix and match modules as they wish, Scavo noted. As uncovered so far, however, its pricing is structured in the opposite direction.

"The unbundling is more to allow customers to implement modules in any sequence they wish, while still encouraging them to buy more modules," he said. "I expect that Microsoft will provide more details during its upcoming Ignite conference in Atlanta."

To comment on this article and other CIO content, visit us on Facebook, LinkedIn or Twitter.
Download the CIO October 2016 Digital Magazine
Notice to our Readers
We're now using social media to take your comments and feedback. Learn more about this here.