Microsoft Dynamics 365, PowerApps and Flow Pricing Restructure coming October 2019

By 10th September 2019 September 12th, 2019 Product Updates

Microsoft has recently announced its intentions to change Dynamics 365, PowerApps and Flow pricing structures; removing all plans and tiering, which will affect new plans and annual anniversaries from October 1st, 2019.

Strategy 365 is a Microsoft Silver Partner specialising in the implementation of Dynamics 365 Customer Engagement. In this blog, we aim to explain the details surrounding the changes; the impact, the benefits and how businesses can make the changes work in their favour. This will include help and support for current and future customers in understanding the myriad of options available pre and post-October.

Why is Dynamics 365, PowerApps and Flow pricing changing?

Microsoft products are constantly evolving, and the cloud-based systems allow for any improvements to take effect immediately. Microsoft’s product improvements are driven by customer feedback, which is great as customers are made part of the product development team; demonstrating excellent practice. Ultimately, Microsoft know what they are doing, and in the long-run, the new pricing structures will make choices easier, enabling more flexibility for businesses to grow and adapt.

However, we also understand that with change also comes uncertainty, confusion and frustration for businesses while they try to understand the main differences.

During the transition period, we will endeavour to support our customers and businesses currently weighing up the options available to them both before and after October 2019. It’s all about being aware of what is coming and how businesses can take advantage of the changes, and also taking stock of exactly how they are using the applications. Sometimes even downgrading may be the best option for a customer and we are not afraid to advise that course of action, as we always put customers’ needs first.

How is Dynamics 365 licensing changing?

From October 1st, 2019, the traditional Dynamics 365, Customer Engagement and Unified Operations Plan licences will no longer be available for purchase. Instead, two new types of licence – Base and Attach, will be introduced. The image below illustrates the pricing breakdown for the two types (US prices are displayed, but UK prices will soon follow) –

Base and Attach Licence Table

For each Dynamics 365 user within your organisation, you would initially purchase a base licence for the application they require. Then, for the users who require more than one application, you would purchase an additional Attach licence. For example, for a user who requires both Sales and Customer Service Enterprise functionality, you would subscribe them to the Sales Enterprise Base licence and then add a Customer Service Attach licence. In dollars, this would be $95 + $20 = $115 per month. When subscribing a user to both a Base and Attach licence, the Base licence must be the higher-priced of the two applications.

How is PowerApps and Flow licensing changing?

From October 1st, 2019, new per-user and per-app licences will be introduced for PowerApps, replacing the existing P1 and P2 plans. There will be a transition period for customers who are already on these existing plans, allowing them to continue using them until the end of their current subscription period and, depending on the subscription end date, may be eligible to renew under their existing arrangement. Should you need clarity on this aspect, we would recommend you getting in touch with us.

The new PowerApps and Flow plans are (UK pricing will be announced in due course) –

  • PowerApps per app plan – allows users to run applications (two apps and one portal) for a specific business scenario utilising the full capabilities of PowerApps for $10 per user, per month.
  • PowerApps per user plan – equips a user to run unlimited applications (within service limits) utilising the full capabilities of PowerApps for $40 per user, per month.
  • Microsoft Flow per user plan – allows a user to run unlimited flows (within service limits) utilising the full capabilities of Microsoft Flow for $15 per user, per month.
  • Microsoft Flow per flow plan – enables an organisation to implement flows with reserved capacity that serve teams, departments, or the entire organisation without having to license each user. This plan starts at $500 per month for five flows.

Issues addressed with the standalone PowerApps and Flow plan changes

Microsoft’s reasoning behind the changes are to overcome issues with standalone PowerApps and Flow Plans, and therefore it will:

  1. Be easier to get started with a single use case. Before rolling out the full platform for all users, many customers want to be able to implement a single PowerApp or Flow scenario.
  2. Make licensing easier to understand. Simplify the feature-level differences that existed between P1 and P2 plans.
  3. Clarify how external users will be licensed. Microsoft have recently released PowerApps Portals for external users. Customers understandably want to know how licensing will work for these as they explore the preview.
  4. PowerApps plans – New and renewing customers will have the flexibility to choose PowerApps per app or per user plans.
  5. Offer Flow per-user and per-business plan options.

Further reading is available here –

Will the changes benefit Microsoft Dynamics 365 users?

As we are always honest in our approach we would have to say at this stage it is difficult to say. Microsoft recognises the need for software that aligns to many organisations’ functional roles and scenarios and alongside this the ability to add or remove applications as businesses grow and change. The new licensing model will allow customers to purchase exactly what they need, and applications can be easily mixed and matched to align with the customer’s specific requirements.

Microsoft’s overview and further information on Dynamics 365, PowerApps and Flow updates can be found here.

Will there be other changes to Microsoft Dynamics 365 plans and charges from October 2019?

The most salient points regarding the changes are outlined below:

  1. PowerApps and Flow will continue to be part of the Office 365 package. The changes will affect standalone paid plans to access features such as premium connectors and CDS.
  2. Those subscribing to Plan 1 (or P1 licences) will be able to continue to use the plans for the life of their agreement. There will be no immediate changes to pricing plans for current customers will be able to renew PowerApps P1 licences until 31st March 2020.
  3. The new standalone PowerApps plans will still include all Flow capabilities triggered by apps (or the data those apps use) – however, it will not include the ability to run standalone Flows that use premium features.
  4. Businesses with three or more applications will see an increase, however those with one or two applications may not see any change to their pricing.
  5. Those subscribing to PowerApps via Dynamics 365 licensing (rather than a standalone licence) will continue to receive PowerApps as part of Dynamics 365.

Guidance for businesses considering implementing Microsoft Dynamics 365 before October 2019

Businesses currently considering implementing Dynamics 365 are encouraged to contact Strategy 365 for advice. New users should consider the advantage of signing up before October 2019 to keep current pricing levels until September 2020 – especially if they want to benefit from lower costs for running multiple applications, run standalone premium Flows and continue to receive PowerApps as part of Dynamics 365 for another year.

What action do we recommend, considering the future changes?

We recommend that all current users and new Dynamics 365 and PowerApps users speak to us to discuss how the changes will affect their business. We understand the inconvenience change can bring and the need for easy, cost-efficient transitions. Therefore, we are always available for conversations, both with current customers and other users of Dynamics 365, to discuss any impact the changes will have on their business and its end users.

Strategy 365 customers will see changes to their licence invoices for any anniversaries post-October 2019; however they will receive full support and communications of anniversaries in due course. For more information, contact Strategy 365 or telephone 01782 916920 and we will be happy to assist.