Table of Contents
Introduction
What's New in the 2025 Dynamics 365 Licensing Guide?
| Dynamics 365 Product | New Offer or Change |
|---|---|
|
Customer Service Premium |
Dynamics 365 Customer Voice removed from Customer Service Premium |
|
Sales Premium |
Sales Premium added to the Capacity license table |
These updates align with Microsoft’s evolving licensing strategy, ensuring businesses can leverage the latest AI-driven capabilities, automation tools, and enhanced customer engagement solutions while optimizing costs.
With Dynamics 365, businesses can license applications individually or as a suite, allowing for flexibility in deployment. Organizations can start with a single solution and expand as their needs evolve. Current Dynamics 365 licensing framework ensures scalability, cost-efficiency, and seamless integration across different Microsoft services.
This guide outlines licensing models, pricing structures, and key considerations for:
Business Central (ERP):
- Licensing tiers: Essentials vs. Premium
- User-based pricing model
- Attach options for Customer Service, Sales, and Field Service
Power Platform:
- Power Apps: Per-user & per-app licensing
- Power Automate: User-based & tenant-based licensing (per-flow pricing)
- Power BI: Free, Pro, and Premium licensing models
Customer Suite:
- Customer Service: Professional, Enterprise, and Premium
- Contact Center: Digital, Voice, and Omnichannel options
- Customer Insights: Data vs. Journeys licensing options
Operations & Field Solutions:
- Project Operations: Base vs. Attach licenses
- Field Service: User & device-based licensing
AI & Analytics Solutions:
- Microsoft Fabric: Licensing model overview
- Copilot AI Features: Licensing for automation & AI-driven insights
Note: Refer to the official Product and Licensing Terms for additional details on Microsoft’s licensing policies.
Understanding Dynamics 365 License Types & Models
Microsoft Dynamics 365 applications are licensed through subscription-based models, offering flexibility for organizations of all sizes. Dynamic 365 license types include user-based, device-based, and tenant-based models, allowing businesses to tailor their licensing strategy to specific operational needs.
1. User Licenses:
User licenses grant named individuals access to specific Dynamics 365 applications. These licenses are assigned per user, allowing access from multiple devices but restricting use to the designated individual.
- Full User Licenses: Required for employees who need full access to the core functionality of a Dynamics 365 application (e.g., Business Central, Customer Service, Project Operations).
- Attach Licenses: Discounted licenses are available when a user already holds a qualifying base license. For example, a user with Business Central Premium can add a Customer Service Enterprise attach license at a reduced rate.
- Team Member Licenses: Designed for employees who need light access to Dynamics 365 applications, such as viewing reports, entering timesheets, or updating customer records.
- Operations & Activity Licenses: These licenses provide limited operational capabilities for users who do not require full system access but perform essential business activities.
2. Device Licenses:
Device licenses allow multiple users to access a shared workstation or terminal. This model is particularly useful for scenarios where multiple employees share a device, such as in retail stores, warehouses, or field operations.
- Dedicated Device License: A device-based license tied to a single shared workstation, allowing multiple users to log in without requiring individual user licenses.
- Field Service Device License: This license allows a shared device to be used for order management, inventory tracking, and service scheduling in field operations.
3. Tenant Licenses:
Tenant-based licenses provide organization-wide access to specific services without assigning them to individual users or devices. These are typically used for capacity-based workloads, such as customer data storage, AI-driven analytics, or workflow automation.
- Customer Insights: Licensed per tenant, unlimited users can leverage customer data analysis capabilities.
- Power Automate Capacity Licenses: Enable automation flows across an entire organization without requiring per-user licensing.
- Microsoft Fabric: Provides AI-powered data analytics at the tenant level, offering flexible storage and processing power.
4. Licensing Strategies: Base and Attach Model:
For businesses using multiple Dynamics 365 applications, Microsoft offers a Base and Attach licensing structure to optimize costs.
- Base License: The first full Dynamics 365 application a user purchases must be the highest-priced license.
- Attach License: Users can add other Dynamics 365 applications at a lower cost once a base license is purchased. Attach licenses provide full functionality but depend on an active base license.
Example:
A Project Manager using Project Operations ($120/user/month) as their base license can add Customer Service Enterprise ($20/user/month) instead of purchasing it at full price ($95/user/month).
Base applications and their qualifying products for attach licensing:
5. Additional Licensing Considerations:
- Minimum Purchase Requirements: Some applications, such as Dynamics 365 Customer Insights, require a minimum purchase of 10 user licenses.
- Multiplexing Rules: Indirect access through APIs, bots, or automation tools does not reduce the number of required licenses. Each user who accesses Dynamics 365 data must be properly licensed.
- Dual Use Rights: Some licenses provide the right to run on-premises versions alongside cloud-based services, ensuring flexibility for businesses with hybrid environments.
By understanding the Dynamics 365 license types and structure, businesses can make informed decisions that align with their budget and operational requirements.
Unsure Which Dynamics 365 Licenses Are Right for You?
Navigating the complexities of Dynamics 365 licensing can be challenging. Avoid overspending on unnecessary features or underutilizing powerful tools. Our experts can analyze your specific business needs and provide a tailored licensing strategy that maximizes your ROI.
Request a ConsultationDynamics 365 Business Central Licensing
Built on cloud-first architecture, Dynamics 365 Business Central is a comprehensive ERP solution designed to help small and medium-sized businesses (SMBs).
Business Central is available in two licensing tiers, Essentials and Premium, each offering different levels of functionality. The licensing model follows a user-based subscription structure, with options for attach licenses combined with other Dynamics 365 applications.
1. Licensing Tiers: Essentials vs. Premium
Business Central offers two user-based licensing tiers to accommodate different business needs:
Business Central Essentials:
Essentials provides core ERP capabilities that support financial management, supply chain operations, customer relationship management, and basic project management.
Key capabilities include:
- Financial Management – General ledger, accounts payable/receivable, budgeting, multi-currency support.
- Supply Chain Management – Purchasing, inventory tracking, warehouse management.
- Project Management – Job costing, resource allocation, time tracking.
- Sales & Customer Relationship Management – Contact management, opportunity tracking, sales forecasting.
- Human Resources – Employee record management.
- E-Services – Document management, bank feeds, integration with Power BI.
This tier is ideal for businesses looking for core financial and operational capabilities without advanced manufacturing or service management needs.
Business Central Premium:
Premium includes all features of Essentials, with additional functionality for service order management and manufacturing.
Additional capabilities include:
- Manufacturing: Production planning, bill of materials, demand forecasting.
- Service Order Management: Service contracts, repair tracking, service dispatch.
This tier is designed for businesses with manufacturing operations or service-based workflows requiring advanced production and service order capabilities.
2. User-Based Licensing Model:
Business Central is licensed per user, meaning each named user must have a valid subscription. There are no device-based licenses for Business Central.
- Full Users: Employees who need complete access to Business Central functionality (e.g., finance teams, supply chain managers, service operators) must be licensed under Essentials or Premium.
- Business Central Team Members: A more affordable option for light users who require read-only access, the ability to enter time/expenses, or make minor updates but do not perform full transactions.
Important Notes:
- Business Central does not allow mixed deployments of Essentials and Premium users within the same environmentally full users, who must be on the same licensing tier.
- Business Central licenses are not included in Dynamics 365 Customer Engagement plans; they must be purchased separately.
3. Attach Licensing Options:
Organizations using multiple Dynamics 365 applications can use attach licenses, which provide cost-effective pricing when Business Central is combined with other solutions.
Attach pricing eligibility: Users who license Business Central Premium as their base license can add the following at a discounted attach price:
- Customer Service Enterprise
- Field Service
- Sales Enterprise
For example, a company using Business Central Premium ($100/user/month) can add Customer Service Enterprise at an additional $20/user/month instead of purchasing it at the full standalone price.
Power Platform Licensing
Microsoft Power Platform is a suite of low-code/no-code tools that enable businesses to build applications, automate workflows, analyze data, and create intelligent virtual agents. It consists of:
- Power Apps – Custom application development
- Power Automate – Workflow automation and process orchestration
- Power BI – Business intelligence and data analytics
Each component has a distinct licensing model, with options for individual users, organization-wide deployments, and consumption-based pricing.
1. Power Apps Licensing:
Power Apps allows users to create custom business applications without extensive coding knowledge. Organizations can choose between per-user licensing (for frequent app users) or per-app licensing (for targeted solutions).
Power Apps Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Power Apps Per User |
Grants access to unlimited custom apps within an environment. |
Users who need full access to multiple Power Apps. |
|
Power Apps Per App |
Provides access to a single app (or one portal) per user. |
Users who need occasional access to a specific app. |
Additional Considerations:
- Power Apps require Dataverse storage; organizations may need to purchase additional capacity.
- AI Builder add-ons are available for AI-powered automation and analytics.
- Users accessing Power Apps embedded within Dynamics 365 applications do not require a separate Power Apps license.
2. Power Automate Licensing:
Power Automate allows organizations to automate workflows, integrate apps, and streamline business processes. Licensing is available for individual users, tenant-wide deployments, or per-flow pricing.
For more information read: How to Maximize Your Power Automate Licenses.
Power Automate Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Per User Plan |
Grants a single user the ability to run unlimited workflows. |
Individuals automating personal workflows. |
|
Per User with Attended RPA |
Includes Robotic Process Automation (RPA) for automating manual tasks with AI capabilities. |
Users who need bot-driven automation. |
|
Per Flow Plan |
Enables an organization to license a specific workflow, regardless of the number of users. |
Businesses automating key processes at scale. |
Additional Considerations:
- Power Automate flows can be cloud-based or desktop-based (RPA).
- AI-powered process mining and optimization require separate add-ons.
- Power Automate for Teams offers limited functionality at no extra cost for users with Microsoft 365 licenses.
3. Power BI Licensing:
Power BI is Microsoft’s business intelligence and analytics platform, enabling organizations to visualize data, build interactive reports, and share insights across teams. It has three main licensing options:
Bonus read: Understanding Power BI Licensing.
Power BI Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Power BI Free |
Provides basic reporting and self-service analytics. |
Individual users create personal dashboards. |
|
Power BI Pro |
Allows users to share and collaborate on reports. |
Teams that need secure data sharing and real-time collaboration. |
|
Power BI Premium |
Adds enterprise-level data capacity, AI-driven insights, and on-premises reporting. |
Adds enterprise-level data capacity, AI-driven insights, and on-premises reporting. |
Additional Considerations:
- Power BI Pro is required for users who need to share reports externally.
- Power BI Premium includes dataflows, AI-powered analytics, and paginated reports.
- Premium is available as per-user or per-capacity (tenant-wide).
Dynamics 365 Customer Suite Licensing
The Dynamics 365 customer suite provides businesses with business apps to enhance customer relationships, streamline service operations, and gain deep insights into customer interactions. It includes:
- Customer Service – Case management, AI-powered assistance, and omnichannel support
- Contact Center – Digital and voice-based customer communication solutions
- Customer Insights – AI-driven customer data unification and engagement analytics
Each application is licensed per user, device, or tenant, with different tiers and add-ons to fit various business needs.
1. Customer Service Licensing:
Dynamics 365 Customer Service enables organizations to deliver personalized, efficient, and AI-assisted support across multiple channels. It is available in three editions:
| Edition | Description | Best For |
|---|---|---|
|
Customer Service Professional |
Essential case management and knowledge base features. |
Small to mid-sized businesses with standard customer support needs. |
|
Customer Service Enterprise |
Advanced automation, AI-driven insights, and omnichannel capabilities. |
Organizations need intelligent case routing, SLA management, and AI assistance. |
|
Customer Service Premium |
Includes Enterprise + Contact Center for digital & voice support. |
Large enterprises with end-to-end customer engagement requirements. |
Customer Service Key Features by Edition:
Additional Considerations:
- Device Licensing: Customer Service Enterprise is also available with a Device license, allowing shared access in call centers or help desks.
- Unified Routing: Available with Enterprise and Premium editions for AI-based case routing.
- Customer Service Premium includes Contact Center features, making it a complete CRM + call center solution.
2. Contact Center Licensing:
Dynamics 365 Contact Center is a Copilot-first, AI-powered customer communication platform designed for digital and voice engagement.
Contact Center Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Contact Center Digital |
Supports chat, messaging, and social media interactions. |
Businesses handling digital-first customer interactions. |
|
Contact Center Voice |
Adds native telephony support with call transcription & analytics. |
Organizations needing voice-based customer support. |
|
Contact Center (Digital + Voice) |
Combines all digital and voice capabilities in one solution. |
Businesses needing end-to-end omnichannel customer engagement. |
Additional Considerations:
- Contact Center requires Power Platform AI for advanced Copilot AI-driven interactions.
- Organizations can purchase additional AI minutes and call intelligence add-ons.
3. Customer Insights Licensing:
Dynamics 365 Customer Insights is a customer data platform (CDP) that unifies, analyzes, and enhances customer interactions. It is available in two applications:
Customer Insights Licensing Models:
| Edition | Description | Best For |
|---|---|---|
|
Customer Insights – Data |
Collects, unifies, and enriches customer profiles across sources. |
Businesses that need AI-driven customer segmentation and analytics. |
|
Customer Insights – Journeys |
Automates personalized marketing campaigns and outreach. |
Organizations focused on real-time customer engagement and campaigns. |
Additional Considerations:
- Base Licensing includes 10K Interacted People (Journeys) and 100K Unified People (Data).
- Attach Pricing: Discounted for customers with 10+ Dynamics 365 Enterprise licenses.
Future-Proof Your Business with the Latest Dynamics 365 Licensing Insights
With Microsoft continuously updating Dynamics 365, staying informed is crucial. Ensure your organization is prepared for the evolving landscape and leverages the latest features without compliance risks. Let us help you understand the impact of 2025 licensing changes on your business.
Request a ConsultationOperations & Field Solutions
Microsoft Dynamics 365 provides powerful operations and field service solutions that efficiently help businesses manage projects, field workforce, and service operations. These solutions include:
- Dynamics 365 Project Operations: Connects sales, project management, and finance teams for seamless execution.
- Dynamics 365 Field Service: Optimizes work order scheduling, remote assistance, and service management.
Both solutions follow a user-based licensing model, with additional device-based licensing available for Field Service.
1. Project Operations Licensing:
Dynamics 365 Project Operations enables businesses to manage the entire project lifecycle, from sales and resource planning to project execution and invoicing.
Project Operations Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Project Operations (Base License) |
Full access to sales, project management, and financials. |
Project managers, accountants, and administrators. |
|
Project Operations Attach License |
Discounted license for users with an existing base Dynamics 365 license. |
Businesses using multiple Dynamics 365 applications. |
|
Team Members License |
Limited access for users who need to submit timesheets, expenses, and approvals. |
Consultants, team members, and support staff. |
Additional Considerations:
- Project Operations is licensed per user, with a minimum number of users required.
- Users who only create and approve timesheets can be licensed under the Team Members plan.
- Project Operations cannot be combined with Sales Professional licenses in the same environment.
2. Field Service Licensing:
Field Service Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Field Service User License |
Full access to work order management, scheduling, and inventory tracking. |
Field technicians, dispatchers, and service managers. |
|
Field Service Device License |
Shared device access with full functionality. |
Teams sharing a single device in warehouses or field locations. |
|
Field Service Contractor License |
Limited access for non-employee contractors to manage work orders. |
External service providers working on customer sites. |
Additional Considerations:
- Contractor Licenses require a full Field Service license in the organization.
- Field Service includes access to Microsoft Teams for service collaboration.
AI & Analytics Solutions
1. Microsoft Fabric Licensing:
Fabric Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Fabric Per User (Pro & Premium) |
Provides access to dataflows, lakehouses, and analytics. |
Individual users analyzing and visualizing data. |
|
Fabric Capacity (Tenant-Based) |
Organization-wide analytics and AI-powered data services. |
Enterprises requiring scalable data storage and AI insights. |
Additional Considerations:
- Fabric includes Power BI Premium capabilities, allowing seamless integration with Power Platform.
- AI-powered Data Activator & Real-Time Intelligence features require Fabric Premium licensing.
2. Copilot AI Licensing:
Further read: Guide to Microsoft Copilot Pricing & Licensing.
Copilot Licensing Models:
| License Type | Description | Best For |
|---|---|---|
|
Copilot for Dynamics 365 (Per User) |
AI-powered assistance for Sales, Customer Service, and Finance. |
Business users looking to automate data entry and insights. |
|
Copilot for Service (Tenant-Based) |
AI-driven chatbots and virtual agents for contact centers. |
Enterprises requiring automated customer support. |
Additional Considerations:
- Copilot features are included in Sales Premium, Customer Service, and Finance licenses.
- Additional Copilot AI capacity can be purchased separately for enhanced automation.
Let Us Make Your Licensing Decisions Easier
Don't let licensing complexities hinder your digital transformation. Our Dynamics 365 specialists can simplify your licensing decisions, ensuring you have the right tools to drive efficiency, enhance customer engagement, and achieve your business goals.
Request a ConsultationConclusion
As Microsoft continues to enhance Dynamics 365 with AI-powered automation, analytics, and customer engagement tools, staying up to date with the latest Dynamics licensing guide is crucial. Businesses should evaluate their licensing needs regularly to take advantage of new offers, cost-saving attach licenses, and AI-driven capabilities.
For further details, always refer to official Microsoft resources or consult a Dynamics 365 partner before making licensing decisions. By leveraging the right Dynamics 365 licensing strategy, organizations can confidently drive efficiency, scalability, and digital transformation.
Licensing FAQs
1. How do I choose between a Base License and an Attach License?
- A Base License is required for a user’s first Dynamics 365 application and must be the highest-priced license.
- An Attach License is a discounted add-on that can be used only by users who already hold a Base License.
Example: If a user purchases Project Operations ($120/user/month) as a base license, they can attach Customer Service Enterprise ($20/user/month) instead of paying the full price for both.
2. Can I mix Business Central Essentials and Premium users?
No, all Business Central users in the same environment must be on either Essentials or Premium, but not both.
3. Do I need a Power BI Pro license to share reports?
Yes, users who need to share reports and dashboards externally must have Power BI Pro or Power BI Premium licensing.
4. How does licensing work for Microsoft Copilot AI?
Certain Dynamics 365 applications, such as Sales Premium, Customer Service, and Finance, include Copilot AI features. Additional AI capacity can be purchased as an add-on.
5. Are external users covered under Dynamics 365 licensing?
6. What is the minimum purchase requirement for Dynamics 365 Customer Insights?
7. How does Field Service licensing work for contractors?
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