Guide to the New D365 F&O Licensing

The Clock is Ticking: Your Definitive Guide to the New D365 F&O Licensing

If you manage a Dynamics 365 Finance & Operations (F&O) environment, it's time to pay close attention. Microsoft has fundamentally overhauled the licensing model, moving away from the long-standing 20-user minimum. This isn't just a minor tweak, it's a strategic shift that will impact your budget, compliance, and operational flexibility at your next renewal.

Ignoring this change is not an option. But with a proactive approach, you can turn this mandatory transition into a powerful cost-optimization opportunity.

This definitive guide will walk you through the new model, provide a detailed action plan for analysis, and even show you a sample cost breakdown so you can prepare for what's next.

The Big Change: From User Minimums to Base + Attach

Microsoft's goal is to unify the licensing experience across its entire Dynamics 365 portfolio. F&O is now aligning with the model used by Customer Engagement apps (Sales, Service, etc.) for years.

The Old Model: To license D365 Finance, SCM, Commerce, or Project Operations, you were required to purchase a minimum of 20 full user licenses of a single "base" application. This often meant paying for shelf-ware—licenses you didn't need yet.

The New Model: The 20-user minimum is history. The new structure is far more granular:

1. Base License: Instead of buying users first, you now license the application itself. Your primary workload (e.g., D365 Finance) requires one Base License. This is the foundation.

2. Attach Licenses: Once the Base License is in place, you can "attach" subsequent user licenses at a significantly reduced price. This applies to additional full users of the base app, full users of other F&O apps (like attaching SCM to a Finance base), and other user types.

This "à la carte" approach means you can scale from one user to thousands, paying only for the capabilities you consume.

Deeper Dive: Understanding the User License Tiers

To optimize costs, you must understand the different license types and what they allow a user to do.

• Full User: This license is for your power users—accountants, supply chain planners, warehouse managers. They can initiate, approve, and complete end-to-end business processes. They have broad access rights.

• Activity User: This is a mid-tier license for users who perform specific, significant actions but don't need full process control. Examples: Approving a purchase order, performing a warehouse pick/pack/ship operation, or approving a vendor invoice. This is often a huge area for cost savings.

• Team Member: This is the most basic license. It's for users who primarily consume data or perform light tasks. Examples: Reading reports, entering a timesheet, updating their own HR information, submitting a purchase requisition for their own needs.

The Deadline:

·       April 30, 2025: Enhanced license reporting begins

·       September 1, 2025: In-app license warnings (soft block)

·       November 1, 2025: Full enforcement (hard block)

Your Step-by-Step Action Plan

Follow these steps meticulously to ensure a smooth, cost-effective transition.

Step 1: Document Your Current Licenses (The "As-Is")

First, get a clear inventory.

• Where to Look: Log in to the Microsoft 365 Admin Center (admin.microsoft.com).

• Navigation: Go to Billing > Your products.

• Action: List every Dynamics 365 license SKU you own and the quantity. This is your baseline. (e.g., 25 x D365 Finance, 50 x D365 Team Member).

Step 2: Assess Your Actual Usage (The "To-Be")

This is where you find your savings. Don't assume your current license assignments are correct.

Method A: The F&O License Usage Estimator (Your Primary Tool) This is the most critical report for this exercise as it analyzes security roles within F&O.

• Navigation: In your D365 F&O environment, go to System administration > Reports > Licensing > License usage estimator.

• Action: Run the report. It will analyze the security roles and privileges assigned to each user and suggest the minimum license required for them to perform their duties (Full, Activity, or Team Member). This data-driven report is your single source of truth for optimization.

Method B: The Power Platform Admin Center (Supplemental View) This report is useful for cross-referencing which users have licenses assigned, especially in a Dataverse-heavy environment.

• Where to Look: Navigate to the Power Platform Admin Center (admin.powerplatform.microsoft.com).

• Navigation: In the left pane, go to Analytics > Dataverse.

• Action: On the dashboard, find the card titled "Active Users" and click "View Details". You can download a list of users, their license type, and last activity date. While this doesn't analyze F&O security roles, it's excellent for spotting users with assigned licenses who haven't logged in for months—prime candidates for removal.

• Navigation: In the left pane, go to Licenses (https://admin.powerplatform.microsoft.com/billing/licenses/financeAndOperations/overview).

Method C: The Manual Audit (Essential Reality Check)

• Talk to Department Heads: A user's job may have changed. The "Accountant" who needed a full Finance license might now be in a different role that only requires approving expense reports (an Activity or Team Member task).

• Analyze Security Roles: Scrutinize your custom security roles. Are you giving away too many privileges, unnecessarily pushing a user into a higher license tier?

Your goal is a definitive list: "We need 1 Base Finance App, 18 Full Finance Users, 12 Activity Users, and 45 Team Members."

Step 3: Calculate the New Costing (The Financial Impact)

Now, model the new costs with your "To-Be" numbers.

Disclaimer: *The prices below are for illustrative purposes only. They are based on US-dollar list prices (MSRP) for the CSP channel and will vary based on your region, currency, licensing agreement (EA, CSP), and negotiated discounts. You must contact your Microsoft Partner for an official quote.

Sample Scenario: Contoso Corp After their analysis, Contoso determines they need:

• Primary App: D365 Finance

• Additional App: D365 Supply Chain Management

• 15 Full Finance Users

• 10 Full SCM Users (who also need Finance access)

• 30 Team Members

Sample List Pricing (for illustration):

• D365 Finance Base License: $180/user/month (This first user gets the app)

• D365 Finance Attach License: $30/user/month

• D365 SCM Attach License: $30/user/month

• D365 Team Member License: $8/user/month

Cost Calculation:

1. Base License: The first Finance user establishes the base. 1 user x $180 = $180

2. Remaining Finance Users: The other 14 Finance users are "attach". 14 users x $30 = $420

3. SCM Users: These users already have a base (Finance), so SCM is also an "attach". 10 users x $30 = $300

4. Team Members: These are licensed independently. 30 users x $8 = $240

Total Estimated Monthly Cost: $180 + $420 + $300 + $240 = $1,140 per month

This calculation demonstrates the mechanics. Now, take this model and apply the real quote from your partner.

Step 4: Execute the Purchase and Transition

Once your renewal date is near and your analysis is complete, it's time to act.

1. Work with Your Microsoft Partner: Your Cloud Solution Provider (CSP) or Licensing Solutions Provider (LSP) is essential. They will build the final quote and procure the new licenses.

2. Purchase the New SKUs: Your partner will place an order for the new Base and Attach licenses based on your finalized count.

3. Assign New Licenses: Once purchased, the new licenses will appear in the M365 Admin Center. Assign them to the correct users. It's best practice to have the new licenses assigned before the old ones expire.

Don't let this deadline catch you by surprise. By starting your review today, you can master this change, align your spending with your actual needs, and build a more flexible, scalable foundation for your ERP system.