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On CRM: Microsoft Changes Its Dynamics 365 Pricing. Yes, Again.

By July 25, 2019No Comments

(This post originally appeared on Forbes)

My company implements Microsoft products. But, compared to the other CRM applications we implement, Microsoft Dynamics has been the toughest one to sell.

Is it because of the features of its CRM modules? Absolutely not. Dynamics 365 is excellent. It’s an extremely customizable application that integrates well with other Microsoft (and third party) technologies and provides our clients using it with a fast and effective way to manage their sales, marketing and service activities.

But unfortunately, the sales and marketing teams at Microsoft over the past few years have been sabotaging the best efforts of their developers. Dynamics 365 really is a great product to sell, but the pricing and messaging scenarios are so complicated – and have changed so often – that we, and other partners I know, have had a very difficult time explaining (yet alone recommending) the best configurations for our clients, particular our small and medium sized customers.

Maybe it’s because we’re just not smart enough to understand it all. But I don’t think that’s the case. I won’t go into all the ups and downs in the pricing, branding, naming and communications that has rained down on us from Redmond over the past decade. We’re just battle weary. Even when we start to get our arms around Microsoft’s messaging, the message gets changed.

And now it’s happening again. Ready?

Currently, if you want to get Dynamics’ CRM modules you can do so under their “Customer Engagement Plan” where you pay $115 per user per month and if you want the ERP (finance) applications that’s $190 per user per month. Combined, you can pay $210 per user per month.

That’s changing. The company has decided to move away from the “plan model” to an “a la carte model.”

Mary Jo Foley at ZDNet sums it up nicely. Effective October 1, users can now get the Customer Engagement modules by signing up for a base license of $95 per user per month and then pay an additional $20 per user a month to “attach” more licenses for the modules they want. Microsoft will allow customers to add two apps (for example sales and marketing) for just $20 per user per month but any apps after (for example field service or project service) would be charged an additional $20 per user per month. So as not to confuse you further, I’ll ignore the ERP pricing going forward because this column focuses just on CRM.

Why is Microsoft doing this? The company says it’s to provide more value. But according to Jason Gumpert at MSDynamicsWorld it seems to me that the company is more concerned about…Microsoft.  Gumpert, by sharing slides from a recent Microsoft conference, reports that 80 percent of its Dynamics 365 users are only using a single app and they’re “paying less for the plan (than) they would if they were buying a single app that they really use.” Also, Microsoft is concerned that its current pricing prevents “monetization of future enhancements.” After the smoke clears, some customers may see as much as a ten percent increase in their pricing, and that’s even according to Microsoft.

Maybe this is a simpler, value-based approach for some. Maybe not for others. Look, I’m just trying to keep up and explain these things to our clients!

So here’s what I do expect: more questions from customers. More head scratching as they try to figure out slides like this. More wrong answers from Microsoft employees, partners and distributors that are, as in the past, not up to speed on these changes and just as confused as the rest of us. And – given history – more modifications to come when the team that came up with this new pricing model inevitably leaves their jobs and is replaced by yet another team that wants to change the world.

My advice to Microsoft: please stop. You’ve rebranded, renamed and repriced Dynamics to death. You’ve got a new pricing plan so fine. Just nail it down and stick with it for…oh…five years? Do I dare to say seven? Give your community a chance to catch up. Otherwise, my prospective clients will just move to other CRM products where the features are just as good and the pricing is easier to understand and doesn’t change with the next moon.

Dynamics 365 is really excellent. But when it comes to these never-ending changes, the really smart people at Microsoft are just outsmarting themselves.

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