Microsoft Office Double Dips Licensing Fees for Dynamics ERP Cloud Customers

Microsoft Office Double Dips Licensing Fees for Dynamics ERP Cloud Customers

Microsoft Office’s outdated licensing requirements raise the cost of Microsoft Dynamics ERP in the cloud, costing Dynamics customers thousands in unnecessary Office license fees.

Dynamics ERP cloud hosted ERP benefits

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It is no secret that Microsoft Dynamics has worked hard in the last few years to become the go-to solution for cloud based business management and enterprise resource planning (ERP).  Dynamics hosting providers are now able to offer the power of choice to their customers through a variety of Cloud options.  The Microsoft Dynamics ERP Services Provider Licensing Agreement (SPLA) is the main driver behind Dynamics hosting licenses, giving customers the option to pay for their software licenses on a monthly basis to reduce their upfront ERP licensing costs and capital expenditures.  However, the Microsoft Office side is making it difficult for Dynamics hosting partners to deliver the full value of the cloud to their customers due to outdated licensing requirements for Office products.

One of the greatest benefits to Dynamics customers is the integration and interoperability between Dynamics ERP and the Microsoft Office suite.  Excel reports can be seamlessly and easily exported to and from Dynamics ERP products, as well as data from Word-based templates for billing and invoicing.  Since most businesses are already running Office, this is a huge benefit for them.  Unfortunately the pre-cloud, pre-mobile thinking behind Microsoft Office licensing often requires Dynamics Hosting customers under SPLA to purchase duplicate Office licenses for each user in order for Office to work with the hosted Dynamics solution.  This leads to unnecessary costs to the customer that can reach into the tens of thousands depending on the number of users.

How the Office Rule Works

Under the Microsoft Office licensing rules, SLPA Dynamics customers in a shared hosting environment are not allowed to use their existing Office license to access Office software through Dynamics when it is deployed over a remote desktop connection.  This includes Azure and hosting partners’ cloud environments.  In order for a customer to use their existing licenses with hosted Dynamics, Office licensing rules currently require the server to be dedicated to that customer.  But to do this would undermine much the benefits from deploying cloud based Dynamics through a hosting provider and essentially forces hosting customers to purchase the duplicate licenses regardless.

Customers are required to purchase additional licenses whether they deploy Office locally or through the cloud via Office 365 (O365).

Resolving the Problem

The simple solution would be to grant Mobility Rights to Office volume licenses under SPLA.  Mobility rights give the licensee freedom to deploy Office on a number of devices and should therefore allow the customer to purchase Office and let the hosting provider deploy it in the provider’s shared hosting environment.  However, the Microsoft Office team has shown no indication that they intend to offer this as a solution anytime in the near future.

The Value of Dynamics in the Cloud

Despite the unnecessary licensing fees for Office and O365, deploying Microsoft Dynamics ERP in the Cloud via a hosting a provider’s shared environment still creates significant cost savings over on-premises deployment.  This allows small and mid-size organizations to leverage a solution that they would otherwise not have the resources to deploy in house.  It also allows large-scale enterprise Dynamics customers to deploy a cloud or hybrid solution to gain the power of cloud choice with anytime anywhere access.

Microsoft Dynamics Web Client users are not subject to the additional fees as they access their Dynamics solution using a web browser.  However, not all of the ERP products have complete functionality available in the Web Client.  And further, not all Independent Software Vendors (ISV) solutions have ported their applications to work with the newly released web client, so therefore this is not always an option for a customer.

Microsoft Dynamics is still the best ERP cloud choice for businesses that use Office to run daily operations.  But Dynamics hosting providers like RoseASP who are dedicated to delivering the greatest value in products and services to their customers face a major challenge to delivering value with the Office licensing restrictions, and customers suffer unnecessary fees in a time when everybody is pinching every penny.

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