A new licensing plan introduces a per-user fee for the previously free Snap for Dynamics AX but eliminates other charges, resulting in lower prices for customers. Snap for Dynamics AX is a set of Office add-ins that gives Office applications access to data and functions in Microsoft's high-end Dynamics AX enterprise resource planning (ERP) product. The licensing plan also introduces a single, consistent price for Web-based self-service applications in Microsoft's other ERP products—Dynamics GP, NAV, and SL—but could increase customers' overall cost for deploying those applications.

License Plan, Not a Client

Announced at Convergence 2007, Microsoft's semiannual conference for partners and customers, the licensing plan bears the unwieldy and somewhat misleading name Microsoft Dynamics Client for Microsoft Office and SharePoint Server. Despite the name, the plan does not introduce new client technology for the Dynamics line but merely repackages an existing collection of supplemental modules and applications for the Dynamics ERP products with a new per-user licensing scheme.

The Dynamics Client license lets users access the following applications:

Snap for AX. Initially released in Feb. 2006, Snap is a set of seven Office add-ins that allow users to access Dynamics AX data and functions from Office applications. First released as free downloads and source code, the Snap programs offer functionality similar to that of Duet, the joint Microsoft and SAP product that gives users of Office access to the mySAP ERP application. For example, a worker could use Snap to view and submit entries via Outlook for time worked.

Portal and self-services applications. Each of the four Dynamics ERP products provide Web-based portal applications designed to allow casual users to access some data and functions through a browser. The products' portal capabilities are built on Windows SharePoint Services (WSS), Microsoft's platform for team collaboration Web sites, and each product includes several self-service applications. For example, a GP portal application called the Human Resources Self-Service Suite lets workers directly view and update employment-related data, such as pay-and-benefit and time-and-attendance information.

FRx WebPort and DrillDown Viewer. The new licensing plan gives customers the right to use a pair of modules in the FRx financial reporting application: WebPort, which provides browser access to financial reports, and DrillDown Viewer, a separate utility for navigating reports. However, Microsoft has indicated that the FRx application will be phased out in favor of PerformancePoint Server 2007, a new performance management and financial reporting product scheduled for late 2007. The company has not said whether the Dynamics Client license plan will cover equivalent functionality in PerformancePoint 2007 when that product ships.

Custom add-ons and extensions. The Dynamics Client license gives customers the right to add new portal applications (for example, applications developed in-house or by Microsoft partners) without incurring additional per-user fees.

Dynamics customers have historically purchased these applications and modules a la carte, with the exception of the Snap programs, which were free. Prior to the new license plan, fees for the portal applications and their associated user licenses differed for each Dynamics product. But in most cases, customers paid a per-server fee for the portal applications and purchased separate licenses for each user accessing those applications from a browser—the GP Human Resources suite carries a US$5,000 server license and a US$40 per-user license, for instance.

May Raise Price

The Dynamics Client license simplifies the licensing of portal applications for Dynamics and makes pricing consistent, but it increases costs for customers in some cases.

With the new plan, customers pay a single, fixed per-user fee of US$195 regardless of which ERP product they use, and they no longer pay separate per-server fees for the portal applications. The new plan lowers the cost for customers to license one of the Dynamics products' portal applications and the WebPort and DrillDown Viewer modules (which today list for US$200 per user).

However, other customers will see the change as a price increase. For example, for GP customers who plan to deploy a subset of the Human Resources suite to a large number of users but do not intend to license WebPort and DrillDown Viewer, the higher per-user license fee of the Dynamics Client means a net increase in cost.

Boon for AX Customers

Customers of AX stand to benefit most from the Dynamics Client licensing program—even though the Snap programs were first launched as free downloads, their use required that customers licensed a separate "business connector" component that carried a price tag of US$500 per user. In addition, the new license plan does away with the AX portal server fee of US$2,400 and replaces its current US$205 per-user license. Furthermore, because Microsoft plans to license the Snap programs, it will also support them—previously, Microsoft offered no support for Snap.

By dropping the price, Microsoft hopes to encourage AX customers to deploy Snap and to give more workers access to the product's portal applications. Furthermore, lower per-user costs could increase customer demand for such applications, which could in turn encourage partners to create new self-service portal applications and Snap add-ins for AX. Perhaps just as important, the new plan minimizes a source of embarrassment for Microsoft: namely that its "free" Snap with the required business connector license was actually considerably more expensive than Duet, which lists for US$125 per seat.

Pricing, Availability, and Resources

Under the Dynamics Client license plan, Dynamics ERP customers pay US$195 per user for portal applications and their use. For an additional US$200 per user, Dynamics Client customers can acquire a single-server license for SharePoint Server 2007, valued at about US$4,400, and that product's Standard and Enterprise Client Access Licenses (CALs), which are valued at about US$170. SharePoint Server 2007 is Microsoft's platform for corporate portal Web sites and adds features such as content management and business intelligence to the WSS 3.0 platform on which it is built. The offer will interest customers considering SharePoint Server for a corporatewide portal platform that can incorporate data and reports from Dynamics applications.

The Dynamics Client plan starts in May 2007 for new customers of Dynamics AX 4.0, GP 10.0 (which ships midyear 2007), NAV 5.1 (scheduled for late 2007), and SL 7.0 (midyear 2007). Microsoft has indicated that existing customers of its Dynamics ERP products will be able to purchase the license in the first half of 2008.

The Dynamics home page is www.microsoft.com/dynamics/default.mspx.

Dynamics licensing is outlined in "New Dynamics Licensing Includes Free CRM" on page 12 of the Sept. 2006 Update.

The Dynamics Snap programs are described in "Office Front End for Dynamics AX, CRM" on page 22 of the Apr. 2006 Update.

More information about WSS 3.0 and SharePoint Server 2007 can be found in the Apr. 2007 Research Report, "SharePoint Platform Matures, Expands Role."

The Microsoft-SAP Duet product is described in "Duet Future Promised".