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Estimating the Cost of a Microsoft Dynamics CRM Implementation -- Part 2: Software Licensing

The cost of a Microsoft Dynamics CRM implementation includes software licensing, internal costs of the time of your staff, and sometimes hardware and professional services from Dynamics CRM specialists. 

To determine the cost of the software licensing, you must determine the deployment mode and choose which type of licenses you will need. You can start here: http://www.microsoft.com/en-us/dynamics/crm-purchase-support.aspx  The comprehensive source is here: http://crmpublish.blob.core.windows.net/docs/Pricing_Licensing_Guide.pdf   Keep on reading if you would like a briefer introduction to your options.  

Your reseller is best source for software pricing, and can create a quote based on your volume license agreement.  If your organization has an enterprise agreement for Microsoft products, it will offer the best prices.  

Counting Your Users and Servers

Dynamics CRM is licensed based on named users, so the first step in calculating costs is to count your users.      First, count internal users that are within your organization.   The most common licensing approach is based on named users.   For instance, if your department has 500 people and all of them will be using Dynamics CRM, you would buy 500 client access licenses (CALs).  

Microsoft also offers device CALs, so two or more people who are non-concurrently sharing a workstation could use just one CAL.    This makes sense if you have shift workers or call centers that operate around the clock.

Will external users need to access information from your CRM implementation?   An external connector is available for on-premise deployments to cover these licenses.

Next, count how many Dynamics CRM servers you will need.    How many servers are needed to support the size of your solution?   How many environments will you need, such as development, test, staging and production?    Three or four environments are typical for enterprise solutions.

Microsoft offers two server licenses.   The standard server license is called Microsoft Dynamics CRM Server.    If you have five or fewer users, you can pay less for a server version called Microsoft Dynamics CRM Workgroup Server. If your needs grow, the workgroup server may be upgraded to accommodate more than five users.

Choosing the Deployment Model

One of the advantages of Dynamics CRM is that you may deploy your solution on premise at your office, in the cloud, or at a hosting facility.     Your choice of deployment options will affect the licensing cost.

Dynamics CRM Online

Cloud-hosted Dynamics CRM is the easiest deployment model to price.     For most customers, Microsoft CRM Online costs $65/user/month.  This fee covers both the hosting and the associated software licenses.   This deployment model is rapid -- Microsoft manages the infrastructure and you don't need to install anything on your servers.  It is flexible and quite scalable, so you can add (or subtract) users as your needs change.     In the short run it is also the least expensive option because it doesn't require any hardware acquisition.  If you deploy with Dynamics CRM Online, you will automatically receive all software updates which will be installed by Microsoft.

You can purchase additional storage for Dynamics CRM Online, so you should estimate the storage you will need to get an accurate cost estimate.

For Dynamics CRM Online, you don't need to worry about servers, so the licensing and hosting cost will be driven by the number of users. 

Hosted Deployment

The second option is hosted deployment.  Many companies will host your solution for you on their server facilities. Hosting may be shared (with other organizations) or dedicated (you have the server to yourself).   Microsoft offers Service Provider (SPLA) licensing for its products which allows the license to be bundled into your monthly hosting bill.    If you choose dedicated hosting, you may use your own licenses purchased in the same way as for on premise deployment.

On Premise Deployment

The third and most common option is on premise deployment --the most complicated licensing scenario.    This means that you will install the software at your own facility on hardware that you provide.  Microsoft offers software maintenance under a program called Software Assurance that includes updates to the products you purchase.  Your organization must manage the servers and is responsible for backups and installing updates. 

In addition to the full user CAL, Microsoft offers two special CALs with limited functionality.   First is the Employee Self-Service CAL, with a limited API and limited read/write access using an interface other than the standard Dynamics CRM interface such as a form on a web page. The second is the Limited CAL, with full read access and limited write access using the Dynamics CRM interface.  There are additive CALs which allow you to step up from a limited to a less limited CAL. 

Summary

Here is a summary of the calculations to determine your licensing cost. 

Dynamics CRM Online cost = ($44/user/mo. x number of users) + ($9.99/gig/additional storage  x storage needed) x number of months

Hosted CRM licensing cost = monthly hosting x number of users x number of months

On Premise licensing cost = (servers x server license) + (users x CAL price for each CAL type needed) + optional external connector

Extras

You may also need licenses for related products such as Windows Server, SQL Server, and Microsoft Office. 

See our Dynamics CRM implementation cost calculator







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