This question often arises as part of procurement because a solution using PowerApps is significantly cheaper.
A one apps license for PowerApps costs only $5/user/month, while a basic license for the Sales module starts at $65/user/month. The considerable price difference is due to Build vs. Buy. Dynamics 365 is a fully featured CRM, while PowerApps allows users to build applications. The distinction can be compared to purchasing a computer off-the-shelf versus designing a custom application.
Not every organization needs Dynamics 365 to get their needed CRM functionality. Power Apps and the Common Data Service have the components to build a simple CRM app that looks and operates like Dynamics 465, excluding any unneeded features. In fact, Dynamics 365 is a Power App.
The first step is to specify if your organization wants to enable the Dynamics 365 apps, which cannot be changed later. If one opts for PowerApps only, then later decides to purchase the full Dynamics 365, they would have to start from scratch and migrate their data. To decide which way to go, you need an intimate knowledge of the business.
Let’s illustrate by looking at an example for which PowerApps is a good fit. Company “ABC” is a non-profit organization that performs research projects and programs. Many of their initiatives are government funded. While they collect feedback and information from external stakeholders, they don’t “sell” in a typical sense, have a customer support center, or track tickets. That being said, they have a number of great use cases that can be handled using Power Apps (model-driven, canvas and portal).
Note: Microsoft hasn’t called their suite of business applications “CRM” (Customer Relationship Management) for a few years now. However, it still is a common term for customer engagement software solutions. The “CRM” apps are now referred to as Dynamics 365, and are a collection of various apps (e.g. Dynamics 365 Sales, Dynamics 365 Customer Service and many others).
A large number of Dynamics 365 implementations are perception based. A common need that organizations have is a centralized repository of their stakeholders, along with any related communications and business information. A misperception of many procurement managers is that they need a CRM system to accomplish this.
Despite looking at the Power Apps for some of the line of business apps, there are folks looking at SalesForce.com, Dynamics 365 (CRM), or potentially some other CRM system. However, selecting Power Platform would give them access to most of the functionality of the “vanilla” Common Data Model and could expose their required “CRM” functionality in a simple model-driven (or even Canvas) Power App. Any unique needs can be easily added with the same tools used for building other lines of business applications. Company ABC would likely never need features like Leads, Opportunities’, SLAs, Cases, etc.
In defense of Dynamics 365, Power Apps provide an incredible amount of functionality for specific business cases: Sales management (Dynamics 365 Sales) Customer support management (Dynamics 365 Customer Service) as well as many others (Field Service, Project Service, Marketing, etc.) that extend the Common Data Model and provide line of business applications specific to specific workloads.
However, not everyone needs the Dynamics 365 first party applications. In fact, in many projects, architects often remove or hide many of the sales, service entities, and functions before adding their own. These types of apps were referred to as “xRM”, or “Anything Relationship Management”.
Your customers will be delighted to know that by choosing the Power Platform, they can quickly have the system they need. The Common Data Model provides the required tables and pre-built forms and views for Accounts, Contacts and Activities in the Common Data Service. You will find that certain tables (labeled restricted) are not available (Leads, Opportunities, Incidents). Of course, the clients are free to create custom versions of these tables if needed.
The best reason for doing this is that the licensing for a Power Apps Per User plan is considerably less than a full Dynamics 365 plan license.
For many organizations, such as non-profits, charities and government departments, a Power App can provide the core functionality required. Even if an organization eventually needs to deploy Dynamics 365 first party apps, the hope is that someday those apps can be installed after the fact on an existing CDS environment.
Another great initiative by Microsoft is the creation of industry accelerators. These accelerators are built following industry standards and can be installed on both vanilla CDS and Dynamics 365 environments without requiring extra licensing. Accelerators provide customers with a head start in building their industry-specific line of business applications. Microsoft continues to add and update accelerators on a daily basis; you can check them out here.
If you do need some of the sales and service functions, but not necessarily all the bells and whistles of Dynamics 365, you could build these components as well or look at some ISV products like RapidStartCRM.
First, the “Customer Engagement Plan” is a thing of the past. Customers can now directly license the specific D365 first party apps they need. This approach allows businesses to mix and match for maximized efficiency. If some users require opportunities while others use cases, a company can license sales for the sales users and customer service for the support case users.
Second, administrators and makers do not need a Dynamics 365 license. An organization can have a PowerApps-per-user license and be a maker of Dynamics 365 apps, as long as somebody in their environment is licensed for a Dynamics 365 app.
Most types of users do not need the full breadth of Dynamics 365 licenses. For those who need first party apps like sales hub, customer service hub, and field service, a Dynamics 365 license is required. However, the rest of users could purchase a cheaper PowerApps license and still have access to the core platform and any custom model driven apps in the same environment as Dynamics 365 licensees. This advantage applies to many customers of insurance, credit unions, or financial service products. Thus, for a company with users that don’t need first party apps or restricted entities, a PowerApps license would be more than enough.
Depending on certain factors, PowerApps and Flow may be included in your licensing for Dynamics 365. If your PowerApps or Flow leverages the Common Data Service and is used in context with Dynamics 365 apps and solutions, Flow and PowerApps are included in your license. Microsoft refers to this as “seeded apps and flows.” However, if you are building apps and process that leverage other connectors and do not involve the Common Data service, you need to license PowerApps and Flow individually.
Microsoft announced new API request limits for Dynamics 365, PowerApps, and Flow. For enterprise users, the limit is 20,000 per day. To provide for customers with high volume integrations, Application Users and Non-Interactive Users (special non licensed service accounts provided in enterprise deployments) are granted 100,000 API requests per day pooled at the tenant level. If you occasionally exceed your limits, your processes will not be stopped and you will not see any additional invoices. If you consistently exceed your limits, however, you will need to purchase additional API request allocations.
Microsoft has introduced a number of new capabilities for Omnichannel Engagement Hub, Power Virtual Agent, Sales AI, and more. Each of these requires an additional license and are priced based on volume of transactions. For example, Power Virtual Agent is $1,000 per month for up to 2,000 chat sessions per month, and additional 2,000 sessions can be purchased for $450/month.
Dynamics 365 Portals is now called PowerApps Portals. Portals no longer requires any Dynamics 365 licenses, and it now provides 100,000 external unauthenticated page views per day. Authenticated logins start at $2 per login and go down based on volume. See Colin Vermander’s blog for more details.
The licensing and entitlement landscape of Dynamics 365 and Power Platform can be difficult to navigate. With each individual entitlement, there are nuances built within it that require a closer inspection. Deciding between Dynamics 365 and Power Platform may seem like a tricky task, but taking the proper steps to determine what suits your needs best will save you a time and money in the future. If you would like to have a conversation about how we can help you navigate the licensing landscape, please feel free to contact NvisionKC.
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