Dynamics 365 – The SMB CRM Story, for now

Noticeably absent from both Scott Guthrie’s launch presentation, and Jujhar Singh’s keynote, was any information on the SMB CRM story, at least between now and Spring. But there is a story, and it’s a pretty good one.

The Bridge to Spring

So we know that in the Spring, Microsoft will be introducing at least two new SMB focused apps to the Dynamics 365 Business Edition family; Sales and Marketing apps will join the existing Financials app. There is also on the table, the possibility of an SMB Service App, although that might not make it by Spring. Spring may not seem that far away, unless you are an SMB focused CRM partner, like us. Worry not, Microsoft has a plan for you, although not broadly promoted. Microsoft will be offering a temporary solution for your new SMB customers; it is not something that they are hoping to build scale on, but rather an accommodation, so we are not left treading water for the next several months.

Enterprise Sales for SMB

This sounds like an oxymoron, I know, but Microsoft will allow you to sell the new Enterprise Sales App to your SMB customer. You may be thinking, well duh, but what SMB customer can afford the Enterprise price? Not many, so Microsoft has introduced an interim promotional price for just this situation: $40/user/mo. Yes, that is less than half of the Enterprise price… for the same app. This Enterprise Sales App will include both the Sales functionality and the basic Marketing elements currently within Dynamics CRM Online. But there are some caveats. For one, there will be no Service capabilities (more on that further down). Also, the maximum number of users for the Sales App is capped at 25. Don’t complain, it was originally going to be 15, but a few of us whined on your behalf, and they ultimately agreed to 25. However, they also threw in Enterprise Team Member licenses at $5/user/mo, with a cap of 150. New customers who purchase these licenses will be able to keep them, at that price, for 3 years. This picture is starting to look pretty good now for new SMB customers. I’ll discuss your existing SMB customer options further down. But first let’s drill into some details on this new SMB customer option a little more.

A few more T’s & C’s

• Promotion applies to new Dynamics 365 for Sales or Microsoft Dynamics CRM Online customers. A new customer is a customer that has not previously licensed any version of Microsoft Dynamics CRM. (Not sure if prior trials count)
• Team members, Enterprise edition for $5 only on customer accounts with the $40 Dynamics 365 for Sales, Enterprise edition offer. (I assume this means that you must purchase at least one $40 license)
• Available from Cloud Solution Provider (CSP) Program partners only (It is not clear if Distributors will even have them, so there may be a challenge for partners who are not Direct CSPs to get this.)
• Available December 1, 2016 until June 30, 2017 or the public availability of Dynamics 365 for Sales, Business Edition, whichever comes first. (Leaves a gap for November, and I can see a rush on June 29th)
• Tiered pricing is not applicable for this offer.
• Promotion cannot be purchased in combination with regular priced Dynamics 365 for Sales or Team Members, Enterprise edition seats. (SMB Focused)

All in all, a pretty good offer for the right SMB situation, in fact, it looks like a better offer than we may have in the Spring.

Not so good for the SMB customer needing Service

Unfortunately, if your new SMB prospect really needs Service capabilities, this is not going to help you. Customers that require Customer Service functionality will need to subscribe to the Enterprise edition Customer Service App or Enterprise Plan 1, at the Enterprise pricing. And this cannot be mixed with the Sales App offer, so they are going to have to have a real bad Service need. BTW, same story if they are needing Field Service or Project Service, gotta go to Enterprise.

What about existing SMB Customers?

Your existing SMB Dynamics CRM Online customers will have the same options as existing Enterprise customers: the transition Skus. At renewal, they will have to switch to Dynamics 365, but there will be some step-up pricing available so they are not hit with a huge price increase, the step will be like $10. But don’t forget about the Team Member license; many of those users (particularly Basic and Essentials Users) will be able to switch to that, and more than offset any cost increase. I have had partners ask me, what if we just cancel and restart them on the $40 offer? Well, Microsoft clarified that in the first bullet of the T&Cs above, so nice try.

What about in the Spring?

The Spring picture is still quite fuzzy. For example, I would assume that an existing SMB customer, whose renewals take place after the Spring launch will be able to transition to the new SMB App licenses. But that may be a downgrade depending on what they are using, and what apps will be there then. The new customers, who take advantage of the offer above, will have 3 years, but what happens after that? Not clear. We know that the new SMB Sales App for example is planned to be a simplified version of the Enterprise Sales App, as opposed to a whole new product, but what is “simplified”. And what if the interim SMB customer is using enterprise features that may be “simplified out” later? I am not too worried about it today, Microsoft has time until Spring to sort out these, and other issues I am sure I missed, and they are engaged with us and others.

So what are your thoughts on all this? Let me know in the comments below.

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