Dynamics 365's Cheaper Twin Nobody Knows About

After twenty-five years working with Microsoft licensing, I thought I’d encountered every cost optimisation strategy imaginable. Dynamics 365 optimisation, in particular, presents unique challenges due to its complex licensing structure. Unlike other Microsoft products where the path to savings is relatively clear, Dynamics demands careful analysis of user requirements, functional dependencies, and business processes.

The usual approach is to look at what your users actually do, figure out who’s not using their licences properly, and maybe move some people to cheaper team licences or get rid of seats you don’t need. It works, but assumes you’re stuck with Dynamics pricing as it stands.

Recently, during a conversation with Vlad Sarov (opens in new tab), a Microsoft MVP with over twenty years of Dynamics experience, I learned something that completely shifted my understanding of Microsoft licensing. Vlad runs a team of forty specialists doing Dynamics customisations and extensions, so he knows this area thoroughly. What he told me was simple but transformative: you can get most of Dynamics 365’s functionality through Microsoft Power Platform at a fraction of the cost.

Microsoft designed it intentionally, though hardly anyone seems to know about it.

How This Situation Came About

Microsoft CRM 1.0 launched in 2003, eventually evolving through various rebrandings before settling under the Dynamics umbrella alongside former standalone products like Great Plains and Navision. As Vlad noted, “Dynamics is actually a marketing brand. It’s maybe not a technology, but you have all this technology underneath.”

Around 2015-2016, when the low-code, no-code movement gained momentum, Microsoft had to decide: build something new from scratch or use what they already had. They chose the latter, making a decision that would create substantial cost-saving opportunities.

“What they did,” Vlad explained, “they actually decided to use Dynamics technology, which underpins Dynamic CE… they stripped out all the first party apps, first party app elements, like invoice quotes, opportunity management. So you take away all this UI user experience elements, but you keep the beast underneath.”

This “beast” (the underlying database architecture, business logic, and configuration capabilities) became the foundation for Power Platform, first as Common Data Service in 2016 and, from 2020, under its current name, Dataverse. Microsoft basically took apart their technology and started selling the engine separately from the apps built on top of it. Dynamics 365 is really just a fancy Power Platform app that Microsoft built.

The pricing differential is substantial and has persisted over time. Dynamics 365 Sales Enterprise currently costs $105 per user per month at retail pricing. Power Platform offers per-app licensing at $5 per user per app (now sold only to existing Enterprise Agreement (opens in new tab) customers and through CSP (opens in new tab); others pay $10 per active user per app per month), and per-user licensing (Power Apps Premium) at $20 per user per month ($22 from January 2027). Dynamics pricing increased from $95 to $105 in October 2024.

“$95 dropping to $5,” Vlad observed. “This is the difference you potentially can save on licence.”

Note: those were the prices between 2021 and 2024. Today, for most buyers, it is $105 against $20 or $22, still roughly an 80% saving.

But Vlad was quick to point out: “We don’t want to send a message that we found a loophole in the system. You need to do analysis and identify is it a best fit? The right word here, we’re not saving, we’re finding a better fit.”

What Vlad told me matters. Good licensing means matching what people need with what they pay for, not just chasing the lowest price. Companies that succeed here examine actual user behaviour instead of buying everyone the same licence.

What You Need to Know About Restricted Tables

Power Platform licensing includes restrictions on changing data in certain Dynamics entities (reading them is allowed). 41 tables are classified as “restricted,” which sounds scary until you see what they actually are.

“The only entity you probably care about and you’re more likely to use is incident, it’s the case entity,” Vlad noted. “So if you’re a heavy user of the service module of Dynamics, you may not be able to use Power Platform for the same sake, but for contacts, accounts, opportunities, leads, all of that is fair play.”

Even cases are not fully off-limits. A Power Apps user can create cases and edit the ones they created, which covers employee self-service. What they cannot do is work cases created by others: resolve, route, assign or close them. That is agent work, and it needs a Customer Service licence.

Most restricted entities are technical tables supporting first-party applications: booking journals, booking setup metadata, booking timestamp. Microsoft needs these for their first party apps. If you’re not using Microsoft’s pre-built service modules heavily, the restrictions barely matter. A few are not technical, though: Goal matters to sales teams, and Knowledge article, SLA and Entitlement matter to service teams.

Vlad mentioned an interesting observation from his presentations: “In my session, I ask people in the audience how many entities or what tables do you think Microsoft restricts if you use Power Platform? And they were giving all the wrong answers. People assume you cannot use contacts, most popular table. You cannot use accounts. No.”

You also can’t access first-party application features such as the “convert lead to opportunity” functionality, though you can view these interface elements. You must evaluate whether custom workflows can replace these capabilities or whether the loss of these features represents an acceptable trade-off for the cost savings.

Who Needs Full Dynamics and Who Doesn’t

The average user touches about 10% of application functionality. Sumit Chauhan, a corporate VP in Microsoft’s Office product group, said as much publicly in 2023, according to Vlad. It highlights how disconnected licence costs are from actual use.

What this means: many users need core data access and basic functionality rather than every feature available. You can make smart licence choices based on what people actually do instead of job titles or org charts.

Vlad provided practical examples of this principle in action:

“If you have a sales development representative, you have an account executive who needs to use all this power, maybe needs to use LinkedIn Sales Navigator. Those folks would benefit from having a full-blown Dynamics licence. But let’s say you have an assistant for SDR, and that person might not need a full-blown licence.”

Event management shows another clear case where traditional licensing wastes money: “You have a person who sits at events and all he does is scanning pictures and going through a list of attendees and just populating data in CRM. You might want to create them a Canvas app, a mobile app… All you need is just a single experience, single screen with name, first name, last name, email.”

How many of your Dynamics users actually need everything? How many could do their jobs through simpler apps at much lower cost?

How One Client Saved Money and Got More Value

Vlad shared an example from a client renewal cycle that demonstrates strategic thinking beyond simple cost reduction. Rather than merely cutting licensing expenses, the organisation redistributed their Microsoft spending to achieve better overall value.

“What they did, they actually used this opportunity not to drop their price point… they actually shifted their budget to buy more LinkedIn licences, for example, because that was their LinkedIn Sales Navigator.”

The organisation moved appropriate users to Power Platform licensing and invested the savings in LinkedIn Sales Navigator licences for their sales professionals. Several objectives were achieved simultaneously: reduced per-user costs for light users, enhanced capabilities for power users, and maintained overall Microsoft spend levels whilst improving value delivery.

“The money they saved on Dynamics, people moved to Power Platform, they shifted, they consumed something else from Microsoft, and that was good for everyone because effectively it was deeper penetration from Microsoft’s perspective, more licences within the account.”

This case study illustrates the mature approach to licensing optimisation: understanding that the goal isn’t necessarily to reduce total technology spending, but rather to ensure that every pound spent delivers maximum business value.

Avoiding the Multiplexing Trap

Any discussion of licensing optimisation must address multiplexing restrictions. Microsoft’s licensing terms prohibit having licensed users access data on behalf of unlicensed users, regardless of technical architecture.

Vlad provided a useful analogy: “Let’s say you have a kid whom you give one cookie a day, this is your house rule. So he takes this cookie, and then you have a younger one who your oldest sends to go and take a cookie on his behalf and he’s going to consume it anyway. So you have somebody else going, taking data on your behalf and not paying additional licence.”

Here’s the thing: every individual who consumes or contributes data requires appropriate licensing, regardless of intervening technology layers. You cannot circumvent licensing requirements through API implementations or portal architectures that mask actual user access patterns.

The same rule applies to Power Platform implementations. While the per-user cost may be lower, the requirement to licence every actual user remains unchanged. The savings come from matching appropriate licence types to actual usage patterns, not from reducing the number of licensed users.

Storage Limitations and Other Considerations

Full Dynamics licences include generous storage allocations (250MB of database and 2GB of file capacity per user, pooled across the tenant). Power Apps Premium carries exactly the same allowance, so moving a user from Dynamics to Premium costs you nothing in storage. Per-app licences give far less: 50MB of database and 400MB of file capacity each. As Vlad noted, “If you have a lot of attachments, you can easily consume space allocated for your user… Storage is also another parameter you need to consider.”

For companies that store lots of documents, this could bump up your costs. You can buy extra storage, but factor that in when you’re weighing up Power Platform.

The Implementation Reality

The per-app licensing model works differently from traditional user licences, which adds complexity. “Per app, that $5 licence, it’s not assigned the same way as per-user licence,” Vlad explained. “Per app sits in your environment as a bank, as a pack… Every single time you assign an app to a user, that licence is consumed. When you release the app, the licence goes back to the pool.”

The dynamic allocation model gives you flexibility but means licence management becomes more complicated than the old per-user model. Smaller companies can probably handle it themselves. But as Vlad noted, “If you’re a large organisation, you need help… someone to help you work through the licence space and a technologist to explain what the impact might be.”

Why Microsoft Allows This

From Microsoft’s perspective, they’re playing smart business. Power Platform has brought in customers who would never have touched Dynamics before, whilst existing Dynamics customers mostly stick with what they have.

Vlad put it well: “Microsoft is always disrupting itself. So now with Copilot… they need to readjust their pricing, and it might cannibalise, but you know what? As a good business, you’re trying to disrupt yourself, not waiting for somebody else to disrupt you.”

The number of people working with Power Platform now shows that Microsoft has grown their market rather than just moving existing customers to cheaper licences.

In 2026 Microsoft stopped selling the per-app licence to new buyers and announced a Premium price rise for 2027, so the twin is getting more expensive.

Power Platform is also where Microsoft is building their AI features. As Vlad explained, “Copilot Studio used to be PVA, Power Virtual Agents. Initially, when Copilot just came about, it was a virtual agent sitting on top of Power Platform.”

If you understand this ecosystem now, you’ll be ahead of the game as AI features become more common. Master Power Platform today and you’ll be ready for AI-enhanced features as they arrive, whilst others might find themselves paying premium prices for functionality they could get more cheaply.

Real Companies Using Power Platform

Companies are already doing this successfully. Vlad mentioned several vendors who’ve built successful businesses using Power Platform: “There is RapidStart CRM, that’s actually a CRM which is competing with Dynamics… what it does is simplify the complexity which Dynamics brings in and created a CRM on top of Dataverse for the same price point.”

These companies prove that serious CRM functionality can be delivered through Power Platform licensing at much lower costs than traditional Dynamics. “Microsoft is supporting it because they think it’s fair play,” Vlad noted.

How to Assess Your Situation

There’s an opportunity here, but you need to do your homework first. Start by looking at your users to find who might work with alternative licensing:

Power User Identification: Figure out who really needs LinkedIn Sales Navigator, advanced analytics, or all the features. Keep these people on full Dynamics licences.

Light User Classification: Find the users who mainly do data entry, basic reports, or simple record updates. These people are perfect for Power Platform.

Functional Dependency Analysis: Check if you need to create or update records in restricted entities, especially working cases raised by others. If you do, Power Platform might not work for those users.

Storage Requirement Assessment: Look at how much storage you’re using now and see if the per-app licence’s smaller allocation would mean buying extra storage.

Integration Complexity Evaluation: Be honest about whether you can handle Power Platform internally or need outside help.

You don’t want to move everyone to the cheapest licence possible. You want to make sure what people pay matches what they actually do.

Microsoft has changed licensing from simple per-user, per-server models to complex systems where knowing how different technologies connect can save you serious money.

Companies that figure this out will have real advantages over those that just take whatever their vendor suggests. Microsoft has set things up so there are multiple ways to solve the same problems, and the smart companies will understand their options and choose accordingly.

After decades doing this work, I’ve learned that the best discoveries are often obvious once you know them. Microsoft Power Platform isn’t a secret. It’s well-documented, fully supported, and actively promoted. But somehow its cost implications for existing Dynamics customers remain largely unknown.

Real opportunities exist for those willing to honestly assess what they need. The savings can be substantial (around 80% with Power Apps Premium, up to 95% for those who still have per-app) while keeping what matters. But you need to do the work properly and often get help from people who know this stuff (opens in new tab).

The question isn’t whether this exists (it does). The question is whether it works for you, and that means examining what your users actually need, what you can handle, and where you want to go. For most companies, it’s worth the effort.