Microsoft Raises Prices for Dynamics 365 as AI Functionality Expands

Microsoft recently announced that it will be implementing price increases for various Dynamics 365 offerings as of October 1st. The average price hike will be around 12 percent or $17 per user or per device per month, with the intention of adding more generative artificial intelligence (AI) functionality and options to the suite. This marks the first price update for Microsoft’s CRM and ERP suite in over five years.

While the specific price adjustments will vary, some offerings will increase by as much as $30 and others as little as $10. Microsoft emphasizes that these price increases are reflective of the continuous development and enhancement of their products. Bryan Goode, Microsoft’s corporate vice president of business applications and platform, stated that the company releases hundreds of new features and enhancements each year to help users work more efficiently and collaboratively.

The move has drawn mixed reactions from the Microsoft partner community. Michael Goldstein, CEO of LAN Infotech, a Microsoft partner, acknowledges the value added in recent years due to Microsoft’s investment in AI technology but also expressed understanding for the price increase. Goldstein compared this situation to Microsoft’s decision to raise prices for its Microsoft 365 suite in 2021, which he also believed was justified due to the added value.

It is important to note that the price changes will apply to both the cloud and on-premises versions of Dynamics 365 products. However, D365 Business Central and other offerings not explicitly mentioned by Microsoft will maintain their current pricing.

The price adjustments will take effect on October 1st for new customers and existing ones upon their renewal date after October 1st. U.S. government prices will see a 10 percent increase on October 1st, followed by another smaller increase on October 1st, 2025, to align with commercial prices.

Overall, Microsoft’s decision to increase prices reflects their commitment to continuous improvement and innovation. As they expand their AI functionality and options, these changes will support the development of even more powerful and effective solutions within the Dynamics 365 suite.

An FAQ section based on the main topics and information presented in the article:

1. What is the reason for Microsoft’s price increases for Dynamics 365 offerings?
Microsoft is implementing price increases to support the addition of more generative artificial intelligence (AI) functionality and options to their Dynamics 365 suite. These increases are reflective of the continuous development and enhancement of their products.

2. When will the price increases take effect?
The price adjustments will take effect on October 1st for new customers and existing ones upon their renewal date after October 1st.

3. How much will the prices increase?
The average price hike for Dynamics 365 offerings will be around 12 percent or $17 per user or per device per month. However, specific price adjustments will vary, with some offerings increasing by as much as $30 and others as little as $10.

4. Will the price changes apply to both cloud and on-premises versions of Dynamics 365 products?
Yes, the price changes will apply to both the cloud and on-premises versions of Dynamics 365 products.

5. Will all Dynamics 365 offerings be subject to price increases?
No, certain offerings, such as D365 Business Central and other offerings not explicitly mentioned by Microsoft, will maintain their current pricing.

Definitions for key terms or jargon:

1. Dynamics 365: Microsoft’s CRM and ERP suite that offers a range of business applications for customer relationship management, sales, finance, operations, and more.

2. Generative Artificial Intelligence (AI): AI functionality that is capable of creating new content or generating new solutions, rather than simply following predefined rules.

3. CRM: Short for Customer Relationship Management. It refers to strategies, technologies, and practices used by organizations to manage and analyze customer interactions and data throughout the customer lifecycle.

4. ERP: Short for Enterprise Resource Planning. It refers to software and systems that help organizations manage key business processes, including finance, supply chain, manufacturing, and human resources.

Suggested related links:

1. Microsoft
2. Dynamics 365 Official Website