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The Ultimate Microsoft Dynamics 365 ERP Licensing Guide: What You Must Know

Cut through the complexity, avoid costly surprises, and choose the right Dynamics 365 licenses for your business.

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Microsoft Enterprise Agreement & Licensing Banner
Neha Bhagat
Senior Director – Microsoft Dynamics (Practice Head)
January 22, 2026

Table of Content

If you’re running Microsoft Dynamics 365 Finance and Supply Chain Management, the rules of the game are about to change—and this time, Microsoft is serious.

Microsoft has delayed its enforcement timeline from November 1, 2025, to January 15, 2026, but the change is tied to your contract renewal or anniversary date, not a single global deadline. After your renewal:

  • Microsoft triggers license validation within 15 days
  • You get another 15-day grace period to assign the right Microsoft Dynamics 365 Finance and Supply Chain Management license
  • After that, any unlicensed user will be blocked and see prompts to request access

In other words, this is not a distant, theoretical issue—it will land on your doorstep as soon as your renewal cycle hits.

The upside: the delay gives you a critical window to get intentional about licensing. A structured, data-driven Microsoft Dynamics 365 licensing guide can help you clean up access, avoid disruption, and protect business continuity well before enforcement reaches your tenant.

What the New Timeline Really Means for You

That extra time isn’t just a grace period— it’s a chance to fix your estate in a controlled way instead of reacting under pressure. Because enforcement is tied to renewal and anniversary cycles, Microsoft is effectively forcing a staged cleanup. Used well, that’s an advantage:

Proactive engagement

Renewal becomes a natural checkpoint to reassess user volumes, roles, and licensing needs—based on actual usage, not assumptions.

Reduced operational impact

A phased rollout gives you time changes around month-end close, peak seasons, and critical projects, so workflows don’t grind to a halt.

Scalable and transparent

Each renewal window becomes a clear validation checkpoint. With the right governance, you can sequence remediation and communications, staying ahead of each wave instead of being surprised by it.

The Licensing Shifts You Need to Navigate Next

  • Once you understand the staged rollout, the next step is understanding what is changing and where the impact will be felt: Enterprise Agreement discounts are going away Tiered EA discounts (Levels B–D) will be discontinued, pushing many organizations closer to list pricing.
  • Unlicensed users will be warned, then blocked Users without valid licenses will first see soft warnings and then be blocked from access once enforcement applies to your tenant.
  • Smaller tenants lose Enterprise Agreement eligibility Organizations with fewer than 2,400 licenses will no longer qualify for Enterprise Agreements and will need to move to another model, such as the Cloud Solution Provider (CSP) program.
  • Teams is no longer automatically bundled Customers transitioning to CSP will need to purchase Microsoft Teams separately, which can increase total cost of ownership if not planned for.
  • Nonprofits face grant license adjustments Nonprofits may receive fewer free grant licenses, though discounted options remain—making intentional planning essential for budgeting.

Why Getting Licensing Right Is Now Mission-Critical

All of these changes aren’t just commercial fine print—they directly affect how your business runs every day.

Effective licensing is crucial for compliance, scalability, and cost control. When managed well, it keeps operations efficient, access uninterrupted, and budgets predictable. Poor management, on the other hand, leads to overruns, raises the risk of audits, and can result in financial penalties.

Lack of practical oversight limits functionality reduces productivity, and forces teams into manual workarounds that quietly erode efficiency. In severe cases, it can damage vendor relationships and weaken your negotiating position. A Microsoft Dynamics 365 Finance and Supply Chain Management license determines who can do what, which features are available, how integrations behave, and how much data you can handle—making strategic oversight essential if you want to avoid sudden restrictions at critical moments.

What You Should Do Now: A Practical First 90-Day Plan

With the enforcement clock ticking and pricing changes ahead; the next step is turning awareness into action. Here’s how Korcomptenz can get your house in order before the new rules bite. We have a fixed fee-based project model to address all your license estate and finalize the right numbers across D365/M365/Azure:

  • Conduct a User Access Review: Identify all active users and their assigned security roles. This establishes a strong foundation for license compliance and ensures that every user has appropriate access.
  • Review current assignments: Use PPAC and LCS reporting to identify inactive accounts and misaligned roles.
  • Streamline access: Remove unused profiles and verify that active users have proper permissions.
  • Prepare for renewal pricing: For those whose contracts renew after November 1, 2025, prepare for standard Level A pricing and plan budgets accordingly.
  • Enable internal readiness: Make sure administrators and end users are aware of the new licensing process and system notifications starting September 2025.
  • Apply Least-Privilege Security: Grant users only the permissions essential for their roles, avoiding over-provisioning that drives up licensing costs.
  • Take advantage of the grace periods: In few cases, customers may be eligible for the 12-month extension; Korcomptenz can try and apply the time to your advantage rather than delaying action.

Know Your Microsoft Dynamics 365 Finance & Supply Chain Management Licensing Models

Once you’ve cleaned up access and prepared enforcement, the next step is understanding the core Microsoft Dynamics 365 Finance and Supply Chain Management licensing models you’re working with. Most environments combine more than one:

User-Based Licensing: Licenses are attached to individual users and grant full or limited access based on defined roles.

Role-Based Licensing: Access becomes more granular, allowing users to pay only for the capabilities they actually require.

Module-Based Licensing: Specific functional areas are licensed independently, enabling phased deployment or highly specialized configurations.

Expert Help When the Stakes (and Costs) Are High

You don’t have to navigate these changes alone. We work with finance, IT, and licensing owners to keep their Microsoft Dynamics 365 environments compliant, efficient, and cost-effective—before and after the January 2026 enforcement.

Our expertise includes:

  • Conducting licensing audits and compliance reviews Get a clear picture of who’s using what, where you’re over- or under-licensed, and where you’re exposed.
  • Optimizing license allocation with Microsoft tools Use PPAC, LCS, and telemetry to right-size licenses to actual usage, not assumptions.
  • Designing licensing strategies that scale with the business Align license types and models to your growth plans, org structure, and operating model.
  • Planning Enterprise Agreement renewals and managing costs Model scenarios, anticipate Level A pricing, and avoid surprises at renewal.

All of this is guided by a structured Microsoft Dynamics 365 licensing guide and proven best practices—so you can reduce risk, control spend and keep your users working without interruption.

Don’t Wait for the Deadline to Become the Problem

These changes are Microsoft’s way of tightening and clarifying how licensing really works—but the impact on your business depends entirely on how prepared you are. A phased rollout and extended timelines don’t remove the risk; they just give you a chance to get ahead of it.

Large organizations running Microsoft Dynamics 365 Finance and Supply Chain Management still face complex licensing structures, hidden costs, and real compliance pressure. Waiting until January 2026—or until your renewal date hits—means reacting under time pressure instead of shaping the outcome.

A structured licensing review now can turn this from a compliance headache into an opportunity to clean up access, control spend and protect business continuity.

Contact us for a licensing assessment and a tailored compliance plan aligned to your renewal schedule—before enforcement decides the timing for you.

Dynamic-Knowledge-Base

    Frequently Asked Questions (FAQs)

    Enforcement begins on January 15, 2026, and will be rolled out based on contract renewal cycles. Users without a valid Microsoft Dynamics 365 Finance and Supply Chain Management license will lose access after the grace period.

    Early planning is critical: it includes reviews of user access, streamlining active accounts, implementing least-privilege security, and aligning license renewals through a Microsoft Dynamics 365 licensing guide to enable informed, compliant deployments.

    Microsoft will eliminate the tiered Enterprise Agreement discounts, block unlicensed users, require small organizations to move to CSP, and nonprofits may get fewer free grants-all which affect costs and compliance strategies.

    User-based, role-based, and module-based licensing provide different access and flexibility levels. Thus, choosing the right model ensures cost efficiency, compliance, as well as alignment with business growth needs.

    Expert guidance is recommended because complex licensing structures mask costs and compliance risks. Most enterprise customers require audit support, allocation optimization, and renewal planning to remain compliant and cost-efficient ahead of January 2026.

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