Hosted Microsoft Dynamics – SPLA verses Subscription Licence – what’s the difference?


So first thing is to say is that Microsoft is a big organisation and like most large corporates, one division does not always work perfectly with another. Decisions are made within each division which are illogical when viewed from the outside and only understanding of the internal politics and the history, explains why.

The first way that Microsoft offered Dynamics NAV and CRM on a rental model was via SPLA (Service Provider Licence Agreement). When the whole cloud bandwagon started rolling in 2007 the then CEO of Microsoft decided that every single one of their products would now be available under this model and that included Dynamics. SPLA is run via a set of people responsible for boosting recurrent ‘cloud’ revenue with Microsoft and is nothing to do with the Dynamics team.

Dynamics within Microsoft have no direct control and have only recently had sight of SPLA customers and revenue (so don’t ask for deal/discount on SPLA). As a partner we report SPLA licence via a Microsoft LAR, distributor to the rest of us, with our usage of every other Microsoft product like Office, Windows Server, SQL and System Centre for instance.

With recurrent revenue becoming more popular the Dynamics team realised that they needed more control and so they introduced subscription licences in 2013. Yes it has the same model of monthly cost as SPLA but orders are placed by us direct with Microsoft and they do offer promotions and incentives (the recent 50%+20% if you are hosted on Azure and also on Office 365 is an example).

The other major difference is that you have to pay for customisation objects with subscription, but you get all you can eat in the user licence with SPLA. Heavily customised systems are better off on SPLA for this reason, those packs of ten tables and hundreds of pages, reports and code units etc. can quickly add up.

Both licences allow downward as well as upward changes in the number of users, so are similar in terms of flexibility.

Both are popular, although for us SPLA is still the biggest but I believe that’s historic. Most new customers are going onto subscription mainly due to the fact that its 70% off till June 2017. This obviously needs to be periodically reviewed as at the end of that subscription deal, SPLA may be the better option.

Remember the licence enables exactly the same software so it purely a matter of which ones cost you the least commercially. Do the comparison with your partner and pick the best option for you.