A Guide to Navigating the Upcoming Licensing Changes for Dynamics 365

4 min read

On January 15, 2026, stricter license compliance will be enforced, requiring all users to have assigned licenses in Power Platform Admin Center (PPAC) to access Microsoft Dynamics 365 (D365) applications. This change will ensure that only authorised users with the appropriate license assignment can access or manage applications.

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Technology Enablement

What does this mean? Previously, many organisations operated with more users than officially licensed due to lax license enforcement. With these changes, all users requiring a license will need to be set up appropriately in PPAC upon initial user setup, reinforcing compliance and eliminating the need for license seat ‘true-ups’ retroactively with Microsoft.

Understanding the business impact

The upcoming licensing changes will have key business impacts:

Potential cost increases: With stricter enforcement, businesses may face higher licensing costs if they have been under-licensed in the past. It’s crucial to evaluate current licensing arrangements and budget for potential increases in licensing requirements.
Increased compliance requirements and administrative tasks: Businesses will need to ensure the appropriate licenses are assigned for each user, which may require a review of current user roles and permissions to align with the new requirements. This could change how some businesses manage user access and roles within D365 by adding additional administrative tasks in PPAC.

Preparing for the licensing changes

To navigate these changes effectively, businesses should:

Review current licensing: Conduct a comprehensive review of current licenses and user roles. Identify any gaps or discrepancies that need to be addressed to comply with the new requirements.
Utilise enhanced reporting tools: Leverage the new ‘User license level overview report’ available in PPAC or leverage the new LCS integration under ‘licensing and capacity’ to get the same reporting information from PPAC. These tools will provide valuable insights into license allocation and help identify areas for optimisation. Microsoft has also released user security governance features in public preview with D365 version 10.0.43, with reports like the ‘user activity aging report’ which can be used to identify inactive users for further licensing optimisation.
Train administrators and users: Make sure that administrators and users understand the upcoming changes and are aware of their roles in maintaining compliance. If needed, provide training on how to use the new reporting tools and manage licenses effectively.

Strategies to optimise licensing costs

To keep licensing costs low with these new changes, businesses can adopt several strategies:

Regular license reviews: Conduct periodic reviews of license usage to identify and address any areas for optimisation. Use tools like Fastpath Assure and D365 reporting to monitor and optimise licensing.
Optimise role assignments: Identify and focus on roles with few operations-licensed objects assigned to many users, then see if those objects can be omitted from the users’ access. This approach can lead to significant cost reductions by eliminating unnecessary high-cost licenses.
Leverage attach licenses: Attach licenses are typically less expensive and can be used for users who already have a full base license. Utilise attach licenses where possible to reduce costs.
Implement least privilege security: Apply the principle of least privilege by ensuring users have only access in the system they need to perform their daily functions. This can also help reduce the number of high-cost licenses required.
Customise security roles: Avoid assigning standard roles that may include unnecessary permissions driving higher license costs. Instead, design custom security roles that align with business needs while minimising licensing costs.
Engage expertise: Work with Microsoft partners like Protiviti to gain a deeper understanding of the changes and receive personalised advice on how to manage the transition smoothly.

The upcoming licensing changes to D365 could present both challenges and opportunities for businesses. By understanding the changes’ impact, preparing effectively, and adopting cost-saving strategies, businesses can maintain compliance without incurring excessive costs. Stay informed, leverage the available tools mentioned here and engage with Protiviti to be well-prepared for the transition.

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