I have to start with a warning:

Firstly:

The following is a guide only, it is intended to give you only a brief high level understanding of the different models and items you should consider.  I am not a licensing specialist. Please contact your licensing specialist for formal licensing information and I highly recommend that you read the documentation below (always make sure you have the latest version).

Secondly:

I tried to make this simple, I’m not convinced I have achieved this, I’d appreciate your feedback on how this can be improved.

Introduction

I have tried to copy the salient points from various licensing documents so that I have a quick reference for my licensing needs. I will try to keep this article and FAQ’s up to date (please feel free to submit questions). This article is largely a summary of information from the following three documents:

1. The CRM Licensing guide explains the details around licensing:
2. The Product Usage Rights has more information about the Server/Cal model usage rights
3. The Microsoft license Advisor tool can provide you with guideline pricing

For the purpose of this article I am going to split Microsoft licensing into two aspects:

1. The program under which a licence in is purchased (this dictates the price that is paid).

• For Customers these programs are:
  • Small Businesses (Fewer than 250 licenses):
    • Open License
    • Open Value
    • Open Subscription
    • Microsoft Online Services
  • Midsize and Large Businesses (250 or more licenses)
    • Enterprise Agreement
    • Enterprise Subscription Agreement
    • Select Plus
  • There are special programs for customers in the following industries:
    • Government
    • Health
    • Education
    • Charity
• For Partners these programs are:
  • Independent Software Vendor (ISV)
  • Services Provider License Agreement
  • Microsoft Partner Network

2. The type of licence that is purchased (this dictates how the licence can be used)

• Microsoft Dynamics CRM Sever (On Premise):
  • Microsoft Dynamics CRM 2011 CAL (User & Device)
  • Microsoft Dynamics CRM 2011 Employee Self Service CAL (User & Device)
  • Microsoft Dynamics CRM 2011 External Connector
  • Microsoft Dynamics CRM 2011 Full Use Additive CAL (User & Device)
  • Microsoft Dynamics CRM 2011 Limited CAL (Users & Device)
  • Microsoft Dynamics CRM 2011 Limited Use Additive CAL (User & Device)
  • Microsoft Dynamics CRM Server 2011
• Microsoft Dynamics CRM Online:
  • Dynamics CRM Online Per User
  • Dynamics CRM Online Extra Storage
  • Dynamics CRM Online for Step Up (aka USL for SA)
• ISV, SPLA, MPN
  • These licence models are beyond the scope of this article as they are not intended for customers.

CRM 2011 On Premise

Employee Self Service CAL – The Employee Self Service (ESS) CAL provides a user with limited API access and limited read-write access to “Microsoft Dynamics CRM functionality” through any application/graphical user interface (GUI), other than the Microsoft Dynamics CRM client.

Limited CAL – The Limited CAL provides a user with full read access and limited write access to “Microsoft Dynamics CRM functionality”. Users may view or query CRM data.

Full CAL – The CAL provides a user with full read-write access to all capabilities within Microsoft Dynamics CRM 2011 and consists of Employee Self Service CAL, the Limited Use Additive CAL, and the Full Use additive CAL, combined to provide full “Microsoft Dynamics CRM functionality”.

Limited Use Additive CAL – The Limited Use Additive CAL provides a user with full read-access and limited write-access functionality using any client, and may only be purchased to supplement an ESS CAL, for Users who may later require full read and limited write access.

Full Use Additive CAL – The Full Use Additive CAL provides a user with full write-access functionality, and may only be purchased to supplement a Limited CAL, for Users who may later require full read and write access.

Administrative Users – Microsoft Dynamics CRM Server 2011 allows for up to two separate devices or users to access instances of the server software only to administer those instances, which do not consume CALs. Microsoft Dynamics CRM Workgroup Server 2011 allows for separate management or administrative users of the server software, which do not consume any of the 5 users permitted with Workgroup.

External Connector –  The Microsoft Dynamics CRM 2011 External Connector enables customers to extend Microsoft Dynamics CRM to their external users such as customers, partners, suppliers, and end users who access a copy of the server software (for which a license was acquired), through any application/graphical user interface (GUI), other than the Microsoft Dynamics CRM client. “External Users” are users who are not either (i) your or your affiliates’ employees, or (ii) your or your affiliates’ onsite contractors or agents, External users also does not include hosted-software service users, such as those already licensing via the Microsoft Service Provider License (SPLA). An External Connector must be purchased for each server that permits access to Dynamics CRM 2011 server software by external users. External users should not be using the Microsoft Dynamics CRM 2011 applications & GUIs directly.

For full details on exactly what you can and cannot do please refer to page 12 of the CRM Licensing guide.

However below is a brief summary for CRM On Premise:

Use Right	ESS /CAL	Limited CAL	Full CAL	External Connector
Create records via API	Yes	Yes	Yes	Yes
Update records via API	Yes	Yes	Yes	Yes
Append records via API	Yes	Yes	Yes	Yes
Delete records via API	No	Yes – if owned by user	Yes	Yes – if owned by user
Assign records via API	No	Yes – if owned by user	Yes	Yes – if owned by user
Share records via API	No	Yes – if owned by user	Yes	Yes – if owned by user
Create records via CRM Client	No	Yes	Yes	No
Update records via CRM Client	No	Yes	Yes	No
Append records via CRM Client	No	Yes	Yes	No
Delete records via CRM Client	No	Yes – if owned by user	Yes	No
Assign records via CRM Client	No	Yes – if owned by user	Yes	No
Share records via CRM Client	No	Yes – if owned by user	Yes	No

* There are some intricacies around custom Entities, Dashboards, Dialogs etc. Please refer to the CRM Licensing guide and Product Usage Rights for further information.

CRM Online

User Subscription License – The User Subscription License (USL) grants users non-perpetual rights (with no buy-out rights) to the use of Microsoft Dynamics CRM Online service. The license includes access to the default Microsoft Dynamics CRM Online instance included in the subscription, and every Microsoft Dynamics CRM Online additional instance associated with the same subscription account.

Step-Up user subscription license – A Step-Up user subscription license (also referred to as USL for SA) allows customers who purchase or have previously purchased perpetual software licenses (Client Access Licenses and Software Assurance) to migrate to Microsoft Dynamics CRM Online. The license includes access to the default Microsoft Dynamics CRM Online instance included in the subscription, and every Microsoft Dynamics CRM Online additional instance associated with the same subscription account.

Additional Instance add-on licenses – Additional Instance add-on licenses provide flexibility for a customer to add one or more production-ready Microsoft Dynamics CRM Online instances to an existing Microsoft Dynamics CRM Online subscription. Each additional instance add-on license includes 1 unit of Microsoft Dynamics CRM Online instance only. Additional Storage add-on licenses provides flexibility to increase the storage capacity associated with a Microsoft Dynamics CRM Online subscription. A Microsoft Dynamics CRM Online subscription

MSDN

I get so many questions about licences for development and test environments I thought it merited its own section. The ability to install development and test environments is covered by the MSDN subscription program.

The following is an excerpt from MSDN licensing:

MSDN subscriptions are licensed on a per-user basis. One person can use the software to design, develop, test, or demonstrate his or her programs on any number of devices. An MSDN subscription also allows the licensed user to evaluate the software and to simulate customer environments in order to diagnose issues related to his or her programs.

MSDN subscriptions are only offered per individual, there are no “team” subscriptions or sharing of subscription benefits.  You should select the right MSDN Subscription for each person on your software development team based on the software that person needs to use and the support benefits required. Remember that team members who install the software (such as IT Professionals who install software for a test lab) will also need an MSDN subscription.

Many MSDN subscribers use a computer for mixed use—both design, development, testing, and demonstration of your programs (the use allowed under the MSDN subscription license) and some other use.  Using the software in any other way, such as for doing email, playing games, or editing a document is another use and is not covered by the MSDN subscription license.  When this happens, the underlying operating system must also be licensed normally by purchasing a regular copy of Windows such as the one that came with a new OEM PC.

When software development projects are nearing completion, an MSDN subscription license also allows your end users to access the software to perform acceptance tests on your programs. With Visual Studio 2012, your end users can also provide feedback on your programs using the Feedback Client for TFS.

Need the full details?  Download the Visual Studio 2012 and MSDN licensing white paper

Frequently Asked Questions:

1. Does an administrator user need a licence?
   • Microsoft Dynamics CRM Server 2011 allows for up to two separate devices or users to access instances of the server software only to administer those instances, which do not consume CALs.
2. Do I need a licence if I have a custom or external application querying the CRM database?
   • Yes you will need a full call, ESS or external connector depending on your circumstances.
3. Do I need an external connector for CRM Online?
   • No the External Connector is only applicable for on premise installations
4. Can I have multiple instances for CRM Online?
   • Yes you can create multiple instanced for development and test and you pay a single fee per instance.
5. Is there a Read Only license for CRM Online?
   • No, there is no read only or limited CAL. The administrator can configure the security roles to enforce read only rules.
6. Is the CRM Sever licence per CPU or per server?
   • Per server that runs Microsoft Dynamics CRM 2011.
7. Will I need to licence each server that has a CRM role installed?
   • Yes if you install CRM server roles across multiple servers (e.g. Async service, Sandbox Processing, etc) then each server will need to be licensed.
8. What is the difference between Workgroup server and CRM Server?
   • Server: Multi Tennant and unlimited users
   • Workgroup: Maximum of 5 named User licenses and only 1 organisation
9. Can an employee be licensed under External connector if they do not use a Microsoft CRM client?
   • No, External Users  are users who are not either (i) your or your affiliates’ employees, or (ii) your or your affiliates’ onsite contractors or agents
10. Do I need software assurance?
    • You need software assurance if you want to receive future versions and upgrades for free. Customers with expired Software Assurance or Maintenance will need to purchase Microsoft Dynamics CRM 2011 under standard pricing programs, and license it in the same way as would a new customer.
11. Do I need a licence for development, testing or UAT?
    • You will need MSDN licensing to cover development, testing and UAT
12. Does the Microsoft CRM Server licensing include the underlying operating system and required software (SQL)?
    • No you will need licences for the operating system and related software such as SQL sever. Please refer to the related PUR for each product to ensure compliance
13. Can I run an earlier version of the software?
    • Yes if you have the latest version of the software you can run earlier versions
14. Do I need a licence for Disaster Recovery?
    • You need Software assurance for the following benefits. For each instance of eligible server software you run in a physical or virtual OSE on a licensed server, you may temporarily run a backup instance in a physical or virtual OSE on a server dedicated to disaster recovery. The license terms for the software and the following limitations apply to your use of software on a disaster recovery server
      • The server must be turned off except for (i) limited software self-testing and patch management, or (ii) disaster recovery
      • The server may not be in the same cluster as the production server
      • You may run the backup and production instances at the same time only while recovering the production instance from a disaster.
      • Your right to run the backup instances ends when your Software Assurance coverage ends.

If you have any questions please leave a comment and I’ll do my best to answer them.

NOTE: Please contact your licensing specialist for formal licensing information and I highly recommend that you read the documentation outlined in the introduction (always make sure you have the latest version).

This posting is provided “AS IS” with no warranties, and confers no rights.

Next Week on Mark Margolis’s Blog: A Sample Microsoft CRM 2011 Demo Script