Blog Post Co-Writer

This blog post was written in conjunction with Matthias Leplae. He reached out to me inquiring about my past D365FO licensing blog posts and asked why I hadn’t written about license multiplexing and to be honest it was a topic I knew about but had stayed away from because of the complexity of it. Luckily Matthias helped with this tough topic and helped write/edit the post below.

What is License Multiplexing?

Microsoft defines multiplexing as “…when individuals use hardware or software to pool connections, reroute or indirectly access information, and/or reduce the number of devices or users that directly access or use a product.”

What this means is that if you are intentionally or inadvertently reducing your user licensing numbers by reusing logins or exposing Dynamics data to another platform or users without proper licensing then that would be considered multiplexing and would be breaking your agreement with Microsoft. As mentioned in the Dynamics 365 licensing guide, multiplexing does not reduce the number of required subscription licenses.

When does Multiplexing occur?

Organizations run their core operations such as finance, logistics or warehouse management on Dynamics 365. To fully integrate business processes, many applications will read or update master data or transactional data in batch or real-time. Some examples of multiplexing:

  • Warehouse workers receiving goods and scanning them with a barcode scanner application that is integrated with Dynamics 365.
  • Using Dynamics 365 data for a non-Microsoft data visualization tool.
  • Syncing your organizational master data from your finance system to your Dynamics 365 system.

How Does it Impact Licensing?

If a user is interacting with Dynamics 365 data that was delivered to them from some automated process (for example Power Automate), they must be appropriately licensed in the source system where the data resides. However, if each step in the process is manually performed, they do not need any additional license. Let us look at the examples from the Microsoft multiplexing documentation to see how this works:

The biggest takeaway from the above examples, is that if there is any automation in your processing of the data then any user consuming that data must have the appropriate license to perform that task in the source system.

The second takeaway from this is that because of the integration and convergence of Dynamics 365 products it is almost impossible to license end users correctly. This is because it is so easy to move data between systems that its very difficult sometimes to know where a piece of data originally came from.

Why Multiplexing is such a Big Deal in the Cloud?

Because of Microsoft moving Dynamics 365 products into the cloud, they now have access to telemetry data for customers. This allows them to validate your license agreement to your actual license usage. The term ‘license enforcement’ is a real thing and is being implemented in more and more Microsoft products. It is safe to assume the days of ‘honor system’ licensing are numbered.

How Can We Address Multiplexing in Our Own Environments?

The first thing to do is to map out which applications are integrated with your Dynamics 365 systems and understand how data moves between your systems. This will show where data originates from and where it is being consumed and can help you understand which licenses are required depending on the functionality being used. This will help you understand the potential license risk you are up for. If you have a clear view on the liability, you can use this as input for your negotiations with Microsoft to address and mitigate the risk.  Once that is completed then the next steps are looking for ways to reduce licensing costs and ongoing maintenance of your user licensing. Reducing licensing costs can be as simple as validating that a user needs access to a particular feature/function or data set and removing access where they do not. And from an ongoing maintenance perspective be sure that before you add in a new feature or functionality to determine where the data is coming from and how that would impact your user licensing.


Microsoft Multiplexing Overview

Microsoft Dynamics 365 Licensing Guide

Why Power Platform Licensing is Complex Part 2: Multiplexing