Perplexed About Multiplexing? You're Not Alone.

What is Multiplexing?

The term "Multiplexing", relating to software licensing, has been around for many years. In recent years, it has become more of a concern for software vendors, with the emergence of new integration technologies, cloud computing, and a truly digitally unified world. It rightfully should be a concern for software vendors, it only makes sense that if a company develops licensable, in-demand software that organizations that would want to leverage it, pay for it. But what does multiplexing mean with respect to Microsoft licensing?

In Microsoft’s licensing guide, multiplexing, as it relates to Dynamics 365, is defined as follows:

“Multiplexing refers to the use of hardware or software that a customer uses to pool connections, reroute information, or reduce the number of devices or users that directly access or use the Dynamics 365 service. Multiplexing does NOT reduce the number of SLs of any type required to access the Dynamics 365 service. Any user or device that accesses the Dynamics 365 service —whether directly or indirectly—must be properly licensed.”

Scary stuff, does that mean I have to license every person that uses my portal because it is connected to Dynamics 365? No. Can it be a little confusing? Yes.

What Are the Licensing Requirements?

The key phrase is “Multiplexing does NOT reduce the number of SLs of any type required to access the Dynamics 365 service” which implies that you cannot circumvent licensing by multiplexing. The next question that should come to mind is what are the licensing requirements? Licensing is everyone’s favorite topic, I know I love sitting down for a lunch with a great customer and talk about licensing with them, it really sets the mood 😊.

Microsoft states that

“Dynamics 365 SLs are required for users or devices that directly input, query, or view data from the Dynamics 365 service. Similarly, Dynamics 365 SLs are required for users or devices that input data into, query, or view data from the Dynamics 365 service through a pooling device. Pooled connections use a non-interactive user account in Dynamics 365 that can access the system but only via the web service layer. Internal users and devices accessing Dynamics 365 data indirectly through a portal or via an API to a separate service such Microsoft Outlook must also be properly licensed, regardless of if they are set up as a Dynamics 365 user in the service.”

Users Inside and Out

Simply put, if an internal user accesses data for any operation, they need to be licensed for the software they use to access it as well the underlying software that the data is originating from or integrating to. Of course, licensing wouldn’t be much fun if there were not other small nuances to each scenario you may find yourself in but the key term here is “user”. In this statement “user” appears to be very generic as we all have different ideas of what a user is. Let us look at how Microsoft defines their users.

In Microsoft’s licensing guide, an “External User” is defined as follows:

“External users are not employees, contractors, or agents of the customer or its affiliates (i.e. a separate company, an independent contractor). External users are end customers and third-party users of the organization or its affiliates and do not require SLs to access Dynamics 365”

“In addition, external users include off-site vendors not on an employee-like relationship with the organization or its affiliates (e.g. IT help desk support vendors serving multiple customer organizations).”

There is no clear definition of what an internal user, or “user”, is in the licensing guide but one could conclude from their definition of an External User that Internal users are “employees, contractors, or agents of the customer or its affiliates”. In other words, someone who is on the payroll.

What Does This Mean for My Portal Project?

Being in the portal business and being experts in what we do, we regularly communicate with Microsoft on licensing to be sure that we get it right. We are a Microsoft Gold Partner and we want to make sure that we fall within the licensing guidelines. If we look at the following key points it becomes a lot clearer:

• Multiplexing does NOT reduce the number of SLs of any type required to access the Dynamics 365 service.
• Dynamics 365 SLs are required for users or devices that directly input, query, or view data from the Dynamics 365 service.
• External users are end customers and third-party users of the organization or its affiliates and do not require SLs to access Dynamics 365.

By these definitions it’s clear that association members, students, consumers, vendors, or anyone else outside of your organization do not need to have a Dynamics 365 license to use your portal.