Wednesday, October 27, 2010

External Connector for SPLA/Hosted CRM

Many of my customers are aquiring Dynamics CRM through the Service Provider License Agreement (SPLA) which more commonly is known as Partner Hosted. We are working closely with Hermelin IT-Partner ( for this service as they are an excellent provider of IT-infrastructure.

One of the licensing issues I have been discussing with Hermelin IT-Partner and Crayon, a Swedish Microsoft Licensing specialist partner, is how the External Connector is licensed for SPLA.

The External Connector is, as many of you probably know, a special license that is required to license external users to work with data in Dynamics CRM, without working with the normal GUI (requires full license). Despite the name, it just a license form and does not contain any code at all.

Typical scenarios where the external connector is required is for customer portals, case registrations by customers etc. where the portal or other software works directly with the CRM webservice or database. I have had extensive discussions with Microsoft concerning implicit information, like data warehouses and how these are to be licensed but have as of now only got the answer that as long as there is some interaction with the data, like drill-down, a license is required. If there are many users, the Application Platform Agreement is what is recommended. The external connector cannot be used in internal scenarios as it explicitly only gives accessrights to non-employees and the similar.

For an on premise solution, the external connector is typically priced in the area of €25 000 or $30 000 which is quite hefty and a very large pricetag for a small company making it more or less impossible to buy.

So, when working with Dynamics CRM licensed in SPLA, how does the license agreement work? Crayon sent us the following sections concerning this:

For Dynamics CRM 4.0 Service Provider :
You do not need a SAL for external users who access Dynamics CRM 4.0 without using Dynamics CRM 4.0 Client for Microsoft Office Outlook and Microsoft Dynamics CRM 4.0 Web Client software.  External users means users that are not (i) a customer’s or a customer’s affiliates’ employees, or (ii) a customer’s or a customer’s affiliates’ contractors and agents.

So, surprise, you don't need it at all! This is something I think is great since that really opens up the possibilities of really leveraging the full power of Dynamics CRM for our customers even the smallest with only a couple of users.

It also has some other implications, namely that a customer that currently licenses Dynamics CRM as on-premise via Volume Licensing or by renting the licenses and currently are using the external connector, really should start looking at moving to partner hosted since that will remove the quite hefty cost of the external connector. It typically also comes with a SA of about 1/3 the cost per year so it is an ongoing cost.

I hope that Microsoft will be harmonizing this with the rest of the "power of choice" so that it will be more reasonably priced also for on-premise solutions.

Gustaf Westerlund
CEO, Chief Architect and co-Founder at CRM-konsulterna AB


  1. External connector is only $5,000 on CRM 4.0.

  2. Shai,
    Interesting, that was not the price I received when I have been asking about this, I will contact our Licensing partner to get some updated information. What pricelist are you using?

  3. Shai,
    I have checked this with Crayon now at your figure seems right. I must have gotten an old number or missunderstood it.

    Crayon have indicated that the price for open value is in the area of €2000 / year and open license around €5000. Prices being very dependant on the licensing agreement the customer has with Microsoft.

  4. Hi Gustaf,

    I have very basic query to you, How to implement the External Connector. I can not find it in the CRM SDK.

    What i understand is that External Connector is a kind of license which can be used to access the data from external webpage, like portals. While creating the webservice, in the connection string i was passing my credentials (I am CRM user).. In the case of external connector what would be connection string. basically how to use the external connect, how to test it out whether it is licensed or not?
    Please help!

  5. Hi anonymous!
    You don't actually implement it. It is just a license form. If you want to have external users to access data in CRM you have to have this license. Which user you use is irrelevant and I usually create a user called "CRM Service" or similar and use this.

    There is also no software control of this license, it is based on legal terms, as many of Microsofts licenses are nowdays for the business software, for instance CRM Volume licensing.