Preparing your Microsoft D365 Finance and Supply Chain systems for 2026 and beyond: Insights from the Measure Manage Unify webinar 

As Microsoft Dynamics 365 users gear up for significant changes in licensing and capacity management enforced starting in 2026, organizations must proactively manage storage capacity, data strategy, and licensing to stay compliant and cost-efficient. Recently, John Boatman and I hosted an insightful webinar on this very subject, diving deep into capacity enforcement, licensing updates, and innovative archiving approaches. Here’s a comprehensive recap to help you prepare. 

Managing storage capacity: Practical strategies and tools 

Many clients currently exceed their storage allocations, particularly in transactional databases like Finance and Supply Chain Management. The webinar emphasized several strategies to manage and optimize usage: 

1. Understand your entitlements and usage 

Using the Power Platform Admin Center (PPAC), administrators can monitor total storage usage, including database, file, and log storage, broken down by environment and even by individual database tables. This visibility makes capacity management more tangible. 

2. Optimize cleanup routines 

Many organizations miss opportunities to reduce storage by running cleanup jobs effectively. For example, batch job history tables often consume excessive space and are ripe for pruning. 

3. Reduce sandbox storage 

Sandboxes typically mirror production environments, dragging along large volumes of data unnecessarily. Strategies include truncating tables or retaining only recent transactional data (e.g., last six months) in sandbox environments. 

4. Plan for growth 

Understanding your monthly data growth rates helps budget for additional storage or plan timely archiving interventions. 

5. Use storage extensions temporarily 

Microsoft allows three temporary 45-day storage extensions annually to give organizations time to clean up storage before enforcement actions kick in. 

Archiving solutions: Microsoft vs Sikich approach 

Microsoft archiving solution 

• Supports archiving of select transactional tables (inventory transactions, invoices, tax transactions). 
• Relies on Database Long-Term Retention (LTR) to sync data from transactional databases. 
• Limitations include slow performance, error-prone processing requiring Microsoft support, and needing retail configuration keys that may alter system behavior. 
• Custom field archiving requires entity extension, increasing complexity. 
• Database storage costs apply, which can be expensive (~$2 per GB per month). 

Sikich archiving framework 

To overcome Microsoft’s limitations, Sikich developed a flexible archiving solution designed to: 

• Archive and purge any table, including custom and extended fields, without requiring configuration keys or extensions. 
• Integrate smoothly with Microsoft functionality (e.g., inventory consolidation to reduce transaction volume before archiving). 
• Export archive data to Azure Blob Storage using efficient Parquet format, optimized for data lake consumption and cross-platform use. 
• Leverage “Bring Your Own Storage” model allowing organizations to control costs by choosing Azure Blob tiers (cool tier costs approx. $10/TB per month—much cheaper than database storage). 
• Provide predefined archival datasets (e.g., general ledger, inventory transactions) with built-in validation logic enforcing archiving only from closed financial periods. 
• Log telemetry and execution data to Azure Application Insights, providing transparency amid the phase-out of Lifecycle Services (LCS). 

Unifying archived and live data for reporting and analytics 

To address reporting concerns post-archiving: 

• Archived data stored in Azure Blob Storage can be ingested into Microsoft Fabric or Synapse Analytics through data pipelines. 
• Combining live transactional data (via Fabric or Synapse link) and archived data in a medallion architecture (Raw, Silver, Gold layers) enables unified reporting. 
• Power BI, Copilot AI, and Azure Machine Learning tools can then consume the unified dataset to provide comprehensive insights across historical and current data. 
• This external reporting approach ensures valuable archived data remains accessible without bloating costly transactional databases. 

Licensing and compliance: What you need to know 

• Enforcement is phased in starting January 15, 2026, linked to customer renewal dates. 
• Early notification (30 days prior) gives organizations time to remediate under-licensed users. 
• License assignments and security roles should be audited thoroughly to optimize license usage—often a chance to reduce costs. 
• Microsoft expects diligence; grace periods delay enforcement, but compliance ultimately is mandatory to avoid service disruptions. 

Frequently asked questions 

Q: If data is archived, can reports still be run using Synapse? 
A: Yes. Archived data in Azure Blob Storage can be ingested into Synapse and combined with live data to produce comprehensive reports without losing historical insights. 

Q: How does the archiving solution handle tables that are dual written to Dataverse and Finance & Operations? 
A: Archiving is possible but requires coordination to ensure updates from Dataverse are complete and that only finalized records (e.g., closed or invoiced) are archived to avoid data sync conflicts. 

Q: How reliable is Power Platform Admin Center (PPAC) licensing reporting? 
A: It is improving but currently somewhat inconsistent; it remains the best available tool, and organizations should prepare for some adjustments. 

Final thoughts and next steps 

With Microsoft’s capacity enforcement and license validation coming in 2026 for Dynamics 365, it’s critical to start reviewing your current storage usage, license assignments, and cleanup routines today. Leveraging archiving strategies—particularly flexible solutions like Sikich’s—can reduce costly database storage consumption and preserve historical data for reporting. 

Begin with a capacity review workshop, understand your entitlements, optimize cleanups, and explore archiving options. Also, tightly manage license compliance early to avoid end-of-term surprises. 

For those interested, Sikich offers capacity review workshops and archiving implementation services to help navigate these changes effectively. 

Resources and further reading 

• Microsoft Dynamics 365 Licensing Guide – December 2023 
• Power Platform Admin Center (PPAC) for storage and license monitoring 
• Microsoft Fabric and Synapse Analytics documentation for data lake integration 

This blog post summarizes insights shared during the Measure Manage Unify webinar recorded on December 11th. You can find the recording here.