An updated guide to Power Platform licensing (PowerApps, Power Automate, PowerBI, PowerApps Portal, Power Virtual Agent, AI Builder and Dataverse [AKA Common Data Services “CDS”])

In this blog post, we outline and describe a comprehensive guide to understanding the Power Platform licensing and making it more approachable. I spent a lot of time dissecting the licensing details and providing some common use cases and decision points, so I hope you will find this guide timely and useful.

This guide was first updated as of November 2020, including the latest announcements and changes coming from the PowerApps for Teams (formerly known as Project Oakdale, and now Dataverse for Teams).

This guide is updated again as of January 2022, with the latest license changes and additions.

Why Do We Need a Guide for Licensing?

As is the case with Microsoft licensing, you often need a Ph.D. in quantum physics to make sense of this maze of products and the interaction between said products. Many readers may think PowerApps and Power Automate are part of Microsoft/Office 365 and, therefore, free to use. While this is true for some scenarios, it isn’t if you want to take advantage of the numerous advanced features of the platform.

This blog post is based on the Microsoft Power Platform licensing guide, which you can find at this link (fair warning, it is about 28 pages). To better understand the licensing and its complexity, it is essential to remember that the Power Platform originated from the Microsoft Dynamics product group and was later adapted and integrated into Microsoft Office 365. A good history of its capabilities and how it became the Power Platform can be found in this blog post from James Phillips, President of Microsoft Business Applications.

What Is The Power Platform?

The Power Platform is Microsoft’s low code / nocode platform that answers the need to rapidly create powerful business applications, analyze data, automate processes and create virtual agents all in one platform to meet today’s business challenges. At the core of the platform are several products:

  • Power BI is the oldest component of the platform that helps an organization make informed, confident business decisions by putting data-driven insights into everyone’s hands.
  • Power Apps is Microsoft’s low code / no-code application development platform that turns ideas into organizational solutions by enabling everyone to build custom apps that solve business challenges.
  • PowerApps Portal is Microsoft’s low code extranet platform that enables external access to create extranet websites.
  • Power Automate (AKA Flow) is Microsoft’s workflow tool that boosts business productivity to get more done by giving everyone the ability to automate organizational business processes.
  • Power Virtual Agent is Microsoft’s no-code platform that creates chatbots to engage conversationally with your customers and employees.
  • AI Builder is Microsoft’s Artificial Intelligence (AI) toolkit that extends the Power Platform and integrates with PowerApps, PowerBI and Power Automate and provides no-code AI and Machine Learning (ML) capabilities.
  • Dataverse (AKA Common Data Services “CDS”) is Microsoft’s Cloud database technology. Microsoft Dataverse is the data backbone that enables people to store their data in a scalable and secure environment dynamically.

What Do You What Do You Get With Microsoft/Office 365?

Microsoft’s strategy for Microsoft/Office 365 has always been to provide a comprehensive platform to allow ease of use and customization. As a result, as part of Microsoft 365, Microsoft includes some of the capabilities found in the Power Platform. If you are licensed for Microsoft 365 (Business or Enterprise plan), you get the following capabilities included as part of your license.

  • PowerApps for right “seeded” capabilities, including the ability to create Canvas applications with standard “free” connectors.
  • Power Automate for rights “seeded” capabilities to execute flows within the daily API limits that leverage standard “free” connectors.
  • Dataverse for Teams, AKA a scaled-down version of the Common Data Services (formerly Project Oakdale), is used to build rich applications running inside Microsoft Teams within the size and constraints limits.
  • Power Virtual Agents for Teams, AKA a scaled-down version of Power Virtual Agents, runs inside the Microsoft Teams client.
  • Ability to customize SharePoint/Microsoft lists using PowerApps.
  • Power BI professional if you have Microsoft Office 365 E5 or Microsoft 365 E5.

Most of you may ask, why would I need more? This depends on your needs. You will often require additional licenses if you need to use an App or Flow that requires a premium connector. Since 2019, Microsoft reclassified the connectors and now most of the more advanced connectors have been classified as Premium. (Example: Any connection that requests an API or call to a web service, SQL connectors, Dynamics connectors and Azure connectors). So how do you decide? If your Application or Flow needs to connect to data stored in Office 365, in most cases, you will be ok with the seeded licenses. Still, any time you will need to connect to a system outside of Office 365, you will need to consider purchasing additional licenses (more to come below).

There is, however, one exception, if you are building an app with the new Dataverse for Teams, calling API from this app is now included.

So, when you find yourself needing more, below is a guide to more advanced scenarios.

Power BI Licensing

Power BI licensing, unlike the other component of the Microsoft Power Platform, is straightforward. Power BI comes in three editions:

  • Free: limited to building reports and dashboards for yourself and embedding them in the Dataverse for Teams.
  • Professional: the ability to share reports and dashboards in your organization thru the Power BI service and embed into any applications within the capacity limit. Power BI Professional is licensed per user and costs $10/user/month (included if you have Office 365 or Microsoft 365 E5).
  • Premium: For an organization with many users where licensing per user would become cost-prohibitive and for organizations with large reporting needs, organizations with the need for larger capacity and dedicated compute capacity. Power BI Premium can be purchased on a per user basis ($20/user/month) or in dedicated scenarios starting at $4,900/month, so most organizations under 500 users would likely choose the per user pricing.

PowerApps Licensing

PowerApps licensing has changed many times over the past three years. Unfortunately, it is more complicated than ever. So PowerApps comes with three distinct user interfaces:

  • PowerApps Canvas: Canvas apps are free form apps where you can leverage your creativity to create web or mobile applications. PowerApps Canvas that uses standard connectors are free to use in your Microsoft Office 365 environment. The list of standard connects can be found at this link.
  • PowerApps Model Driven: Model Driven are apps that are driven by data and a component-focus approach to app development. Unlike Canvas apps, the design is limited to predefined layouts and components. For those familiar with the Dynamics CRM platform, model driven apps are the technology used for Dynamics CRM apps and Customer Engagement applications.
  • PowerApps Portals: Portals address the need to create externally-facing web portals like communities, customer services portals and many more with various ways to identify users or browse content anonymously. PowerApps portals are not new but instead a rebranding of the Dynamics Portals.

To learn more or run a scenario by me directly, please book a meeting here.

So, if you are in need to buy licensing for PowerApps because you need larger capacity, require a premium connector, need to build a model-driven application (instead of just Canvas apps), need to build a portal or just a more complex application, you must purchase PowerApps licensing. PowerApps premium licenses are available in three versions.

  • PowerApps Per App Plan
    • Don’t be fooled by the title; although this is per app, this is still licensed per user per app with a maximum of one application. For example, you may have 30 applications in your tenant, but a portion of your users’ community only needs access to one of those applications. In this case, you can license a part of your users based on a per app model.
    • Enabled rights to use the Dataverse CDS as a data source with basic capacity.
    • Cost is $5/user/per app/month (includes up to one individual app).
  • PowerApps Per User Plan
    • Allows an unlimited number of apps, licensed per user per month.
    • Enabled rights to use the Dataverse CDS as a data source with larger capacity.
    • Cost is $20/user/month.
  • PowerApps Consumption-Based Plan – “Pay-AsYou-Go”
    • This is a new plan and exciting for organizations not yet ready to fully commit to user-based licenses.
    • In this scenario, the licenses are dynamically billed on per active users/month.
    • For instance, if your organization has 1000 users but only 100 average use the app monthly, you can leverage the pay as you go plan and pay for active monthly users.

Summary of PowerApps Licensing Options

PLAN $5/user/app/month $20/user/month $10/active/user/app/month
POWER APPS FEATURE Run one app or portal per user stacking licensing for access to each additional Run unlimited apps and portal per user for one monthly fee per user/month Use an Azure Subscription to pay per user based on the number of unique apps or portals a user runs each month
Includes 250 AI Builder Services credits per month Includes 500 AI Builder service credit Requires an Azure Subscription
DATAVERSE CAPACITY 50MB per use capacity in Dataverse 250MB database capacity in Dataverse 1GB database capacity
POWER AUTOMATE RIGHTS All rights including, premium connectors using asynchronous and synchronous features

Example for Pay-As-You-Go Scenario

Active Users Month 1 Month 2 Month 3
App A
App B
App C
9 = 9 different users each active in one app 0 apps had
active usage
6 = 2 users each active in 3 apps
Month 1 Month 2 Month 3
App A 2 active users 0 active users 2 active users
App B 3 active users 0 active users 2 active users
App C 4 active users 0 active users 2 active users
(9 x $10/active user/app)
(0 x $10/active user/app)
(6 x $10/active user/app)

PowerApps Portal

  • Once you license a PowerApps per user plan, you automatically get the right to create a portal.
  • If you need more than one portal, you can purchase rights for more capacity.
  • Each portal comes with a predefined number of login and page views.

You can find more information at this link.

Power Automate Licensing

Like PowerApps, you may find yourself needing more than the seeded use rights you get with Office 365. Power Automate can be extended to add more capacity, higher limits and access to premium connectors. Here is how it works:

  • Power Automate Per User Licensing
    • This allows individual users to create unlimited flows based on their needs and include premium connectors.
    • License is required to activate the flow, which means that technically if one user creates a flow, and someone else activates the flow (through a trigger), they also need to be licensed either individually or through a per-flow plan.
    • Cost is $15/user/month.
  • Power Automate Per User with Attended RPA
    • If you need attended RPA (use of UI Flows). 1 bot at a time.
    • Includes 5000 services credits for AI Builder.
    • Cost is $40/user/month.
  • Power Automate Per Flow Plan
    • This allows unlimited users to use a flow.
    • There is a minimum of 5 flow purchases.
    • $100/flow/month (with a minimum of $500/month).

But hang on … How about an application built with PowerApps that triggers a flow? Microsoft has a solution for this, and in this case, licensing PowerApps allows the use of a flow as long as the flow is executed in the context of the application. (Don’t ask me what this means because I am not quite sure how this is going to be enforced). This is covered in more detail in the Power Automate Licensing guide on Page 13 – Power Automate user rights included in Power Apps licenses.

So, when do you need per attended with attended RPA licensing? This is only required if you plan to leverage the new UI Flows, AKA Robotic Process Automation flow that leverages the new Power Automate Desktop (formerly known as WinAutomation).

Lastly, regarding building flow, there is also another option in leveraging Azure Logic Apps; few of you may know that Azure Logic Apps share the same engine in the backend and, for the most part, have the same capabilities. Except Logic Apps only costs you on a per consumption basis, which depending on your flow, may be very cost-efficient (Note: you can export a Flow from Power Automate to Logic Apps and vice versa).

Power Virtual Agent Licensing

Power Virtual Agent, “PVA,” does have a seeded version for Office 365 users except for Dataverse for Teams, which includes the right for PVA. If you want to use Power Virtual Agent, be aware of the licensing requirements. It comes in two editions:

  • PowerVirtual Agent for Teams:
    • This comes at no cost but has limited capabilities.
    • 2000 sessions/tenant/month.
  • Power Virtual Agents Capacity Pricing:
    • Create and maintain internal or external facing bots, which cost $1,000/per month for 2000 sessions.

AI Builder

AI Builder is a great service component that allows infusing AI into your Applications and Flows. AI Builder is included in the Power Automate with attended RPA flow or can be purchased additionally.

In December 2021, Microsoft announced that Power Apps per app plan would receive an entitlement of AI Builder service at no cost.

  • AI Builder with Attended RPA
    • 5000 Service Credit
    • Included
  • AI Builder Capacity
    • 1M Service Credit
    • $500/month

While you think we are done, there are a few more things to cover!

Dynamics 365 Usage Rights for the Power Platform

If your organization is licensed for Dynamics 365, there is some good news. Dynamics 365 comes with user rights for Power Automate and Power Apps; this means you can potentially build additional applications and complex flows without the need to purchase additional licenses and even deploy a portal as long as the applications are created within the context (again, don’t ask me what this means and how this is enforced) of the Dynamics application and located in the same environment.

Dataverse Licensing

Dataverse is a fantastic cloud-based database will all features you will expect from a hosted database system including, relational data model, business rules, advanced security, backup/restore and full Application Lifestyle Management (ALM). Dataverse is not licensed independently but comes bundled with PowerApps, Power Automate or Power Virtual Agent with default capacity based on the plan selected.

Once licensed for PowerApps, your tenant will receive a based capacity (5GB or 10GB) and then each user license will incrementally increase the based capacity.

Additional capacity for Dataverse may be needed and can be purchased in increments of 1GB at $30/GB/Month of incremental space.

More about how to manage storage capacity at this link.

In Summary

I am a big fan of the Microsoft Power Platform. Over the past few years, I have helped countless organizations leverage this platform’s power to deliver rapid and innovative applications that drive better business outcomes. To ensure that you aren’t surprised, I recommend that you first gain a deep understanding of your needs and business objectives before jumping and building your applications – this may save you some surprises at the end that may drive up the cost.

Stay tuned for my next post, where I will expand on the capabilities of Microsoft Dataverse for Teams.

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If you want to learn more or run a scenario by me, please book a meeting.