A comprehensive guide to understand the Power Platform licensing and making it more approachable.

(Power Apps, Power Automate, PowerBI, Power Apps Portal, Power Pages, Power Virtual Agent, AI Builder and Dataverse)

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 revised on September 1, 2022 to include latest license and product changes in Power Automate and Power Pages, and again on November 22, 2022 to include updated information on Power Pages.

Downloadable Guide Available

Power Platform Licensing Guide

Download our comprehensive guide to determine which licenses are a good fit for your automation scenarios and learn more about Power Platform’s powerful capabilities.

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 Power Apps and PowerAutomate 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.

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 / no-code 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.

power platform chart

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.
  • Power Pages (formerly known as Power Apps 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 Agents 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 Power Apps, 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.

Not sure where to start or need a hand getting a project off the ground? Book a free discovery call with our Power Platform experts

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.

  • Power Apps 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 Power Apps.
  • 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 okay 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

Unlike the other component of the Microsoft Power Platform, PowerBI licensing 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 through 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.

Power Apps Licensing

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

  • Power Apps Canvas: Canvas apps are free form apps where you can leverage your creativity to create web or mobile applications. Power Apps Canvas which uses standard connectors are free to use in your Microsoft Office 365 environment. The list of standard connects can be found at this link.
  • Power Apps 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.
  • Power Apps Pages: Pages 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. Power Apps Pages are not new but instead a rebranding of the Dynamics Portals (formerly Power Apps 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 Power Apps 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 Power Apps licensing. Power Apps premium licenses are available in three versions.

  • Power Apps 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 oneapplication. 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 perapp 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).
  • Power Apps 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.
  • Power Apps Consumption-Based Plan - “Pay-As-You-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 Power Apps 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)

Power Pages (formerly Power Apps Portal)

Power Pages is Microsoft’s low code platform to create and manage data driven public facing web sites. In other words, Power Pages is a low-code, data-centric business website developer leveraging Dataverse.

With Power Pages, you can create web site that are anonymous and/or secured:

  • Once you license a Power Apps per-user plan or license Power Pages, you automatically get the right to create a site (portal) to enable interaction with anonymous or external users.
  • If you need more than one portal, you can purchase rights for more capacity. Capacity is defined as page views for anonymous scenarios and per-login for authenticated scenarios.
  • Each portal comes with a predefined number of logins and page views.

Previously the Power Portal was expensive to license, and we are happy that Microsoft has streamlined the licensing and made it more affordable.

So, how do you estimate the cost of a Power Pages? Let’s look at a few scenarios.

  • Anonymous web sites: This is licenses on a per-visitor basis. You need to estimate your number of visitors and buy packs of “visitors/months”
  • Authenticated users: If you need to authenticate users and interact with data, you need to license each logged in user. The pack is on a per-user/per-month basis, so if you need 100 users login/month, you need to buy a pack of 100 users/month which is the minimum capacity.

Pay-as-you-go: If you are not sure and just starting out, you can pay as you go. This is metered, based on consumption, and can get pricey quickly.