Power Platform Licensing Explained

Judging from the many questions we receive, there is a rapidly growing interest in using Microsoft’s Power Platform. The Power Platform allows you to automate business processes, create compelling data visualizations, build standalone apps, and create chatbots for embedding into your apps. We attribute that growing interest to the appeal these “low code, no code” applications – Power BI, Power Apps, Power Automate, and Power Virtual Agents – have to a growing number of users and the ever-increasing number of use cases for them.

Ironically, while more people are becoming knowledgeable about the Power Platform applications, understanding how to obtain or maintain the necessary licensing is increasingly complicated. Before we get into the licensing details, let’s be sure everybody has a common understanding of the Power Platform. Your organization’s specific use cases will affect the value you’re able to extract through the use of Power Platform.

Understanding the Power Platform

As you can see in the preceding graphic, Power Platform spans Office 365, Azure, Dynamics 365, and standalone applications. It comprises an ever-increasing set of data connectors that enable you to build apps to work with your line of business (LOB) systems, build powerful reports and dashboards, workflows, and bots.

Power Platform is comprised of four industry-leading business applications. Power BI allows you to connect to and visualize any data using a unified, scalable platform for self-service and enterprise business intelligence (BI) that’s easy to use and helps you gain deeper data insights. Basically, Power BI makes better, more fact-based decision-making possible.

Power Apps equips your team to quickly start building and launching apps using prebuilt templates, drag-and-drop simplicity, and quick deployment – and then roll out continuous improvements as needed. It’s capabilities scale by providing advanced functionality previously only available to professional developers, providing them with the tools to seamlessly extend app capabilities with Azure Functions and custom connectors to proprietary cloud or on-premises systems.

Power Automate, formerly Microsoft Flow, provides a low- or no-code capability to build time-saving workflows that automate tedious or repetitive tasks and leverage built-in AI capabilities, so your team has more time to focus on strategic, high-value opportunities.

Power Virtual Agents is the newest member of the Power Platform, empowering everyone to easily build intelligent chatbots to resolve common issues and answer questions around the clock. The easy-to-use graphical interface enables you to create and manage powerful chatbots without the need for code or AI expertise. You can easily integrate your chatbots with the products and services you use every day, choosing from hundreds of prebuilt connectors, building custom workflows using Power Automate, and creating complex scenarios with Microsoft Bot Framework.

In addition to the four products comprising Microsoft’s Power Platform, the Power Platform ecosystem contains connectors that enable you to work with literally hundreds of apps and devices in the cloud. Examples of popular connectors include Salesforce, Office 365, Twitter, Dropbox, and Google services.

AI Builder is a Power Platform capability that brings the power of Microsoft AI through a point-and-click experience and is directly integrated into Power Apps and Power Automate. It allows you to incorporate artificial intelligence into your apps, processes, and virtual agents.

Dataverse, formerly called Common Data Service (CDS), is a cloud-based database introduced by Microsoft’s Business Applications team to allow you securely store and manage data that’s used by your business applications. Dataverse offers you a base set of standard tables that cover typical scenarios. Still, you can also create custom tables specific to your organization and populate them with data by using Power Query. Power Apps has the connectors that enable it to make use of data contained within Dataverse easily. Microsoft Dataverse for Teams enables the rapid building of apps and intelligent bots within Microsoft Teams.

Advisicon’s clients are rapidly discovering the value Power Platform brings to addressing their most pressing business challenges. Whether it is timely access to reports and dashboards, creating apps, automating mundane business processes, or deploying chatbots, Power Platform can do it all. Today, Advisicon is developing and delivering solutions to our clients using all of the Power Platform. As we go through licensing considerations now, we will outline some of the solution frameworks we are deploying.

Licensing Guide

Microsoft’s licensing guide for Power Apps, Power Automate, and Power Virtual Agents was updated in December 2020. It is 28 pages long and quite complex. Licensing for Power BI is more straightforward and will also be discussed in this post. Plan to connect with us to understand the current licensing and how your organization can take advantage of Power Platform to maximize impact, productivity, and purpose in furthering your mission.

Creating and using Power Apps with Office 365

Limited Power Apps use rights are included to allow users to customize and extend Office 365 for productivity scenarios and to deliver a comprehensive low-code extensibility platform for Microsoft Teams. Your Office 365 licenses include “seeded” capabilities. This means you may create and run an unlimited number of canvas apps with any of the standard “free” connectors, comprising close to half of the available connectors at the time of this writing. Creation of Power Apps canvas apps starts with connecting your blank canvas with the Microsoft tools where your data resides, such as a SharePoint list, a Dataverse source, or a Power BI dashboard.

If you want to build a straightforward canvas Power Apps application that works with a SharePoint list as that’s a standard free connector, you’ve got those rights seeded into Office 365.

Power Apps with Dataverse for Teams

The following table indicates a complete list of Office 365 licenses that include Power Apps and Dataverse for Teams use rights. Dataverse for Teams is a built-in flexible datastore that provides data storage and a one-click solution for app deployment in Teams. Each Dataverse for Teams environment uniquely maps (1:1) to a Teams team and can store up to 1,000,000 records based on typical usage. Dataverse for Teams does not grant additional entitlements with standalone Power Platform licenses but supports premium functionality that comes with corresponding licenses. Example: In a given Dataverse for Teams environment, accessing premium connectors in the context of an app requires all users accessing the app to be licensed either by the Power Apps’ per app’ or ‘per user’ plans, depending on the customer scenario/needs.

Creating and using Power Apps with Dynamics 365

Just as with Office 365, limited Power Apps use rights are provided with Dynamics 365. You can run standalone canvas or model-driven apps, utilize standard and premium connectors within the same environment(s) as you have licensed Dynamics 365 enterprise applications. The specific use rights vary by D365 license type. Users with the D365 Sales Professional, Customer Service Professional, Team Member, HR Self Service, and Business Central Team Member licenses have capacity restrictions on their ability to create and/or access custom entities. They do not have standalone Power Apps Portals use rights while the enterprise license holders do.

Beyond the Basics with Standalone Power Apps Licensing

Generally, Office 365 or Dynamics 365 licensed users have limited rights to use up to two Power Apps that use standard connectors and stay within the authorizing platforms’ data environment. When you extend beyond that – more apps, premium connectors or an increased number of connectors, model-driven apps, increased database, file, or API capacities, you need to consider ‘per app’ or ‘per user’ licensing.

The ‘per app’ model allows individual users to run applications for a specific business scenario based on the full capabilities of Power Apps. You purchase ‘per app’ licenses like ride tickets at the County Fair. Each license allows an end-user to run 2 custom apps and access 1 custom portal. If you want to license Anne to use 3 apps and Sue to use 2 apps, you need to buy 2 ‘per app’ licenses for Anne and 1 ‘per app’ license for Sue, a total of 3 ‘per app’ licenses. If the users need to use the same app deployed in multiple environments, they must be licensed appropriately in each environment.

Additionally, embedded canvas apps within a model-driven app will not count toward the two-app limit. The ‘per app’ plan allows organizations to get started with the Power Apps platform at a lower entry point. Customers on a ‘per app’ plan typically start with 1 – 2 leading use case scenarios before adopting the platform more broadly. The ‘per app’ plan is also an attractive licensing option to license end users that run only a few apps. Advisicon suggests you balance the administrative overhead of managing ‘per app’ licenses if you have a large organization in which a large portion of the organization will be using an increasing number of apps to avoid consuming the resources saved through Power Apps in administering the licenses therefor.

The ‘per user’ licensing model allows licensed users to run unlimited custom applications based on Power Apps’ full capabilities. ‘Per user’ licenses have Dataverse database and file capacity limits as well as a daily API request limit.

Power Apps Portals

Power Apps Portals deliver the capability to build standalone, external-facing portals like communities, customer service portals, and many more over the Dataverse. These are not a new capability but, instead, a rebranding of the Dynamics Portals. We invite you to have a focused conversation about Power Apps Portals and their licensing or licensing external guest users with an Advisicon advisor.

Power Automate Use Rights Included with Office 365 licenses

Limited Power Automate use rights are included with select Office 365 licenses to allow users to customize and extend Office 365 for productivity scenarios and to deliver a comprehensive low-code extensibility platform for Microsoft Teams. The table above indicates the list of Office 365 licenses that include Power Automate and Dataverse for Teams use rights. Power Automate use within Office 365 is limited to the context of the embedding Office 365 application. For both triggers and actions, flows included within the Office 365 application can connect to any data source within the application’s use rights and directly with the application. If the embedded flow extends beyond the Office 365 application context or if the embedded flow needs to connect to a premium on-premises or custom data source, standalone Power Automate licenses will need to be published.

Power Automate Use Rights Included with Dynamics 365 licenses

Just as with Office 365, Dynamics 365 licenses include Power Automate use rights to customize and extend Dynamics 365 applications. Flows included within the Dynamics 365 application can connect to any data source within the application’s use rights and directly with the application. And, consistently, flows extending beyond the context of the Dynamics 365 application will necessitate purchasing standalone Power Automate licenses. Just as with Power Apps licenses, Dynamics 365 Enterprise license holders’ use rights are more comprehensive. They are not limited to creating and accessing only 15 custom entities per application.

Power Automate Use Rights Included with Power Apps licenses

Both Power Apps’ per app’ and ‘per user’ licenses include Power Automate use rights to automate workflows associated with the Power Apps applications. As you would expect, Power Automate use within Power Apps is limited to the context of the Power Apps application. This means that, for both triggers and actions, flows included within a Power Apps application can connect to any data source within the application’s use rights and directly with the application. If the flow is isolated and has nothing to do with the Power Apps application, standalone Power Automate licenses will need to be purchased.

Standalone Power Automate licensing

Customers that need full-fledged, general-purpose workflow, business process automation, or Robotic Process Automation (RPA) capabilities should consider purchasing standalone Power Automate licenses. Licensing is available on both a ‘per user’ as well as ‘per flow’ basis. All standalone licenses include the full capabilities of Power Automate with the exception of RPA functionality, which is only available in the ‘per use with attended RPA’ plan.

Power Automate per user plan

The Power Automate’ per user’ plan equips individual users to create and run unlimited workflows and business processes based on their unique needs. The ‘per user’ plan is intended to support the broad adoption of an organization’s automation culture. Should the entire organization be licensed with the Power Automate ‘per user’ plan, admins will have minimal overhead with tracking how many flows are being activated/used within the organization. The ‘per user’ plan carries a daily usage limit of 5,000 API requests. A capacity add-on can be purchased to increase daily service limits.

Power Automate per flow plan

The Power Automate’ per flow’ plan is licensed by flow and allows customers to implement critical business processes with capacity that serves teams, departments, or the entire organization without individually licensing each end-user that triggers the licensed flow. The ‘per flow’ plan is excellent for departmental scenarios where, for example, one power user sets up a flow that is shared with the broader group. This plan alleviates the need to license each end user that knowingly/unknowingly triggers the licensed flow’s execution.

You should note that all types of enabled top-level flows (scheduled flows, automated flows, instant flows, and business process flows) need to be licensed. Flows that are only used as “child” flows (triggered by another flow) do not need to be additionally licensed.

The ‘per flow’ offer is sold as a 5 unit (5 flow) minimum purchase and carries a daily usage limit of 5,000 API requests. A capacity add-on can be purchased to increase daily service limits.

AI Builder service credits

Of the above plans, only the Power Automate per user with attended RPA plan includes AI Builder service credits n support of scenarios like forms processing, object detection, prediction, text classification and recognition, and more. Additional credits can be purchased.

Power Automate unattended RPA add-on

The Power Automate unattended RPA add-on extends desktop-based automation by enabling a bot to run autonomously (i.e., independent of a user). Unattended bots can be deployed on a local or remote desktop or other virtualized environment. The Power Automate per user with attended RPA or Power Automate per flow plans is an eligible base for the unattended RPA add-on. Note, the Power Automate unattended RPA add-on is licensed by bot. Concurrent instances of a singular process require an additional unattended bot for each instance – multiple unattended RPA add-ons can be applied against a qualifying base license.

Note also that any software automated with an unattended bot may require additional licensing per its software terms. For example, unattended RPA scenarios incorporating O365 requires the Microsoft 365 – Unattended License.

Power Virtual Agents subscriptions

The Power Virtual Agents application is licensed per tenant. Power Virtual Agents will be charged according to the unit of ‘billed sessions,’ a billed session being an interaction between the user and the bot and representing one unit of consumption.

A user license (called Power Virtual Agent User License) is required for each user authoring bots with Power Virtual Agents. Available at no additional cost, the license can be assigned to users by the administrator in the admin portal. We recommend acquiring the tenant license (with capacity add-on if needed) and user licenses as part of a single transaction to simplify onboarding to Power Virtual Agents.

Note that Power Virtual Agents purchased capacity is enforced monthly, and unused sessions do not carry over month to month. Power Virtual Agents capacity add-on purchases are available to increase the capacity by 1000 chat sessions/tenant/month. 2000 sessions/month are in the base entitlement.

Power Virtual Agents for Teams

Power Virtual Agents for Teams enables customers with select Office 365 licenses to build and deploy custom chatbots directly within Teams, using Dataverse for Teams. It includes deploying chatbots in Teams but not in channels, supports creating automated, instant & scheduled flows within the context of Power Virtual Agents bots, and utilize standard connectors. Use beyond those constraints would necessitate the purchase of standalone Power Virtual Agents licenses.

Power BI

Power BI licensing, by contrast with the rest of the Power Platform, is relatively straightforward. First of all, you should know that the Power BI Desktop is available to be downloaded and used, for free, without any need for a license, by anybody, against any data they can access. In this, a user has complete access to the capabilities of Power BI Desktop.

The Power BI cloud service is the platform on which the data contained in datasets and reports is presented in dashboards. Three relevant licensing models come into play at this point. The first is Power BI (free). A license granted by a Microsoft 365 administrator to a user that enables the user to go beyond building reports and dashboards to embedding them in Dataverse for Teams or publishing them in a personal app workspace in the Power BI service. The free license does not provide the capability to share the reports and dashboards with other users.

The paid Power BI Pro per user license allows the user to share reports and dashboards within an organization through the Power BI service. Power BI Pro is purchased in addition to any other Microsoft 365 or Office 365 user license, except that it is included in the Microsoft 365 E5 and Office 365 E5 license at no additional cost.

Power BI Premium Capacity is targeted at organizations intending for Power BI to be used by many users, a situation in which it is more cost-effective and more efficient to manage than per-user licensing, and by organizations with extensive reporting needs, the need for larger data capacities and dedicated compute capacity. With Power BI Premium Capacity, there is still a need to individually license users who develop and deploy datasets and reports. Still, the users who are only consuming the shared reports do not require a per-user license.


We’ve got some great Power BI training classes that can bring your team up to speed quickly on using Power BI. Your team can learn to analyze their data and create compelling data visualizations that will help you create a data-driven culture in your organization.

Our team has been using the Power Platform applications to develop and deploy solutions for clients. We are excited by the opportunity of helping you solve your most complex challenges. We would welcome the opportunity to talk with you about those challenges and to help you determine if the right approach for you involves custom app development, training, or a combination of both.

In Summary

At the beginning of this very lengthy post, we warned you that Power Platform licensing is very complicated. We hope we have helped you find a little clarity and identify situations that describe your expected needs. We’ve avoided quoting costs because Microsoft reserves the right to change them monthly. We would be glad to help you estimate your pricing and drive significant efficiencies and productivity change through the use of the Power Platform at your organization.