The Microsoft Power Apps licensing model does not scale well

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Microsoft started a new licensing model for Power Apps (and Power Automate) from October 2019.

I believe the intention was to simplify the earlier licensing model, and to give a less expensive starting point with the new pr. app. licensing option.

You already are licensed for limited Power Apps functionality via your Office 365 license. As long as you are doing Office 365 stuff with your Power App, like using connectors for SharePoint, Teams, Planner, OneDrive, Outlook etc. you are probably already covered with your Office 365 user license.

If you need to access data in the CDS (Common Data Service), On-Prem data, any premium connector or custom connector then you will need to license Power Apps separately.

The new model has two options, the model where you license an app and gives the user access to the full capabilities in Power Apps. This allows your users to run 2 Power Apps and 1 Power App Portal. The cost is $10 pr. app pr. user pr. month

Option two is to go for the pr. user license. This gives the user permission to run an unlimited number of Power Apps with full capabilities, e.g premium connectors

The cost for the pr. user license is $40 pr.user pr.month

So far so good but when you begin to add all of this together the problems begin. Lets do that with an example and lets use the same scenario Microsoft uses in the session from Ignite called  “Planning and managing licensing and capacity for Power Apps and Power Automate from Ignite”. the session is well worth watching and the scenario there are something like this:

Company with 7300 users, they have 2000 users that can make do with the license they already have included in their Office 365 user license. They have 300 users running one Power App that needs premium features so they will buy pr. app licenses for those. And then they have 5000 users that are running several applications using premium features so they will get pr. user licenses for those. Sounds good? So, lets add all that up?

300 licenses = 300 * $10 * 12 Months$36 000 pr. year
5000 pr. user licenses = 5000 * $40 * 12 Months$2 400 000 pr. year
For a total of$2 436 000 pr. year

That’s a bit much, don’t you think?

I mean I could easily employee a few developers to develop great solutions, save a bunch of money and pay no extra licenses. So unless you know you a going to produce many Power Apps, and perhaps replace several other licensed applications, this is way to expensive.

So this licensing model does not scale well at all. If you are a small company you could create a lot of great applications on the Power Platform and pay a reasonable license fee. But for a large company this would be way to expensive. There will be alternative ways to solve problems much cheaper.

What is needed is some sort of Enterprise license where a large company would be able to utilize the Power Platform and pay a cost that is a bit more reasonable.

For more information see:

Licensing overview for Power Platform

“Planning and managing licensing and capacity for Power Apps and Power Automate from Ignite”

“Microsoft Power Apps, Microsoft Power Automate and Microsoft Power Virtual Agents Licensing Guide”

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