Demystifying Power Platform Licensing: A Practical Guide (November 2025)

Introduction: Why Power Platform Licensing Can Seem Complicated

For newcomers and even experienced users, Microsoft Power Platform licensing can appear complex at first glance. With multiple products, various purchasing models, and specific use rights, it's easy to feel overwhelmed.

The purpose of this article is to provide a clear, easy-to-understand summary of the core licensing models, based exclusively on the official "Power Platform Licensing Guide" from November 2025. It is intended for business professionals, IT managers, and consultants looking for a practical overview without reading the full guide.

1. The Big Picture: What's Included in the Power Platform?

Microsoft Power Platform is a suite of low-code tools that allows businesses to create custom applications, automate workflows, and build external websites. This licensing guide focuses on the core components: Power Apps, Power Automate, Power Pages, and the underlying data platform, Microsoft Dataverse.

Crucially, as mentioned in the source document, licensing for Power BI and Microsoft Copilot Studio is covered in separate, dedicated guides. Therefore, this article will focus only on the components detailed in the main Power Platform Licensing Guide.

2. The Core Licensing Models: Understanding the Building Blocks

Understanding how licenses are acquired is key to navigating the platform. The following are the fundamental concepts for licensing Power Platform.

• Subscription Licenses: This is the primary way to buy, with plans typically billed annually. The main types are Per User, Per App/Flow, and Capacity-based.
• Pay-As-You-Go (PAYG): A flexible alternative where you pay for actual monthly usage. It is available for Power Apps, Power Pages, and Dataverse capacity.
• Add-on Licenses: These licenses extend the capabilities of base licenses. Clear examples are the Power Automate unattended RPA add-on and Dataverse capacity add-ons.
• "Seeded" Licenses (Included Rights): Select Microsoft 365, Office 365, Dynamics 365, and Windows licenses include limited Power Platform capabilities. It is important to note that these rights are often restricted to the context of the primary application, a concept known as "within app context."

3. Power Apps: From a Single App to Unlimited Use

Power Apps offers licensing schemes designed to fit different needs, from access to a single application to unlimited use across the organization.

Power Apps Premium vs. Power Apps per app

The Power Apps per app license is assigned to a user for a specific application in a specific environment. These licenses are stackable; a user might need several per app licenses to access multiple applications without requiring a Power Apps Premium license.

Note the significant difference in accrued Dataverse capacity—a key consideration for data-heavy applications. Each Power Apps Premium license contributes five times more database capacity to the tenant pool than a per app license.

Power Apps Pay-As-You-Go

The Power Apps per app meter allows organizations to pay based on the number of unique active users who open an app each month ($10 per active user/app/month), offering maximum flexibility.

Included Rights (Power Apps Basic)

Select Microsoft 365/Office 365 and Dynamics 365 licenses include limited Power Apps rights. The crucial rule here is "within app context." This means the apps and flows must relate to the data and context of the primary application (e.g., Dynamics 365).

4. Power Automate: Automating Tasks, Processes, and More

Power Automate presents the most diverse range of licensing options, which can be logically grouped for clarity.

Licenses for Users

• Power Automate Premium ($15 per user/month): This is the primary user license. It allows a user to create unlimited cloud flows (DPA) and run attended desktop flows (RPA). It also includes Process Mining capabilities.
• Power Automate per user ($15 per user/month): This license is for users who need to create unlimited cloud flows but do not require RPA or Process Mining.

Licenses for Processes & Bots

• Power Automate Process ($150 per bot/month): This licenses a single automation "bot" that can run unattended RPA or a business process accessible by unlimited users. It is licensed per bot, per environment.
• Power Automate per flow ($100 per flow/month): This model licenses a specific top-level flow to serve unlimited users within an organization. It requires a minimum purchase of 5 licenses, as it is designed for critical business processes that serve many users, justifying the initial investment.

Specialized & Add-on Licenses

• Power Automate Hosted Process ($215 per bot/month): A superset of the Process license that includes a Microsoft-hosted virtual machine for unattended RPA, eliminating the need for customer infrastructure.
• Power Automate unattended RPA add-on ($150 per bot/month): Adds an unattended bot to a qualifying Power Automate Premium or Power Automate per flow license.
• Power Automate Process Mining ($5,000 per 100 GB/month): A capacity-based add-on to the Power Automate Premium license for advanced process analysis and optimization.

Included Rights (Windows, M365, D365)

Limited Power Automate rights are included with Windows (for personal, attended desktop automation), Microsoft 365, and Dynamics 365. For the latter two, the "within app context" limitation applies again.

5. Power Pages: Licensing Your External Websites

Power Pages licensing is based on the type and volume of monthly website users.

There are two defined user types:

• Authenticated Users: Users who log in to the website via an authentication provider.
• Anonymous Users: Users who browse the website without logging in.

Capacity Pack Subscriptions

Licenses are purchased as monthly capacity packs.

• Authenticated users: 100 users per pack
• Anonymous users: 500 users per pack

The official guide indicates tiered pricing discounts for higher volumes. For example, while the base capacity pack for authenticated users (Tier 1) is $200 for 100 users, purchasing at Tier 3 (over 100,000 users) reduces the cost to $50 per pack.

Pay-As-You-Go Meters

As an alternative, PAYG meters allow you to pay for the actual number of unique authenticated and anonymous users who access the site each month.

Included Rights

The Power Apps Premium and Power Apps per app licenses include rights to access and run Power Pages websites. Additionally, select Dynamics 365 Enterprise licenses also include these rights if they are in the same environment.

6. Understanding Dataverse Capacity

Dataverse: The Foundation for Your Data

Dataverse is the fundamental data platform for Power Platform, and its capacity is a key part of licensing. There are three types of capacity:

• Database: Stores and manages table definitions and data.
• File: Stores attachments to notes or emails, such as documents, image files, videos, and PDF files.
• Log: Records changes to table and column data over time for auditing, compliance, and governance purposes.

Capacity is allocated at the tenant level as follows:

1. Default Capacity: A tenant receives a one-time base amount of capacity with its first Power Platform or Dynamics 365 subscription. For example, the first Power Apps Premium license provides a default of 20 GB of Database and 20 GB of File capacity.
2. Accrued Capacity: Additional capacity is added for each subsequent license purchased. For example, for every Power Apps Premium license, the tenant gets an additional 250 MB of Database and 2 GB of File capacity.

If more capacity is needed, it can be purchased via Dataverse capacity add-ons or consumed using pay-as-you-go meters.

7. Critical Rules and Common "Gotchas"

This section contains essential tips to avoid common licensing mistakes.

1. Multiplexing: Using hardware or software to pool connections, reroute information, or indirectly access the service does not reduce the number of licenses required. Every user who inputs or views data, whether directly or indirectly, must have an appropriate license.
2. "Within App Context" is Key: This rule is fundamental for included (seeded) licenses. The guide's example is clear: a flow connected to a Power App's SQL database is in context. However, a separate flow that updates an unrelated Oracle database is out of context and requires a full Power Automate license.
3. External Users Must Be Licensed: Non-employees, contractors, and agents who access Power Platform services must have appropriate licenses, just like internal users.
4. Unattended vs. Attended RPA: In short, an attended bot runs with user intervention (requires a Power Automate Premium license), while an unattended bot runs on its own (requires a Power Automate Process license or an unattended RPA add-on).

Conclusion: Your Path to Correct Licensing

In summary, the main licensing paths are:

• Power Apps/Automate Premium for users needing broad and unlimited capabilities.
• Per App/Flow/Process for licensing specific solutions or scenarios.
• Pay-As-You-Go for ultimate flexibility and for starting with small projects.

While this guide simplifies the key concepts, the official Microsoft Power Platform Licensing Guide is the definitive source of truth. Always consult the latest version of the official guide, which can be found on the Microsoft website, for detailed terms and conditions.