- Power Apps can be licensed in several ways, and optimal licensing depends on usage scenarios.
- Basic Power Apps capabilities are included with most Microsoft 365 and Office 365 subscriptions, and these may suffice for many customers.
- Upgraded Power Apps capabilities are available with additional licensing, and capacity add-ons can bring further costs.
- Customers with heavy Power Apps use will likely need the Managed Environments feature that requires additional licensing beyond Basic.
- Licensing purchases are likely to need adjustments as customers learn how Power Apps will be used in their organizations.
Update: The Power Apps Per App licensing option has been discontinued as of Jan. 2, 2026 for customers that are not currently using it. Enterprise Agreement (EA) and Cloud Service Provider (CSP) customers that were using the Per App licensing option as of Jan. 2, 2026 can continue to use and renew Per App licenses and adjust quantities (up or down as per the terms in their contract). Microsoft Products and Services Agreement (MPSA) customers can continue to use the Per App licensing option for the remainder of their current agreement and an additional 60 days after it expires.
Power Apps allows the creation of line-of-business (LOB) apps by citizen developers (also referred to as makers) without the expensive resources required for a formal development team. Makers are motivated to build apps based on a personal or group work need, but they are typically not formal application developers. Apps implemented using Power Apps can access and modify organizational data to simplify processes that are not addressed by existing solutions provided by the organization’s internal IT teams or third parties.
Planning a Power Apps usage strategy early, when possible, will help customers minimize the costs for the licenses needed to use the service. Inappropriate licensing can cause unnecessary costs and disorganized deployments. Power Apps licensing options can be difficult to evaluate and apply to organizational needs; however, unlike many Microsoft offerings, Power Apps licensing is technically enforced in most cases, preventing users from performing most operations that are not allowed by the User Subscription Licenses (User SLs) that have been purchased and assigned to them by the organization. Furthermore, an auto-claim policy (Microsoft) can be used to automatically grant users the necessary license (from the pool of available licenses purchased) when a user performs an action requiring additional licensing.
(For an illustration, see “Power Apps Licensing Options”.)
This report does not discuss Power Apps entitlements that are included with Dynamics 365. Most Dynamics 365–licensed users are permitted to build apps with Power Apps (and Power Automate) within the context of Dynamics 365 modules they are licensed to access. Conversely, Power Apps licenses provide rights for users to work with most Dynamics 365 data. (Power Apps apps can read data but not modify data in restricted tables without Dynamics 365 licenses.)
Rights Included with M365 and O365 (Power Apps Basic)
Limited Power Apps usage rights, referred to as Power Apps Basic, are included with all Microsoft 365 and Office 365 User SLs other than Microsoft 365 F1. Capabilities beyond Power Apps Basic require separately purchased licenses in addition to a user’s Microsoft 365 or Office 365 User SL, giving Power Apps a so-called freemium purchase model.
Capabilities can be grouped by the type of app, data access, and governance supported.
Type of App
Canvas apps but not Model-Driven or Cards apps are supported subject to the other feature constraints of Power Apps Basic. Canvas apps allow a maker to construct a custom UI, including the screens, controls, and flow of the user experience. The Canvas app type requires UI design skills, as opposed to the Model-Driven app type, which eliminates most of the UI design work of building an app by providing prebuilt UIs for viewing and modifying data specified by the maker.
Thus, support for Model-Driven apps provided by the extra-cost Power Apps licensing options beyond Power Apps Basic could attract customers by reducing the design burden imposed on makers and potentially enabling a larger group of makers to build apps.
Power Apps Basic is sufficient for running apps such as the following:
- A room-booking app that uses free/busy data from Exchange
- A budget-tracking app that works with data from Excel or SharePoint
- A time-sheet app that tracks hours spent on projects
- An onboarding app that gives employees information and guidance on how to get started in a new role or project.
Data Access
Apps can use data only from within the organization’s Microsoft 365 tenancy and from outside the tenancy via Standard connectors (Microsoft). Premium (Microsoft) and custom connectors are not supported. There are hundreds more Premium connectors than there are Standard connectors. Premium connectors are required to connect to many popular third-party services, such as Salesforce, SAP, and ServiceNow, making higher-level Power Apps licensing attractive because it is needed to use these connectors.
Additionally, limited use of Dataverse (so-called Dataverse for Teams) is available for apps that run within the context of Teams. Apps running outside of Teams cannot use Dataverse. Using Dataverse with Power Apps provides advantages, such as prebuilt business schemas containing commonly used business entities, business logic that runs within the database, and integration with Power Platform that simplifies data access compared with external data sources. The lack of full Dataverse access at the Power Apps Basic licensing level could be a reason for purchasing higher-level Power Apps licenses.
Dataverse for Teams is a subset of Dataverse with restrictions including the following:
- Storage is limited to 2GB
- Basic data types are supported; advanced data types, such as currency and enumerated lists, are not supported
- Nonrelational data storage, which is required for working with logs, is not supported
- Advanced search is not supported
- Each team supports only a single environment (a logically isolated area for deploying apps)
- Security settings are less flexible than those supported by full Dataverse; for example, field-level security and customer-managed encryption keys are not supported.
These limitations enable basic Dataverse usage with simple governance capabilities. Licensing above Power Apps Basic is likely necessary as deployments expand and makers need more capabilities.
Governance
Apps can be administered using Power Platform environments. Administrators define access control for each environment to specify which users can build apps within which environments. However, Managed Environments are not supported by Power Apps Basic.
Managed Environments are an enhanced version of environments offering several governance features that can be critical for managing Power Apps deployments consisting of many apps and many users. Thus, customers with large Power Apps deployments should use Power Apps Premium, Per App, or Pay-As-You-Go licensing, which are the options that include Managed Environment support.
Other Rights
Power Automate flows can be run within the context of a Power Apps app. Flows cannot be run stand-alone without a separate Power Automate license, and robotic process automation (RPA) is not supported. This Flow support allows apps to include workflows, such as approval processes, without requiring additional Power Automate licensing.
Up to 6,000 requests to connectors and Dataverse for Teams are allotted per user per day (this number is unlikely to be exceeded under normal usage [Microsoft]; it primarily exists to prevent overloading the back-end service).
Freestanding Power Apps Licensing Options
Several licensing options are available to increase Power Apps capabilities when the entitlements included with Microsoft 365 and Office 365 are not adequate to meet customer needs.
Power Apps Pay-As-You-Go (PAYG)
Power Apps PAYG licensing incurs costs based on the number of monthly users of an app without assigning each user a license. A PAYG license is billed to a customer’s Azure subscription, in contrast with other Power Apps licenses, which are purchased as traditional volume licenses.
PAYG billing uses the “Power Apps per-app pay-as-you-go” meter, which measures the number of unique users who access a PAYG-enabled app during each month.
The capabilities included with Power Apps PAYG beyond the entitlements included with Power Apps Basic include the following:
- The ability to run apps that use Premium and custom connectors
- Support for full Dataverse functionality for any app
- The ability to run Model-Driven and Cards type apps
- Managed Environments support, which is critical for governance when Power Apps is deployed at scale (see the sidebar “Managed Environments Are Critical for Governance”).
Users assigned Power Apps Premium licenses are not counted by the meter when running an app that has PAYG licensing enabled. An app can be enabled for both Per App and PAYG licensing. A user who runs an app that is enabled for both is not counted by the PAYG meter if that user has been assigned a Per App license.
PAYG licensing can reduce costs for specific scenarios, such as early testing and capacity estimation, but it is likely to cost more compared with other licensing options for most production use. PAYG licensing can be a better option than Per App licensing for infrequently used apps. For example, an app used for a small number of months each year, such as a performance-review app, might be optimally licensed using the PAYG option.
PAYG licensing costs US$10 per active user, per app per month.
Power Apps Per App
A Power Apps Per App license gives a single user rights to run a single Power Apps or Power Pages app. A Per App license is more accurately a Per-User license because it allows a single user to run a single app.
The capabilities included with Power Apps Per App beyond the entitlements included with Power Apps PAYG include the following:
- Dataverse capacities of 50MB for databases and 400MB for files; these capacities are pooled across the organization
- 250 AI Builder credits, which are pooled across the organization.
Per App license assignment requires steps performed in the following order:
- The license is assigned to an environment.
- The app the license will be used with is enabled for Per App licensing (this is done one time for the app; this step is not required when subsequent Per App licenses are used with that app).
- The Per App license is assigned to the app.
- The app is shared with the user who will run the app using the Per App license.
A Per App license can be transferred to a different user, but this requires the administrator to “unshare” the app from the originally assigned user.
Users assigned Power Apps Premium licenses do not consume a Per App license when running an app that has Per App licensing enabled.
A Per App license must be associated with a single environment (step 1 above), and therefore if the same app is deployed in multiple environments, a user needs a separate license to access it in each environment. For example, if a sales-report app is deployed separately as a North America Sales App and a Europe Sales App, a user who accesses the sales app for both regions would require two licenses.
Per App licensing is a good option for organizations in early adoption phases, such as when piloting the service. It is also a good option when a small number of apps will be deployed and when each user will use only a small number of apps.
A Power Apps Per App license costs US$5 (per user per app) per month.
Power Apps Premium
Power Apps Premium is a Per-User license that provides the maximum capabilities for working with the service. The capabilities included with Power Apps Premium beyond the entitlements included with Power Apps Per App include the following:
- The ability to run an unlimited number of Power Apps and Power Pages apps in the user’s tenancy
- The ability to run Power Apps and Power Pages apps that the user has been invited to use in another organization’s tenancy of the service (this capability could be valuable when an organization has multiple tenancies, such as after a merger or acquisition)
- An increase from 6,000 to 40,000 in the request limit to connectors and Dataverse per day
- Dataverse capacities of 250MB for databases and 2GB for files; these capacities are pooled across the organization
- 500 AI Builder credits, which are pooled across the organization.
Organizations that deploy a large number of apps and have many users who use multiple apps are the best candidates for Power Apps Premium licensing.
A Power Apps Premium license costs US$20 per user per month, and this rate is reduced to US$12 for customers who purchase more than 2,000 Premium licenses.
Trial and Developer Plan Licenses
Trial and Developer Plan licenses offer two additional methods to gain access to Power Apps capabilities.
Trial
Microsoft 365 and Office 365 users can sign up for a 30-day Power Apps trial using self-service without requiring administrator assistance. (Administrators can disable the ability for users to activate trials [Microsoft].) A Power Apps trial provides all the features of Power Apps Premium.
Administrators can view which users have active Power Apps trials in the Power Platform admin center. Administrators must assist trial users to move them to regular Power Apps licenses, and this process might involve moving apps these users have created using the trial to a different environment.
Developer Plan
Users can sign up for a Developer Plan via self-service without requiring administrator assistance. A Developer Plan provides a separate environment for a single user to perform app development.
A Developer Plan can be used only for app development and testing and not production. Apps created under a Developer Plan can be shared for testing by other users, but they cannot be used in production. This is one situation in which Power Apps licensing is not technically enforced (customers must ensure their practices conform with the licenses), in contrast with most other Power Apps capabilities, which cannot be performed unless a user is properly licensed.
A Developer Plan provides all the features of Power Apps Premium with the limitation of 750 Power Automate flow runs per month and a Dataverse database capacity of 2GB.
Capacity Add-ons
Some capacities used with Power Apps can be increased by purchasing add-ons, including the following:
Dataverse database capacity costs US$40 per GB per month. The cost appears expensive, but it includes more than simple storage: infrastructure capabilities, such as support for models and entities, are included in the cost.
Dataverse log capacity costs US$10 per GB per month.
Dataverse file capacity costs US$2 per GB per month.
AI Builder credits cost US$500 per unit per month. A unit includes 1 million AI Builder credits.
Directions Recommends
Evaluate the capabilities and licensing options before adopting to prevent unnecessary costs. Consider the relative advantages of Power Apps Premium, Per App, and PAYG because varying usage scenarios could cause any of these to be the best choice to optimize costs.
Monitor user activity to ensure the optimal licensing is in use. Power Apps deployments and activity can change, especially after initial adoption, and the licenses originally purchased may be in excess, or they may be suboptimal for the way the service is being used.
Evaluate whether Power Apps Basic suffices, causing freestanding licenses to be unnecessary, even if freestanding licenses are already purchased. Actual Power Apps usage after an initial deployment phase might not be what was planned, making the reduced capabilities included with Microsoft 365 and Office 365 adequate.
Understand Managed Environments, which add critical governance capabilities. Medium to heavy Power Apps usage is likely to require Managed Environments (available with Power Apps Premium, Per App, and PAYG) to maintain proper governance.
Resources
Executive-level considerations for Power Apps are discussed in the Directions report “Executive Focus: Power Apps Benefits and Risks.”
Technical details of Power Apps are discussed in the Directions report “Understanding Power Apps.”
Recent and upcoming new features in Power Apps and other Power Platform components are discussed in the Directions report “Next Wave of Power Platform Investments Are Mostly in AI, Administration.”
Power Platform resources are listed in the Directions kit “Kit: Power Platform.”