Cost & Licensing
From the field archive · Learned in 2023
Power Apps and Power Automate Licensing, Explained the Way I Explain It to Customers
The questions I answered over and over in 2023, the mental model I use to answer them, and what has changed in the licensing picture since.
2023 was the year licensing questions filled my inbox. Do our CoE admins need a license? Why do we see three times as many app passes as licenses we bought? Can users keep using a trial? I don't quote prices, and I always point customers to their account team for contracts. But I've found that most licensing confusion goes away once people understand three ideas: who or what holds the license, what context the app or flow runs in, and whether premium capabilities are involved.
Power Apps Premium and Power Automate Premium are the user licenses now, and the Process license has replaced the per-flow plan and the unattended RPA add-on. Auto-claim policies can assign Power Apps licenses automatically when users open premium apps. The Power Apps Developer Plan no longer creates an unmanaged developer environment starting November 15, 2026. And Microsoft has published that, starting February 2027, areas where Power Apps license checks were applied leniently, including apps in managed environments, model-driven apps and apps used outside a Dynamics 365 context, will require an appropriate premium license. If you haven't reviewed assignments recently, now is the time.
01Start with the question behind the question
When a customer asks for a "license overview," I first find out what they actually need. Often it's not licensing at all. When I prepared a license overview session in 2024, I pointed out that roles and licenses are different things: a license entitles a user to use a capability, while a security role decides what they can do inside an environment. Mixing the two leads to people buying licenses to fix access problems, or granting roles to fix licensing prompts.
The same goes for product names. Back in 2021, when someone asked me about "D365 licenses," my first reply was simply to ask whether they meant Team Members. Different Dynamics 365 licenses carry very different Power Platform rights, so the clarifying question saves everyone time.
02Three ways to license an app user
For Power Apps, there are three main ways to give a user premium rights. Here's how I lay them out.
| Option | Who or what holds it | Best when |
|---|---|---|
| Power Apps Premium | Assigned to a user in the Microsoft 365 admin center | A user runs several premium apps. It covers unlimited custom apps and Power Pages sites for that user. |
| Power Apps per app | Capacity allocated to an environment, consumed when users are given the app | A user needs one specific app. Each pass covers one app or one portal in one environment. |
| Pay-as-you-go per app meter | Environment linked to an Azure subscription | Usage is unpredictable or you want to start without a commitment |
What makes an app premium? Premium connectors, Dataverse, on-premises data gateways and custom APIs are common examples, and model-driven apps are premium by default. Makers can see an app's license designation on its details page. One thing that surprises people: you don't need a license to build canvas apps, only to run premium ones. Building model-driven apps does require a license.
03Per app passes in practice
Per app is where I see the most confusion, because it doesn't behave like a normal user license.
- Allocate, don't assign. Per app plans show up in the Microsoft 365 admin center after purchase, but you allocate them to environments in the Power Platform admin center. Don't try to assign them to users.
- Turn on per app licensing for the app. There's a toggle in the app's settings. In the default environment it's called auto assign per app passes.
- Allocate to every environment that needs it, including test, or users will be prompted to start a trial.
- Existing licenses win. A user who already has Power Apps Premium doesn't consume a per app pass.
In 2023 a customer couldn't reconcile their numbers. They had bought per app licenses through purchase orders a couple of years earlier, but the admin center showed exactly three times as many passes. The explanation is documented: per app plans bought before October 2021 entitle each license to three passes, covering up to two apps and one portal, for the rest of that agreement term. Newer purchases give one pass per license. I'm not a billing contact, so I sent the payment questions to the right team, but the ratio itself was expected behavior.
In 2025 another customer asked whether automatic assignment would waste passes on people who were already licensed. It won't. Per app capacity is consumed by users who need it to run the app, and a user with Power Apps Premium doesn't consume a pass. Separately, Microsoft 365 admin center auto-claim policies can assign Power Apps Premium licenses to users who launch a premium app without one. Auto-claim isn't supported in US government clouds.
04What Microsoft 365 and Dynamics 365 include
Microsoft calls these seeded licenses. They're real rights, but limited ones, and this is where I spend the most time setting expectations.
| License | Standard connectors | Premium and custom connectors |
|---|---|---|
| Microsoft 365 | Included | Not included |
| Dynamics 365 Enterprise or Professional | Included | Only in the context of the licensed Dynamics 365 app |
| Dynamics 365 Team Member | Included | Only in context, with limitations |
| Power Apps Premium or per app | Included | Flows only when in context of and associated with the app |
In early 2025 a large industrial customer asked whether the Power Automate rights in their Microsoft 365 licenses would cover a department's automation plans. My answer was that those rights are meant for personal productivity with standard connectors, with a much lower daily action limit than a premium license. For their use cases, which included premium connectors and attended desktop automation, I recommended Power Automate Premium for the people building and running those flows.
A related rule I repeat often: a flow that's isolated from the app doesn't inherit the app's rights. If a Power Apps license holder builds a premium flow that has nothing to do with their app, that flow needs its own Power Automate license.
05Power Automate: user vs capacity
Power Automate has two kinds of licenses, and the distinction maps neatly to "who is doing the work."
Power Automate Premium
Premium and custom connectors, attended desktop flows on the user's machine, process mining and AI Builder credits.
Power Automate Process
Allocated to a cloud flow or a machine. Covers unattended desktop flows and premium flows used by many people, with 250,000 actions per day per license.
Hosted Process
A superset of Process for hosted machines and hosted machine groups that Microsoft runs for you.
When do you need Process? When desktop flows run unattended, when a flow is owned by a service principal, when a premium flow is invoked by many users who don't all have Premium, or when a flow needs high action volumes. The flow must be in a solution to receive a Process license. If you're also calling flows from agents, my post on calling cloud and desktop flows from an agent covers the attended and unattended decision from the design side.
06Trials and developer environments
In 2023 a customer's team ran into issues with trial licenses partway through their evaluation, and we set up a call to sort out the current state. Trials are useful, but they have rules. Here's what's documented today.
- Self-service Power Automate trial: 90 days, with the capabilities of Premium plus unattended runs. Admins can turn self-service trials off with PowerShell.
- Admin-managed trials: 30-day trials of Premium, Process or Hosted Process, started by a global admin and extendable once.
- Power Apps trials: can be renewed only three times. Users may keep access for up to two hours after expiry because of caching.
- Developer Plan: free for learning and building, not for production. Starting November 15, 2026, signing up no longer creates a developer environment, and each user can create one managed developer environment.
What I recommend: run proofs of concept in a sandbox or a managed developer environment, and budget the real licenses before the pilot ends, not after.
07Admins and tooling
In 2023 a customer asked what their Center of Excellence team needed. My answer then was that admins and makers of the CoE Starter Kit needed a license that covers premium connectors, since the kit uses Dataverse, plus the right admin roles, which are a separate requirement. That advice still holds for anyone running the kit. But the kit is no longer actively maintained, and most of what it did now lives in the Power Platform admin center. My governance toolbox post walks through the move. The admin center also has license consumption reports to find users who need a license before February 2027.
08Which license for which scenario
| Scenario | Where I'd start |
|---|---|
| Personal flows with Outlook, SharePoint and Teams | Microsoft 365 seeded rights |
| A department rolls out one premium app | Per app passes, or pay-as-you-go to start |
| Power users running several premium apps | Power Apps Premium |
| Makers building premium flows and attended desktop flows | Power Automate Premium |
| Unattended desktop flows or a service-principal-owned flow | Power Automate Process |
| Extending a Dynamics 365 app with apps and flows | Dynamics 365 rights, in context of that app |
| Learning and proof of concept | Trials or a managed developer environment |
For how licensing interacts with environments and managed environments, see my post on environment strategy and DLP.
Where I'd start
Pull the Power Apps license consumption reports from the admin center and compare them to the February 2027 enforcement areas. Then sort your scenarios into the table above: who holds the license, what context it runs in, and whether premium features are involved. For anything contractual, bring your account team in early. Licensing terms can change, and the Power Platform Licensing Guide is the authority.
Happy to go deeper on any of this.
— K.G
Sources
- Microsoft Learn: Licensing overview for Microsoft Power Platform
- Microsoft Learn: About Power Apps per app plans
- Microsoft Learn: Power Apps licensing FAQs (including licensing compliance from February 2027)
- Microsoft Learn: Auto-claim policies for Power Apps licenses
- Microsoft Learn: Types of Power Automate licenses; Deep dive on specific licenses; Power Automate licensing FAQ
- Microsoft Learn: Run unattended desktop flows
- Microsoft Power Platform Licensing Guide
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