If you’ve purchased the comprehensive Microsoft 365 E5 plan for your information workers, covering a wide range of the latest & greatest services from the MS cloud, you’re all good. Right? I mean, after all, it’s the flagship 365 package that carries the very name of the world’s biggest business software provider. Compared to the earlier Office 365 plans, the E5 offering ain’t exactly cheap, but you do get a lot. Windows 10 Enterprise, Azure AD Premium, Advanced Threat Protection, Cloud App Security, Power BI Pro…
Advanced apps = bigger license required
What comes as a surprise to many IT professionals is that you don’t get the full Power Platform services with M365 E5. Yes, you do get some pieces of it, but not everything needed for replacing your legacy business systems with modern apps built on the low-code application platform. Most notably, you’re not allowed to use Dataverse (previously Common Data Service / CDS) nor any Premium Connectors for your Power Apps and Power Automate integration needs.
“Hold on! So, if these Power Platform services are not part of E5 then why do many of their names show up when I look at the details of my Microsoft 365 E5 subscription?”
“Also, when I go and look at the user details in Microsoft 365 Admin Center, I can clearly see several Common Data Service lines listed as coming from the Microsoft 365 license:”
Yes, you’re not seeing things, the lines do exist there. However, they are NOT the same as what you would get when purchasing actual platform licenses like Power Platform Per User. I’m sorry, but pure common sense won’t get you very far here, since we’re talking about Microsoft business applications licensing, which has been compared to explaining quantum physics…
There is logic behind it all, though. The reason for why items like CDS show up under Microsoft 365 and Office 365 subscriptions is that MS is actually using the same platform as its’ customers & partners when delivering new applications. Back in April 2020, there was an announcement in the Message Center:
This was associated with M365 roadmap item “Office 365 user view to Project and Roadmap”. In short, because the new Microsoft Project offering is leveraging several Power Platform technologies at its core, there needs to be a mechanism in place to unlock the usage of Dataverse/CDS for the upcoming view access to Project information. Hence the new CDS service plan added under Office 365 and Microsoft 365.
Sounds a wee bit confusing, doesn’t it? If we compare this to the Dynamics 365 products that are also leveraging Dataverse, then the same kind of arrangements have not been required over there, since essentially Dataverse was born as a Dynamics service. It’s built into it and there would not be any visible apps without it (on the CRM side), so therefore your Dynamics 365 (Enterprise) licenses already serve as the key to unlock this data platform. On the Office side, this is all brand new, so managing the subscriptions around it needs more effort. And more rows into that long list of E5 capabilities.
Why this paywall exists
In short, you can use Power Apps to extend your Office 365 / Microsoft 365 services without any additional licenses. That’s the scope of Power Platform that comes bundled with these subscriptions. When you want to build something completely custom, a new app to manage a critical business process specific to your organization, then often times the services within the Office family are not enough. Today, you don’t need to immediately jump into the world of Azure and start writing custom code to meet your needs, rather you should explore if a no-code/low-code approach built on Power Platform would give you the results faster – and often with a lower TCO, too.
It’s not free, though. The fact is that Microsoft 365 isn’t intended to meet all the software needs of your unique processes. You’re likely to have plenty of non-MS applications in use today that might be managing common processes like HR, or targeted to your specific industry, say real estate leasing, as an example. You could use the Power Platform tools to replace legacy software from these areas and consolidate your digital operations onto a modern, global cloud service using the “aPaaS” model (application platform as a service) as opposed to PaaS or IaaS.
Funnily enough, the exact same core technology (Power Apps) that you’d use for customizing a SharePoint list form is applicable to building a completely custom LoB system for your organization. The first capability comes with the Office license, the latter does not. The reason for such a divide is that in practice there’s a wealth of requirements hidden inside every complex business application (security, integration, auditing etc.) that you shouldn’t even try to tackle with SP lists – or Microsoft Lists, as they’re now called.
Drawing the line isn’t easy for even IT professionals, though. In the ever more interated suite of Microsoft cloud services, neither the UI nor the individual product names necessarily reveal what are the licensing requirements and functional limitations of for a specific scenario. The lines will become even more blurred once Microsoft Teams will begin offering a subset of Power Platform features aimed for the creation of simple apps within individual teams (a.k.a. Project Oakdale).
Unleash & govern your internal app makers
Low-code application development is increasingly becoming a mainstream activity for organizations. Microsoft has already realigned their strategy in business applications to reflect this new reality. They’ve made it possible to purchase a platform-only Power Apps licenses at $15 (per app) / $20 (per user) instead of requiring the customers to license their readymade Dynamics 365 Apps at enterprise price ranges ($95 per app). [Pricing updated to reflect the 2021 price drop for Power Apps.]
At the moment it would seem unlikely that the full low-code platform service would be bundled into a Microsoft 365 subscription in the near future. However, we’re very likely to see these Power technologies find their ways into more and more Modern Workplace scenarios. This can happen though bundling with Teams or other new products that offer easy extension points via Power Apps, Power Automate, AI Builder and other citizen developer tools.
Many of your organization’s power users who just want to go beyond Excel sheets and lists will probably get plenty of tools in the Power Apps for Office 365 seeded plan. Through Teams they’ll soon also have access to a “starter plan” for a true relational database like Dataverse. However, once you need to implement bigger applications for organization wide processes with centralized monitoring, integrations to external systems, governance planning – then it’s time to step beyond what the Microsoft 365 subscription offers.
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Unal Perendi2020-09-06 at 10:06
Great article, Jukka!
It d be also great if you have chance in another article maybe to enlighten us for the building user vs consuming user differences of all powerplatform licenses as it s also confusing sometimes, like you need to have Power BI pro even to consume a report which i guess everyone in the tenant can use Powerapps even someone else builds them with his 40$ per user plan? Then there is all types of Powerapps etc 🙂
Jukka Niiranen2020-09-07 at 09:45
When it comes to the maker vs. user licensing, the different Power products in Microsoft’s portfolio follow the same high level concepts. It’s always the person who is using the app/report/flow that must have a licenses, rather than just the single individual who created it. This aligns with the idea that you pay for the business value, rather than the bits & pieces needed in constructing the technical solution. MS gives you the low-code/no-code tools to the organization to solve their business problems across different departments and processes. Running the apps/reports/flows is a key part of the service, not just the “studio” for the solution developers.
In this model you assign licenses to those users who are seen as getting benefit from consuming the business solutions running on the platform. However, unlike with a siloed technology approach where every individual solution needs its own resources, the platform level licenses like Power Apps Per User entitle the user to consume in theory an unlimited number of apps with his/her $40 license. Same as with Power BI Pro you’re not limited on the number of reports to consume. Yes, there is the capacity dimensions involved here, too (especially with Power BI Premium, but also CDS), but the primary licensing construct is the key that unlocks the door for a user to step into the world of Power Platform.
There are indeed many dimensions that can make Power Platform licensing complex to approach. If you’re interested in diving deeper, I’ve got several articles over on my personal blog that cover this topic: https://jukkan.com/licensing.
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Yadav2021-10-17 at 07:02
Thanks for detail explanation on Licensing part.
I have made one powerapp on Microsoft Dataverse (not for teams). It’s an App that will be used by my department employees and same time with some of the external vendors. The data involved in using this app is not more than few hundreds rows. Since Dataverse is premium connector so I need to purchase PowerApps per user license for all my Users. Is there any way to make this entire app free ? My company already using Enterprise E3 plan and planning to upgrade to E5 soon. Shall I transfer my Microsoft Dataverse to “Dataverse for Teams”? Will that helps? OR shall I transfer all data to Microsoft LISTS and then develop App and share with external vendors? Kindly suggest your best advice to make my app free for users or at best I have to pay minimum charges for its usage.
Jukka Niiranen2021-10-17 at 19:00
Yadav, it sounds like the app is a great candidate for Dataverse for Teams. You should be able to add guest users into the team and give them access rights to the tables as needed. Assuming you haven’t used any features exclusive to the full Dataverse (see comparison here), it might even be pretty fast to move this as a solution export/import into the new environment.
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