Power Apps & Power Automate licensing updates (2023)

Most of the customers and community members I talk to would agree that Microsoft Power Platform licensing feels like a complex topic. They might also be under the impression that it keeps changing all the time, thus making it hard to know if you’ve really got the latest information at your disposal.

During summer 2023 at the Microsoft Inspire partner event, there were new options announced for the Power Platform product offering: “Microsoft launches Power Automate Process Mining and next-generation AI”. There have also been notifications in the Microsoft 365 admin center about changes to license naming.

In this article I will summarize the changes and key impact to customers and partners. The intention is to help everyone map the old and the new product names and license types.

Power Apps licensing in 2023

Let’s start with the easier product first. If you have visited the Power Apps pricing page before, you may recall having seen a lot more options than what the current version in August 2023 presents:

What happened here? Did Microsoft remove the license types from their catalog that our organization was using?

The short answer is: everything you knew from 2022 is still available today. It’s just that MS has decided to “simplify” the experience by hiding options from the product’s marketing pages. If you go to the documentation on Microsoft Learn or download the latest Power Platform licensing guide, you’ll find the details about Power Apps per app, pay-as-you-go plans, and seeded rights within Dynamics 365 and Microsoft 365 licenses.

The one thing that has changed about the offering in practical terms is quite simple: “Power Apps per user” has been renamed to “Power Apps Premium”. That’s it!

The question some of you might have is “how does this impact the per app passes”? The answer is: the naming of that license type remains the same. Sure, its whole purpose is still to provide access to premium features and premium connectors that are not included in the Office 365 or Microsoft 365 licenses. However, since Microsoft wants customers to focus on licensing users for the low-code platform instead of individual low-code apps, their marketing message is now clearly focusing on the Power Apps Premium license type.

Nothing has changed on the Power Apps pricing side. Apart from the licensing guide now displaying publicly a discount tier that reduces the Power Apps Premium price from $20 to $12 if you buy more than 2,000 new user licenses at a time. Similar discounts rates have occasionally also been publicized in the past. Of course, larger customers will be able to negotiate lower license prices for their Enterprise Agreements with MS across the whole product portfolio.

Power Automate licensing in 2023

On the automation side there’s been more changes. The new features announced for the process mining part of Power Automate product capabilities, including the product becoming generally available. With more options available in the suite, there is of course the danger of it making navigating the licensing requirements even harder.

A similar simplification has been performed on the Power Automate pricing page as with Power Apps:

Again, it’s not an actual deprecation of anything that used to be available for purchase from Microsoft. Looking at the summary table for Power Automate in the licensing guide PDF illustrates the challenge with more options being introduced:

All the first 3 columns labelled as “recommended motion” are actually new here. If we ignore the process mining capacity license that is a whole discussion of its own and focus on the “classic” Power Automate scenarios, there are 2 products that current customers need to pay attention to.

“Power Automate Premium” is in practice a rename of an earlier SKU (“stock keeping unit”) Microsoft had been offering. In the documentation, it says: “This new offer includes all the benefits of Power Automate per user with attended RPA offered at $40 per user/month, plus the Process Mining visualize and analyze processes capabilities, and is offered at $15 per user/month.”

So, for new customers that decide to purchase Power Automate licenses for their users, they’re actually getting everything that’s in the $15 “Power Automate per user” license AND the ability to run attended RPA bots (unattended bots running on a virtual machine / cloud still cost extra). A very nice bonus that will lower the barrier for desktop flows experimentation. The old “Power Automate per user” license still remains in place for current customers with contracts & active subscriptions.

“Power Automate Process” is a brand new SKU. It follows the same idea as the Premium license in the sense that it covers both DPA (digital process automation, aka cloud flows) and RPA (robotic process automation = desktop flows). Unlike with the Premium license, though, this one is not licensed per user but rather per flow.

(Yeah, as I type these sentences the MS product terminology gets quite confusing. “Per user” license still exists for a while, yet also “Premium” is a “per user” type of a license. “Process” is a “per flow” type of a license but it’s not the same SKU as “Power Automate per flow”.)

The reason why a “per flow” type of a license is needed on the automation side is to handle scenarios where multiple users either receive value from a flow with premium connectors. Even though one user license would technically get the job done, you’re not allowed to reduce the number of licensed users via automation. This would fall under multiplexing in Microsoft licensing terms and is forbidden.

It is also very important for governance purposes that business critical flows should not be tied to a single human identity. You don’t want a business process to stop just because one employee leaves the organization, for example. If you’re using service accounts with cloud flows, it might be safer to apply a “per flow” license than trying to ensure all internal and external parties with access to the credentials have a user level Premium license.

The price of the old “Power Automate per flow” license is $100, yet there’s a minimum of purchase of 5 licenses. With the new “Power Automate Process” license, there are no minimums anymore. Yet the price of the license has gone up 50%, presumably due to Microsoft’s aim to primarily push it for the RPA scenarios. As a result, once the number of licenses needed in your organization grows, the cost would increase as depicted in this chart:

It’s not quite that straightforward, though. (Yes, this is the world of Power Platform licensing so there is always a “but”.😁) While the old “per flow” license was always attached to a single cloud flow, the wording of the new “Power Automate Process” licensing documentation suggests that several flows related to a single core business process could be associated with one another:

Technical details on how exactly this can be performed and what are the limits in the platform to enforce the licensing model of “Power Automate Process” have not yet been disclosed. So, it is too early to tell what scenarios are suitable for this licensing option and how that will impact the cost or architecture of the solution.

For the time being, using the “per flow” model remains an option. However, in the Power Platform licensing FAQ it has been stated that these legacy licenses will be removed from the price list of February 1, 2024:

Conclusions

It is quite natural that Microsoft will keep refining the licensing and pricing model of their low-code platform as it becomes more widely adopted and the real-life blockers and enablers in its commercial model become clear. Attempts to simplify the already fairly nuanced licensing rules by reducing the options promoted to new customers makes perfect sense.

At the same time, there is a growing base of existing customers that will need to understand how their current licenses map to the latest updates in naming and entitled usage. Old product offering cannot just be removed one day and replaced with a new set of terms since ongoing contracts can span several years. As a result, the IT professionals administering Power Platform product licenses for their user base will need to know both the old and the new terminology.

As a summary, the main idea behind the August 2023 license changes for Power Apps and Power Automate can be described like this:

• Power Apps Premium = Power Apps per user
• Power Automate Premium = Power Automate per user (with added RPA capabilities)
• Power Automate Process = Power Automate per flow (with added RPA capabilities + the coming “in context of another flow” options)

Not so scary after all, is it? This mapping list will allow you to identify what license to assign to a user, whether the user’s request or the MS portals are using the old or the new terminology.

For more detailed guidance on Power Platform licensing requirements and options for your specific application and automation scenarios, we’re always happy to provide advisory services. Don’t be afraid to reach out!