licensing

name	licensing
description	Power Platform licensing and cost optimization. Use when: license types, per user, per app, pay-as-you-go, premium, Copilot Studio licensing, Power Automate licensing, AI Builder credits, Copilot Credits, Managed Environments licensing, capacity, API request limits, cost optimization, feature-to-license mapping.

Skill: Power Platform Licensing

When to Use

Trigger when determining license requirements for a solution, mapping features to license tiers, planning capacity, evaluating cost models, or troubleshooting license enforcement errors.

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License Types at a Glance

Power Apps

License	Price (USD)	Scope	Key Entitlements
Power Apps Premium	$20/user/month ($12 at 2000+ users)	Per user	Unlimited custom apps, unlimited Power Pages websites, premium connectors, Dataverse, Managed Environments
Power Apps per app	$5/user/app/month	Per user per app	One app OR one Power Pages website per license, stackable
Pay-as-you-go	$10/active user/app/month	Per app via Azure	No upfront commitment, billed to Azure subscription
Developer Plan	Free	Per user (individual)	Full premium features, single-user developer environment, no sharing
M365 seeded	Included with M365	Per user	Standard connectors only, no premium, no Dataverse (except default env)

Power Automate

License	Price (USD)	Scope	Key Entitlements
Power Automate Premium	$15/user/month	Per user	Unlimited cloud flows, attended RPA, premium connectors, process mining (50MB data), AI Builder credits (until Nov 2026)
Power Automate Process	$150/bot/month	Per automation	Unattended RPA, unlimited users for the process, one machine session
Power Automate Hosted Process	$215/bot/month	Per automation	Process license + hosted machine capacity
Pay-as-you-go	$0.60/cloud flow run, $3.00/desktop flow run	Per run via Azure	Premium cloud and desktop flows, billed to Azure
M365 seeded	Included with M365	Per user	Standard connectors only, no premium, no RPA

Copilot Studio

License	Price (USD)	Scope	Key Entitlements
Copilot Studio	Per tenant (check current pricing)	Tenant	25,000 Copilot Credits/month, standard + premium + custom connectors, Dataverse (5GB DB, 20GB file, 2GB log)
Copilot Credits prepaid pack	Per pack	Tenant/environment	Additional Copilot Credits capacity
Pay-as-you-go	Per Copilot Credit via Azure	Per use	No upfront commitment, billed monthly

Sept 2025 change: Copilot Studio billing currency changed from "messages" to "Copilot Credits." No change in quantity per prepaid pack or pay-as-you-go rate.

Copilot Credit Consumption Rates

Action	Credits Consumed
Regular (non-generative AI) response	1 credit
Generative AI answer (over your data)	2 credits
AI Builder action (in agent/agent flow context)	Varies by action type

Power Pages

License	Scope	Key Entitlements
Per website	Per site	Authenticated user capacity (bundled)
Authenticated users	Per user/site/month	Access to authenticated areas
Anonymous users	Per user/site/month	Access to public pages
Pay-as-you-go	Via Azure	Per authenticated/anonymous user

Power Pages is also accessible via Power Apps Premium (unlimited websites).

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Feature-to-License Mapping

What Requires Premium?

Feature	License Required	Why
Custom connectors	Premium (Power Apps or Power Automate)	Not included in M365 seeded
Premium connectors (SQL, HTTP with Entra, etc.)	Premium	Not included in M365 seeded
On-premises data gateway	Premium	Gateway connections are premium
Dataverse (beyond default env)	Premium	Dataverse requires premium or Dynamics license
Code Apps	Premium	Code Apps = custom app = premium
Elastic tables	Premium + capacity	Additional capacity charges apply
Managed Environments (runtime)	Premium or Dynamics	Not included in Developer Plan or M365
AI Builder	Premium + Copilot Credits or AI Builder credits	Credits consumed per use
Desktop flows (RPA)	Power Automate Premium (attended) or Process (unattended)	Separate from cloud flow licensing
Process Mining	Power Automate Premium	50MB data per user license

What's Included in M365?

Included	NOT Included
Standard connectors (SharePoint, Outlook, Teams, Excel, etc.)	Premium connectors
Canvas apps using standard connectors	Custom connectors
Cloud flows using standard connectors	On-premises data gateway
Power Apps in Teams (Dataverse for Teams)	Dataverse (full, outside Teams)
Up to 6,000 API requests/day	Additional API capacity

Dynamics 365 Seeded Rights

Users with Dynamics 365 Enterprise licenses get seeded Power Apps and Power Automate rights:

• Power Apps usage within the context of the Dynamics 365 application
• Power Automate usage within the context of Dynamics 365
• Premium connector access (within Dynamics context)
• Dataverse access (within the Dynamics 365 environment)
• Managed Environment entitlement

Important: Seeded rights are "within context" — building standalone apps/flows unrelated to the D365 application may require separate licensing.

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Capacity

Dataverse Storage Capacity

Type	Description	Included Per Tenant
Database	Row data, metadata	Varies by license count
File	Attachments, images, notes	Varies by license count
Log	Audit logs, activity logs	Varies by license count

Check capacity: Power Platform Admin Center → Resources → Capacity

API Request Limits

License	Daily Limit (per user/flow)
Power Apps Premium / Power Automate Premium	40,000 requests/day
Power Automate Process	250,000 requests/day
M365 seeded	6,000 requests/day
Dynamics 365 Enterprise	20,000 requests/day
Pay-as-you-go (per app)	6,000 requests/user/app/day

Protection limits: Separate from entitlement limits. If a user/flow exceeds protection limits (e.g., 6,000 requests per 5-minute window), requests are throttled with HTTP 429 responses. Use Retry-After header.

API Request Overage

With pay-as-you-go enabled, requests above the daily entitlement are billed to Azure:

Overage rate: $0.00004 per request (illustrative — check current pricing)

Example:
  User with 40,000/day entitlement uses 50,000 in a day
  Overage: 10,000 requests × $0.00004 = $0.40

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AI Builder / Copilot Credits

Current State (2025-2026 Transition)

Timeline	What Happens
Now	AI Builder features in Power Apps/Automate consume AI Builder credits first, then Copilot Credits
Nov 2025	New customers cannot purchase AI Builder add-ons — must buy Copilot Credits
Nov 2026	Seeded AI Builder credits (from Premium licenses) removed for ALL customers
Ongoing	Agents and agent flows always consume Copilot Credits (never AI Builder credits)

Credit Sources

Source	Credits	Notes
Power Apps Premium (seeded)	5,000 AI Builder credits/user/month	Removed Nov 2026
Power Automate Premium (seeded)	5,000 AI Builder credits/user/month	Removed Nov 2026
AI Builder add-on	1,000,000 credits/add-on/month	Renewal only (existing customers)
Copilot Credits prepaid pack	Per pack	New currency for all AI features
Pay-as-you-go	Per use via Azure	No upfront commitment

Monitoring AI/Copilot Credit Usage

Power Platform Admin Center → Resources → Capacity
  → AI Builder credits tab (shows consumption per environment)
  → Copilot Credits tab (shows consumption per environment)

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Cost Optimization Patterns

Pattern 1: Start with Pay-as-you-go

New app, uncertain adoption → Enable pay-as-you-go
  → Monitor usage for 3 months
  → If consistent usage: switch to per-user licenses (cheaper at scale)
  → If sporadic usage: keep pay-as-you-go (cheaper for low volume)

Break-even analysis:

Pay-as-you-go:  $10/active user/app/month
Per-user:       $20/user/month (unlimited apps)

Break-even: 2 apps per user
  - User uses 1 app → pay-as-you-go cheaper ($10 vs $20)
  - User uses 3 apps → per-user cheaper ($20 vs $30)

Pattern 2: Per-App for Targeted Deployment

Specific app used by a large group of occasional users
  → Per-app license ($5/user/app/month)
  → Cheaper than per-user if users only need one app
  → Stackable: user can have multiple per-app licenses

Pattern 3: Process License for Shared Automations

Critical business process (e.g., invoice processing)
  → One Process license ($150/month) covers:
    - The main flow
    - All child flows
    - All associated flows in the same solution
    - Unlimited users
  → Much cheaper than licensing every user who benefits

Pattern 4: License Auto-Claim

Power Platform Admin Center → Settings → License auto-claim
  → Enable auto-claim for Power Apps
  → When a user opens an app requiring Premium, a license is auto-assigned
  → Prevents over-provisioning (only users who actually use get licenses)

Pattern 5: Monitor Before Buying

1. Deploy CoE Starter Kit for inventory visibility
2. Identify which apps use premium features
3. Identify how many users actively use each app
4. Map to optimal license mix (per-user vs per-app vs pay-as-you-go)
5. Purchase based on actual usage, not estimates

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Common Gotchas

Gotcha	Impact	Prevention
Code Apps = Premium	Every user of a Code App needs Premium or per-app license	Confirm licensing before building Code Apps for broad audiences
Custom connectors = Premium	Any app using a custom connector requires Premium	Document connector requirements in spec phase
On-prem gateway = Premium	Gateway connections require Premium licensing	Plan for Premium if using on-premises data
Elastic tables = Premium + capacity	Elastic tables need Premium AND consume extra storage capacity	Evaluate storage cost before choosing elastic tables
AI Builder credits disappearing	Seeded credits removed Nov 2026 — plan for Copilot Credits	Budget for Copilot Credits or pay-as-you-go for AI features
API request limits	Exceeded limits = throttled (429 errors)	Monitor via Admin Center, buy capacity add-ons if needed
Pay-as-you-go without monitoring	Unexpected Azure bills	Set Azure cost alerts, review monthly
M365 users hitting premium features	App fails at runtime with licensing error	Test with M365-only user before deploying
Process license per environment	Process license covers one environment only	Budget for Process license per environment (dev/test/prod)
Managed Environments without Premium	Developer Plan doesn't entitle Managed Env at runtime	Ensure production users have Premium or Dynamics licenses

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License Enforcement Errors

Error	Cause	Resolution
"This app requires a Power Apps Premium license"	User lacks Premium or per-app license	Assign license or enable pay-as-you-go
"EntitlementNotAvailable" (AI Builder)	No AI Builder or Copilot Credits in environment	Allocate credits or enable pay-as-you-go
"QuotaExceeded" (API requests)	User/flow exceeded daily API request limit	Wait until next day or purchase capacity add-on
HTTP 429 (Too Many Requests)	Protection limit exceeded (6,000 req/5 min)	Implement retry with Retry-After header
"Flow needs a Premium license"	Flow uses premium connector without license	Assign Premium license to flow owner or Process license to flow
"You need a license to use this feature"	Managed Environment feature without entitlement	Assign Premium, Dynamics, or appropriate license

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License Decision Tree

Does the app/flow use premium connectors, custom connectors, or Dataverse?
  ├── No → M365 seeded license is sufficient
  └── Yes → How many users?
        ├── < 10 users → Per-app ($5/user/app)
        ├── 10-50 users using 1-2 apps → Per-app ($5/user/app)
        ├── 50+ users or 3+ apps per user → Per-user Premium ($20/user)
        └── Uncertain adoption → Pay-as-you-go ($10/active user/app)

Does the flow run unattended RPA?
  ├── No → Power Automate Premium ($15/user) for the flow owner
  └── Yes → Power Automate Process ($150/bot) per machine session

Does the solution use AI Builder or Copilot Studio?
  ├── Light usage → Seeded credits (until Nov 2026) or pay-as-you-go
  ├── Moderate usage → Copilot Credits prepaid pack
  └── Heavy usage → Copilot Credits prepaid pack + pay-as-you-go overflow

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Anti-Patterns

• Building with premium features without confirming licenses — app works in dev (developer has Premium), fails for end users (who don't)
• Ignoring API request limits — designing high-throughput integrations without checking protection limits
• Using pay-as-you-go without Azure cost alerts — runaway costs from unexpected usage spikes
• Over-licensing — buying per-user Premium for 500 users when only 50 use premium features (use per-app instead)
• Under-licensing — not licensing flow owners, causing silent flow failures
• Assuming M365 includes everything — M365 only covers standard connectors; premium features require separate licensing
• Ignoring the AI Builder credit sunset — planning for AI features without budgeting for Copilot Credits post-Nov 2026
• Not using license auto-claim — manually assigning licenses instead of letting the platform assign on first use
• Testing only with admin accounts — admins have full licenses; test with representative end-user licenses
• No cost monitoring — deploying solutions without tracking license consumption or API usage

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Related Skills

• env-strategy — Managed Environments licensing requirements
• governance — License compliance monitoring via CoE Starter Kit
• architecture — License implications of architecture decisions
• code-apps — Code Apps require Premium licensing
• copilot-studio — Copilot Studio licensing and Copilot Credits