Power Apps licensing, explained without the sales pitch

Whether you need Power Apps premium licences depends on one thing: what data the app touches. The question is almost never "how many apps". If the app reads and writes SharePoint, Excel, Outlook or Teams data, your Microsoft 365 licence very likely covers it. The moment it uses Dataverse, a premium connector or an on-premises gateway, every user of that app needs a paid plan.

What you already have

Your Microsoft 365 licence includes Power Apps for use with SharePoint, Excel, Outlook and Teams data. Microsoft calls these standard connectors. If your app reads and writes SharePoint lists, you very likely need no extra licence, however many apps you build and however many staff use them.

That covers more than people expect. Leave requests, site inspections, asset registers, equipment bookings, onboarding checklists, incident reports and purchase requests can all run on SharePoint lists with the licences you already pay for.

Microsoft reclassifies connectors from time to time. Before you commit to a design, check the connector's documentation page — it says plainly whether it is standard or premium.

When you need a premium licence

You need a paid plan the moment the app uses:

• Dataverse as its data store
• Premium connectors — SQL Server, Salesforce, HTTP, most third-party systems
• On-premises data gateways to internal systems

The trap is that this is decided per app, not per feature. One premium connector, used on one screen by one administrator, makes the whole app premium for everyone who opens it.

Working out what you need

You can answer the licensing question before anything is built. Walk through it in this order, with the app's design on one page in front of you.

If the answer at step three is "no", stop there. Your licence cost for the app is zero, and the rest of this post does not apply.

The two paid options

Per-app (~AU$7.50 per user, per app, per month). Sensible when a defined group uses one or two apps. Twenty site supervisors using one inspection app is a per-app scenario.

Per-user (~AU$29.90 per user, per month). Unlimited apps. On these indicative prices, per-app stays cheaper up to three premium apps per person; per-user only wins outright from the fourth. It is worth considering at three if more are genuinely on the way — but a person using three or more premium apps is less common than it sounds.

Microsoft also offers pay-as-you-go billing through an Azure subscription, charged for users who actually open the app in a given month. It can suit apps with irregular use, such as an annual stocktake. Pricing and plan names change, so check current Microsoft pricing before you budget.

Both paid plans include rights to run Power Automate flows in the context of the licensed app. Standalone premium flows that run outside an app have their own licensing — confirm that separately if your design relies on them.

What three years looks like

Licence cost is monthly and small, which is why it gets ignored. Multiply it out over the life of the app and it often becomes the biggest number in the business case.

The same app, with the same screens, can cost nothing or tens of thousands of dollars over three years. The difference is one decision about where the data lives. Run your own numbers with a smaller group and a single app and the per-app figure still deserves a line in the budget.

Three common scenarios

A site inspection app for 25 supervisors. Inspections are saved to a SharePoint list, photos to a document library, and a flow emails the project manager when an item fails. Every connector is standard. Licence cost: nothing beyond Microsoft 365.

The same app, writing to the job management system. Someone asks for inspections to post straight into the job system through its API. That needs the HTTP connector or a custom connector — both premium — so all 25 supervisors now need a per-app licence. Often the cheaper answer is to keep the app on SharePoint and sync to the job system on a schedule, outside the app.

A project controls suite for a finance team of six. Jobs, variations, cost codes and invoices, with relationships between them and row-level security. This is where Dataverse earns its place. Six people, possibly across four apps, may justify per-user licences — and the licence cost is small next to the risk of forcing relational data into flat lists.

The mistake that costs the most

Reaching for Dataverse by default. It is a genuinely better data platform — relational, governed, properly secured — but it converts a free app into a licensed one for every user. For a simple register or request form, a SharePoint list does the job at no additional cost.

Choose Dataverse when you need relationships between tables, row-level security, or real data volume. Not because it is the recommended option in the documentation, and not because a developer prefers it. We set out the trade-offs in more detail in Dataverse vs SharePoint lists.

There are good reasons to pay. An app tracking jobs, variations, suppliers and invoices with proper relationships between them will strain SharePoint lists. An app where field staff must see only their own records, enforced at the data layer rather than hidden on screen, needs Dataverse security. An app that must work offline on a remote site benefits from it. Pay in those cases, deliberately.

Model the licence cost over three years before you choose the data store. It frequently exceeds the build cost.

Licences you might be paying for already

Before buying anything, check what is in your tenant. Some organisations already hold Power Apps per-user or per-app licences bought for an earlier project, or capacity bundled into another Microsoft agreement. In the Microsoft 365 admin centre, the Licences page under Billing lists every product you hold and how many are assigned. Unassigned premium licences are a common find in a Microsoft 365 licence audit.

Before you approve a premium app

What to do next

Take the app you are considering and list its data sources on one page. If every one is SharePoint, Excel, Outlook or Teams, you are very likely covered and can move straight to scoping — our scoping checklist for a first Power App is a good place to start. If something premium appears, run the three-year sum before anyone builds.

If you want a second view on the design and its licence implications, our Power Apps service explains how we choose the data store, and we put the licence cost next to the build cost before you commit.

Prices are indicative Australian list rates and change — check current pricing before budgeting.