Licensing8 min read
Power Platform licensing, explained without the sales pitch
What's already included in your Microsoft 365 subscription, what genuinely costs extra, and where the bill surprises people.
Licensing is where most SME automation projects meet their first unpleasant surprise. The confusion is understandable. The boundary between 'included' and 'premium' isn't where common sense would put it. These are the checks to make before commissioning a build.
What you almost certainly already have
Most Microsoft 365 business plans include Power Automate and Power Apps for use within the Microsoft 365 services themselves. In practice that covers a lot of real work: flows over SharePoint lists, Outlook, Teams, OneDrive and Excel, plus apps built on SharePoint as the data source. A large share of the automations a smaller business actually needs sit entirely inside this envelope.
What costs extra
- Premium connectors — anything reaching outside Microsoft's own services, including SQL Server, Salesforce, custom HTTP endpoints and most finance systems.
- Dataverse — the relational store. Worth it once relationships and proper security roles matter, and rarely worth it before that.
- AI Builder — consumed in credits, not seats, so document processing volume drives the bill.
- Power Pages — external-facing portals, licensed by authenticated user or anonymous visit.
Where the bill surprises people
Three areas to check. First, an HTTP action added late in a build to reach one small system, which tips the whole flow into premium. Second, AI Builder credits estimated from average document volume instead of peak month. Third, per-user premium licences bought for everyone when only the four people who trigger the flow need them. The licence follows the user who runs it, not everyone the output touches.
How to keep it honest
Ask any supplier, us included, for the licence position in writing before design starts, itemised by product, seat count and consumption estimate, with the peak-month figure rather than the average. If they can't produce that in a page, they haven't designed it yet.
Microsoft changes this model regularly. Check current terms at the point of purchase, and don't trust any article, including this one.