Microsoft license shuffle means Power Apps users could break the bank

New restrictions seem to usher users toward expensive Dynamics 365 subscriptions

Updated Microsoft appears to have updated the licensing rules for its popular Power Apps, which could force some customers to shift their users onto the more expensive licenses, creating a significant hike in costs.

A since-deleted blog post from analyst Directions on Microsoft stated this week that organizations building applications in the Power Apps environment would in some cases have to switch users from the Power Apps license to the Dynamics 365 Enterprise license at ten times the cost.

Andrew Snodgrass points out that under previous rules, users licensed with Power Apps subscriptions could access data in Dynamics 365 applications – a suite of enterprise apps from Microsoft including CRM, ERP, and HR – by reading data, so long as they did not modify data in "restricted" tables.

However, Microsoft's new Dynamics 365 Licensing Guide for March 2024 [PDF] links to a solution checker service under the heading Verify License Compliance.

It appears to make changes to definitions of "restricted tables," which could increase licensing costs for organizations that have built Power Apps around Dynamics 365.

Snodgrass reckons the solution checker list of "restricted tables" adds several more tables that were not restricted before.

For example, Microsoft cites "restricted operations" to refer to processes such as generating an invoice that would have run on non-restricted tables but according to the new rules now require a full Dynamics 365 subscription.

The "restricted controls" in the solution checker refers to embedded controls – used, for example, in forecasting – that if run in the Power Apps solution will require users to have a full Dynamics 365 subscription, Snodgrass said.

The cost could be significant to users, depending on how many Power Apps licenses they have and how many are affected. Dynamics 365 Team Member is $8 per user per month, Power Apps Premium is $20 per user per month, and Dynamics 365 CRM Enterprise licenses are $95 per user per month.

As an illustration, Snodgrass points out that 1,000 users with Power Apps subscriptions at $20 per month ($240,000 per year) are significantly less than 1,000 users with Dynamics 365 Enterprise licenses at $95 per month ($1.14 million per year).

"What I came away with was a feeling of disappointment. I was hoping the solution checker would be a step forward in helping customers understand what licenses they needed," said Snodgrass.

"Instead, it looks like Microsoft is using it as an opportunity to further limit Power Apps subscription rights and increase cost for customers who deployed Power Apps solutions in good faith," he concluded.

Snodgrass has asked Microsoft to clarify these points, as has The Register.

Microsoft Dynamics 365 and its associated community of low-code-built Power Apps have enjoyed popularity in the mid-market, finding a sweet spot between businesses requiring more powerful software than simple accounting packages and spreadsheets and global organizations that might need more complex and expensive enterprise applications from vendors such as SAP, Oracle, and Infor. ®

Updated to add on March 18:

A Microsoft spokesperson has been in touch to say: "We are not introducing any changes or updates to our licensing requirements for Dynamics 365 or Power Apps solutions. The new Solution Checker provides an improved and simplified way for customers to understand licensing requirements and optimize user licensing.

"The Solution Checker specifically addresses adherence to the most common Dynamics 365 Sales license requirements when building custom Power Apps applications. These new capabilities, along with upcoming new tools and features reports, first cover Dynamics 365 Sales and will be extended to additional Dynamics 365 Customer Engagement workloads soon."

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