Licensing labyrinth for Power Apps and Dynamics 365 must be clarified, warns expert

Rules still unclear for Microsoft users making potentially costly decisions on enterprise applications

Microsoft needs to clarify licensing arrangements around its low-code Power Apps and Dynamics 365 software to prevent users from receiving unexpected bills for their projects.

Or so says Andrew Snodgrass, an analyst with Directions on Microsoft, who reckons the cloud and software giant should clear up confusion over licensing arrangements after it published "clarification" on rules that appeared to show organizations might require more licenses under the more expensive Dynamics regime than they realize.

Last week, The Register reported that users licensed with Power Apps subscriptions had been able to 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 released a Dynamics 365 Licensing Guide for March 2024 [PDF] that links to a solution checker service under the heading Verify License Compliance.

Snodgrass has told us that the solution checker list of "restricted tables" added several more tables that were not restricted before, potentially increasing licensing costs for users who have built Power Apps based on an earlier list of "restricted tables."

Following that report, Microsoft denied it had made changes to the licensing regime. A spokesperson said the solution checker was designed to offer an "improved and simplified" way for customers to understand their licensing. It was launched to address the "most common" Dynamics 365 license requirements when building custom Power Apps applications, Microsoft said.

But in an update to his blog post, Snodgrass says that users need more clarity from Microsoft to truly understand the licensing implications of building software with the low-code Power Apps tools and linking them to Dynamics enterprise applications.

Speaking to The Register, Snodgrass said the terms about unrestricted tables were in the license guide since 2018, but there was a change in the March 2024 edition of the Dynamics 365 Licensing Guide.

"I don't think they're adding new rules. But they weren't clear before, and now they're trying to enforce something they weren't clear on, and I'm gonna let people know about it," he said.

For organizations with thousands of users, the difference in costs could be dramatic. On a per month, per user basis, Dynamics 365 Team Member is $8 per user, Power Apps Premium is $20, and Dynamics 365 CRM Enterprise, for example, is $95.

In his updated blog, he suggests Microsoft was having difficult conversations with customers who had built user applications and used the cheaper Power Apps app based on the earlier guidance, but might now require a more expensive license under the clarified rules.

He called on Microsoft to make clear to users that there are several other conditions that limit the use of Power Apps licensing.

"Power Apps applications that perform specific Dynamics 365 application actions, perform CRUD (create, read, update, and delete) operations on certain tables, or use Dynamics 365 application components may require Dynamics 365 licenses," he said.

"The lists of specific actions, operations, and components are in the respective Dynamics 365 application Use-Rights tables, and some are available by using the Solution Checker. Also, in some cases, a Power Apps application may update non-restricted tables that will result in the database automatically calling an operation that requires a Dynamics 365 license, even though the Power Apps application is designed to follow all the rules for Power Apps licensing."

Snodgrass also warned users about using the solution checker tool without being aware that it could share details of their setup with Microsoft, which might have implications for a license audit and any subsequent negotiations.

"Does it record that you've used the solution tracker? Does it record your Dynamics 365 instance in your Power Universe environment and the application that it just checked? I don't know. There's no details on it. So from my standpoint, I'd be a little hesitant," he said.

The Register has offered Microsoft the opportunity to respond to the updated blog and specifically asked if data from the solution checker could be used in a license audit.

Snodgrass said he suspects any deal subsequent to the license clarification would in any case be subject to negotiations. He even suggested Microsoft might add another tier of licensing between Power Apps and Dynamics to appease users.

Concerned users will have to wait and see. ®

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