Someone on your team says they can "just build an app for that," or "automate that with a flow." They are probably right about the building. What surprises people is the bill, which arrives months later, after the thing is already load-bearing.
The Power Platform is Microsoft's set of low-code tools: Power Apps for applications, Power Automate for workflows, Power Pages for websites aimed at people outside your company, and Dataverse, the database underneath. Some of it is included with the Microsoft 365 subscription you already pay for, some is not, and the boundary is not where most people assume.
We quote no prices here, because Microsoft changes them and a stale number is worse than none. Current figures are on the Power Apps pricing page and the Power Automate pricing page. The full rulebook is the Microsoft Power Platform Licensing Guide, which Microsoft republishes every few months.
The distinction that drives almost every surprise: standard versus premium connectors
What it means for your money: a workflow built entirely on standard connectors typically costs nothing beyond the Microsoft 365 licenses you already own. The moment it touches a premium connector, an on-premises system, or Dataverse, every person who uses it needs a paid license, or the workflow needs one of its own.
A connector is the piece that lets an app or workflow talk to another system, and Microsoft classifies each one as standard or premium. Standard connectors are, roughly, your Microsoft 365 world and a set of common cloud services: SharePoint, Outlook, Teams, OneDrive, Excel, and similar (full list). Premium connectors are, roughly, everything that constitutes a real business system: Azure SQL and other Azure data services, Dynamics 365 applications including Microsoft Dynamics 365 Business Central, Amazon S3, Adobe PDF Services, Azure OpenAI, and hundreds of other platforms (full list).
Three other things sit on the paid side alongside premium connectors: custom connectors, meaning a connection built by hand to a system with no ready-made connector; on-premises data, reached through the on-premises data gateway, so anything living on a server in your building counts; and Dataverse, the Power Platform's own database, which per Microsoft's licensing overview requires a standalone license for every person who uses an app built on it.
A form that collects a request in SharePoint, routes it to a manager in Outlook, and posts the result back to SharePoint is standard end to end. Add one step that writes the approved record into your accounting system, and the whole thing crosses the line.
What your Microsoft 365 subscription already covers
What it means for your money: this is genuinely free capacity, and for a large share of internal busywork it is enough. It is also narrower than it sounds.
Microsoft's licensing overview sets out the Power Apps rights inside Microsoft 365: creating, running, and sharing canvas apps (the drag-and-drop kind) that connect to Microsoft 365 data and to cloud services through standard connectors, in a browser or on a phone. It explicitly excludes on-premises data, premium connectors, and custom connectors.
For Power Automate, the equivalent rights cover cloud workflows on standard connectors, with one nuance in Microsoft's deep dive on specific licenses: a workflow using premium connectors is covered if it is "in context," meaning it belongs to and is triggered by the application the rights came from. A workflow standing on its own needs its own paid license.
There is also a Power Automate Free license, which any work or school account gets on first sign-in. It allows building and running workflows on standard connectors, but not sharing them.
Power Apps licensing
What it means for your money: you can pay per person for unlimited apps, per person per app, or only for the people who open an app in a given month. Which is cheaper depends on how many apps the average user touches.
Power Apps Premium is the per-user plan, and it is the old "Power Apps per user" plan renamed; the licensing FAQ confirms there is no difference beyond the name. A licensed user can build and run unlimited apps and access unlimited Power Pages websites, with premium and custom connectors included.
Power Apps per app is the per-app plan. One license covers one app for one user within a single environment, and the licenses stack, so a user who needs three apps needs three of them. A canvas app embedded inside a model-driven app counts as one, not two.
Whether you can still buy the per app plan depends on how you buy. Microsoft's end of sale notice states that effective January 2, 2026, it is no longer available to new customers: Enterprise Agreement customers can still renew, customers on a Microsoft Products and Services Agreement lose it at agreement expiry with a 60-day window to move, and customers buying through a Cloud Solution Provider partner are not impacted. Confirm your own channel before designing around it.
Where the crossover sits. Per app cost scales with users multiplied by apps, while Premium is flat per user for unlimited apps. Per app wins when a handful of people each use one app, and Premium takes over once the average person needs several. The crossover is arithmetic once you have both current figures.
What a Dynamics 365 license already gives you. Dynamics 365 licenses include Power Apps and Power Automate rights to customize and extend those Dynamics applications, in the context of the licensed application's use rights. Building something that stands apart takes you into a standalone license. The same in-context rule applies to Power Apps licenses, which include Power Automate capabilities as long as the workflow uses the app's own data sources.
Power Automate licensing
What it means for your money: the cost driver is not workflow complexity. It is whether a person is present when it runs, and whether it touches anything premium.
Power Automate Premium is the per-user plan. Per Microsoft's types of Power Automate licenses, it covers standard, premium, and custom connectors, plus desktop automation in attended mode. Desktop automation, which Microsoft also calls robotic process automation, means software that clicks through an application the way a person would, used for systems too old or too closed to connect to properly.
Attended versus unattended is what changes the licensing shape. An attended automation runs on a person's own registered computer while they are signed in. An unattended automation signs itself into a machine, runs, and signs out, which is what you need for anything that happens overnight with nobody watching. Unattended automation is licensed by capacity rather than by person:
- Power Automate Process is assigned either to a machine, where it becomes one unattended worker running one desktop automation at a time, or to a single cloud workflow, where it lets unlimited people trigger that workflow regardless of their own license. Several unattended automations at once means one Process license per simultaneous run.
- Power Automate Hosted Process does the same on a machine Microsoft hosts, so you do not maintain the computer.
- Older names still circulate. The per-user plan, the per-flow plan, and the unattended add-on became Premium and Process; existing ones keep working, and Microsoft's guidance is to move at renewal.
One easily-missed clause: automating Microsoft 365 or Office 365 with an unattended automation requires a separate Microsoft 365 Unattended License under Microsoft's product terms.
Request limits and throttling, in plain terms
Every license carries a daily allowance of "requests," Microsoft's unit for individual steps: a connector call, a database read, a variable being set. Failed steps and retries count too. Per Microsoft's request limits and allocations page, the published allowances are 40,000 per day for a user with Power Automate Premium or Power Apps Premium, 6,000 for a user working under Microsoft 365 rights or the Free license, and 250,000 for a workflow carrying a Process license, with a ceiling of 100,000 in any five-minute window.
If you go over, that user's workflows slow down. The limit is tracked per user or per workflow on a rolling 24-hour basis, so one heavy user does not slow anyone else. Microsoft notes that every organization is currently in a transition period with more generous enforced limits, and that stricter enforcement is still some way off. A workflow that looks fine today could be throttled later, so design repeated steps against the published numbers.
Dataverse, the database underneath
What it means for your money: Dataverse is where the storage bill lives, metered in three separate buckets that do not fully cover for each other.
Dataverse stores your tables and records, enforces permissions, and is what model-driven apps and Dynamics 365 applications run on. Choosing it is a licensing decision as much as a technical one, because every person using an app built on it needs a standalone Power Apps or Power Automate license.
Capacity accrues two ways: your tenant receives a one-time default allocation with its first qualifying Power Platform or Dynamics 365 subscription, and each license you buy adds a little more to the pool. The per-license amounts are small and specific: a Power Apps per-user license adds 250 MB of database and 2 GB of file capacity, a per app license adds 50 MB and 400 MB, and a Power Automate Premium license adds 250 MB and 2 GB. None add log capacity.
The three buckets are database (your records), file (attachments, photos, documents), and log (audit history, if auditing is on). Per Microsoft's capacity storage documentation, spare database capacity covers a shortfall in log or file, and spare log covers file, but spare file capacity covers neither. Add-on capacity is sold in 1 GB increments, per bucket.
Two details catch people. Every environment consumes 1 GB of database capacity whether or not it has a database in it. And when you run out, warnings arrive at 15% and 5% remaining, after which you cannot create, copy, or restore an environment until you free space or buy more. An app that lets field staff photograph completed work consumes file capacity faster than anyone forecasts, and that is the most common route to a storage add-on nobody planned for.
Paying for use instead of seats
What it means for your money: for an app many people could use but few open in a given month, paying per active user beats buying everyone a seat.
Microsoft's pay-as-you-go plan links an environment to an Azure subscription, and usage is billed to Azure with no license commitment and no seats to forecast. Microsoft's stated use cases are apps shared with a large audience whose use is infrequent or unpredictable, and establishing usage patterns for a new app before committing to prepaid licenses.
Check the state of play rather than assuming it. Per the pay-as-you-go meters documentation, the Power Apps per-app meter, which counts unique users who opened an app at least once in the month, is generally available. The Power Automate and Power Pages meters are labeled preview, the Dataverse storage meter bills overage to Azure, and the requests meter is reported but not yet billed.
One trap: turning on pay-as-you-go in an environment causes prepaid per-app licenses and unattended add-ons assigned there to be ignored rather than consumed. They can be reassigned, but only if someone notices.
Power Pages, for people outside your company
A website where customers, members, suppliers, or applicants sign in and interact with your data is Power Pages, licensed by visitors rather than staff seats. Two meters: authenticated users per website per month, and anonymous users per website per month. Both count unique people in a calendar month rather than visits, so someone who logs in daily counts once. Capacity is bought in packs or consumed through the pay-as-you-go meters. Anyone holding a Power Apps per-user license or a Dynamics 365 enterprise license is not counted.
Copilot Studio, Microsoft's tool for building conversational agents, sits alongside the Power Platform on its own consumption-based model, and we cover it separately.
Environments, and why the default one matters
What it means for your risk: the default environment is where things get built by accident and then depended on.
An environment is a container for apps, workflows, and data. The types are production, for anything you rely on; sandbox, for development and testing; trial, which expires; developer, intended for one person; and the default environment.
Every tenant gets one default environment automatically, and every licensed user is automatically given the maker role in it. Microsoft describes it as intended for experimentation and lightweight development, states it offers no backup guarantees, and says it should not be used for production workloads. It cannot be deleted, and custom SharePoint forms built with Power Apps land there by default.
Governance you should expect from an IT partner, all of it documented in Microsoft's guidance on managing the default environment: data policies controlling which connectors can be combined, so a workflow cannot quietly move data from an internal system to a personal cloud account; a written environment strategy, so apps graduate out of the default environment as their audience and sensitivity grow; regular review of apps and workflows left without an owner; sharing limits; and a named administrator on the default environment, which is not assigned automatically.
The gotchas that catch non-technical buyers
A single step changes the licensing shape of everything. Add one premium connector to a working, free workflow, and every person who triggers it needs a paid license, or the workflow needs a Process license.
"Free with Microsoft 365" has a hard edge at Dataverse. Limited Dataverse capabilities appear in some Microsoft 365 licenses to support products like Project. Microsoft is explicit that these do not entitle you to run custom apps or workflows on Dataverse.
Trials become production dependencies. Self-service purchases and trials are enabled by default for Power Platform products, and Power Apps trials run 30 days while Power Automate trials run 90. Somebody solves a real problem during a trial, the team starts relying on it, and the license question surfaces when the trial ends rather than when the work started. That is how the products are designed to spread, and it is the normal path by which useful things get built, so the answer is an inventory and a review cadence. Administrators can view every self-service subscription, take one over, and set each product to Allow, Allow for trials only, or Do not allow under Settings then Org settings in the Microsoft 365 admin center, per Microsoft's self-service purchase guidance.
Storage is three meters, not one, and prepaid capacity is ignored in a pay-as-you-go environment. Being comfortable on database capacity tells you nothing about file capacity, and mixing purchasing models in one environment quietly wastes what you already bought.
Unattended automation of Microsoft 365 needs its own license. Easy to miss when the automation is "just opening Excel."
How you buy, and what it locks in
Seat-based Microsoft subscriptions have two separate settings: the term, meaning how long you commit, and the billing frequency, meaning how often you are invoiced. Terms of one month, one year, and three years exist, and the price differs by term. Note that these settings are independent, so an annual term can still be billed monthly if nobody changes it.
Commit annually and pay annually. The annual term costs less per seat than month-to-month, paying once up front replaces 12 invoices and 12 approvals with one of each, and your rate is fixed for the term rather than exposed to the next price revision. The premium on month-to-month buys the ability to walk away, and a business standardizing its internal apps on this platform is not planning to walk away inside a year.
Mid-term flexibility is limited, and in one direction. Per Microsoft's cancellation policy and term and billing documentation, license-based subscriptions carry a prorated-refund cancellation window of seven calendar days from purchase, and that window does not reopen until renewal. You can move to a longer term mid-term but not a shorter one, and while adding seats mid-term is normally possible, reducing them generally waits for renewal. Buy the number you are confident about and add rather than guess high.
Buying through a Cloud Solution Provider partner rather than direct from Microsoft changes a few things. Term and billing changes are easier to manage, some plans stay available in that channel longer (the Power Apps per app plan being the current example), and storage capacity is managed through the partner. It also means one conversation covers licensing and environment strategy together, which matters more here than in most Microsoft products.
Three scenarios, and the licensing each implies
An internal request-and-approval workflow. A form, a manager approval, a record of the decision. If it lives entirely in SharePoint, Outlook, and Teams, your existing Microsoft 365 licenses cover it, subject to the 6,000-request daily allowance. If it has to write into your accounting or operations system, you choose between two shapes: license the people who trigger it with Power Automate Premium, or put a Process license on the workflow itself so anyone in the company can trigger it. With a handful of approvers, per-person is simpler. With a workflow the whole company uses, licensing the workflow usually wins.
A field data-capture app for a dozen users. Photos, offline use, and structured records point at Dataverse, which means standalone Power Apps licensing for all 12 people. If they use this one app only, compare per app, Premium, and the pay-as-you-go meter; with a single app and a small, steady group, per app or pay-as-you-go usually wins. Budget for file storage separately.
A customer-facing portal. This is Power Pages, and the cost driver is how many unique people sign in or browse each month, not how many pages you build. Model that number honestly, choose between prepaid packs and the pay-as-you-go meters based on how predictable it is, and plan on a dedicated environment with its own data policies, since this one faces the internet.
Where to start
If something is already built and you are working out what it costs to keep, the fastest route to an answer is a short review of what exists: which apps and workflows are running, which connectors they touch, which environment they live in, and who depends on them. That usually takes an hour, and it turns a vague worry into a specific number.
If nothing is built yet, bring us the process you want to fix. We will tell you which side of the connector line it falls on before anyone writes anything, which is the cheapest moment to find out.