Power Apps licensing explained for a small business
Power Apps licensing has a reputation for being baffling. For a small business it actually comes down to one question: are you building within Microsoft 365, or beyond it?
The one distinction that matters
Your Microsoft 365 Business licence includes the right to build Power Apps that use standard connectors and store data in SharePoint or Excel. You only pay extra when you need premium connectors (to external systems) or Dataverse (a more robust, secure database). That single line explains most of the confusion.
| What you are building | Licence needed | Indicative cost |
|---|---|---|
| App over SharePoint lists, standard connectors | Included in M365 Business | No extra cost |
| App needing a premium connector (CRM, SQL, etc.) | Power Apps Premium (per user) | ~£16.40 |
| App on Dataverse (robust data, security, scale) | Power Apps Premium (per user) | ~£16.40 |
| Automation behind the app (standard) | Included in M365 Business | No extra cost |
| Automation needing premium connectors / Dataverse | Power Automate Premium (per user) | ~£12.30 |
How to keep costs down
Practical ways to avoid premium licences
- Use SharePoint lists as your data store where the volume and complexity allow
- Stick to standard connectors unless an external system genuinely requires premium
- Right-size: not every internal tool needs Dataverse
- License the few power users who need premium, not everyone
- Decide the data store deliberately at design time — it drives the whole cost
When premium is the right call
Dataverse and premium connectors exist for good reasons: stronger security, scale, relationships between data, and proper integration with line-of-business systems. The goal is not to avoid them dogmatically — it is to choose them deliberately, only when the requirement justifies the per-user cost.
Indicative UK list prices, per user per month, ex-VAT, mid-2026. Microsoft is changing some Microsoft 365 and Copilot prices from 1 July 2026 — always confirm current pricing before you commit.
Want this applied to your business?
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