Exploring CDS for Apps Platform Licensing (PowerApps)

When Microsoft originally made the Spring 2018 release announcement for Business Applications products and essentially promoted XRM to be the Common Data Service for Apps, they didn’t yet disclose the finer details about how the CDS for Apps license model would work outside the Dynamics 365 Apps and Plans that we’re familiar with. On May 1st the details were revealed alongside the blog post “Which PowerApps plan do I need for model-driven apps and CDS for Apps”.

In his earlier blog post, Frank Weigel announced that PowerApps Plan 2 officially became the platform SKU for CDS for Apps. In the updated PowerApps pricing page we can see that actually the license types and prices have effectively remained the same as they were before Spring 2018 release:

The changes are mostly on the new Model-driven App side (formerly XRM), but since there’s now also a wealth of server-side functionality made available for PowerApps via the new CDS for Apps concept, it also affects the Canvas Apps designers. Let’s dive into the details and explore the license model from a few different angles.

PowerApps for the Productivity Folks

A customer who’s got Office 365 will already have the specific PowerApps license type included in that subscription. As stated by the Licensing overview page over on docs.microsoft.com, this allows them to create and run applications within the context of this service (O365), as well as connect to “common cloud services including Box.com, Facebook, and many more”. Not D365 and not CDS, but that still covers a lot of interesting scenarios for building an app to replace a manual process that used to run on email or Excel.

Since it never was a “pure business app” like Dynamics 365 CRM and ERP products, PowerApps has grown into a highly versatile tool that connects with the more mainstream Microsoft services. You can embed them into a wide variety of places within your MS Cloud environment, like on Power BI dashboards or modern SharePoint pages. For your data collection forms, they are InfoPath on steroids. An Office 365 customer might therefore get pretty far with just mashing up the UI’s of different apps and storing data into less structured places like SharePoint lists or OneDrive files.

If they’d like to introduce more solid capabilities for relational data modeling, process automation and granular security management, the PowerApps Plan 1 would unlock this scenario for €5.90 per user. With this the data could be managed in CDS for Apps database, a much more robust back end for a business application than simple lists in the Office tools. The users still couldn’t access any Dynamics 365 style UI, since Plan 1 doesn’t grant the access to Model-driven Apps. You would need to construct the required lists, forms, navigation and client side logic with the traditional PowerApps “maker” experience and publish it through the same channels as what the Office 365 users already have access to.

This Plan 1 approach could be viewed as the first step up from the starting point where a knowledgeable power user or “citizen developer” had built a PowerApp with the license they already had via Office 365 and now the app needs to be adopted more widely within the organization. The new admins and designers of the app would need a Plan 2 license for €33.70 but the users could be assigned the cheaper Plan 1 license for €5.90 a piece. It shouldn’t be too difficult a business case to build if there’s real demand for the app and it either saves time or money in some business process that used to be a painful manual operation before Microsoft Cloud came along. If things work out well, these same P1 licensed users can then go and use any number of apps that the P2 power users design for them, since each P2 gets 2 databases with it and no limits on how many PowerApps you have on top of those.

PowerApps for the Dynamics Crowd

Dynamics 365 has a powerful, growing set of first party Apps from Microsoft, but sometimes there isn’t an app for that particular business process you’re looking to digitally transform with the help of MS Cloud. This is where the power of the platform comes to rescue and saves you from custom software development and maintenance efforts. Earlier this platform was called “eXtended Relationship Management” (XRM) but now we refer to it as the Common Data Service for Apps. We don’t even need to buy a Dynamics 365 license for it anymore, since we could just use PowerApps Plan 2 instead.

What sets Plan 2 apart from Plan 1 is that you can work with the application data via the Model-driven App UI that is automatically generated for you when you design your data model. Sure, you’ll need to configure the details of it to deliver a pleasant UX, but you’re not forced into pixel-perfect design work of the Canvas App. Navigation is provided for you, there’s the full search capability, you can quickly configure dashboards, Business Rules can make your entity forms adapt to field data values, and so on. With the new Unified Interface your Model-driven App will adapt to any screen size, and the solution framework ensures you can easily transport your customizations across environments. The Model-driven sample apps will give you a quick idea of what a non-Dynamics 365 app on CDS might look like.

There are limitations, though, and you’ll find them listed on the “license requirements for entities” page on CDS for Apps documentation. As mentioned, P1 users can’t access the Model-driven App UI, but they also aren’t authorized to access a Canvas App that runs on a CDS for Apps instance and uses entities that have real-time workflows or plug-ins associated with them. These require a P2 license, which unlocks the full XRM style functionality of the platform.

Now, just because the Dynamics 365 first party Apps from Microsoft are built on the same platform as your custom Model-driven Apps, that doesn’t mean a PowerApps P2 license would fully cover their usage. There’s a list of restricted entities that are used in MS apps like Sales, Customer Service, Field Service, that you aren’t allowed to touch without the proper Dynamics 365 license. For example, you’re free to work with leads and opportunities, but you can’t use cases or knowledge articles in your custom PowerApps – because Microsoft said so.

For an overview of the different license types and privileges, be sure to check out the great blog posts and ever so slick videos that MVP Scott Durow has created for explaning the topic of PowerApps to those of us who’ve got a Dynamics background.

PowerApps vs. Dynamics 365 License Model

Just because we now have something declared as Platform SKU on a Microsoft blog post doesn’t mean we get to skip the finer details laid out in the Dynamics 365 Licensing Guide. Anyone working on the partner side must have experienced the amount of documentation that goes into performing changes to the licensing practices of Dynamics products. (Remember that deck about transition from Dynamics CRM to Dynamics 365? Of course you do, how could you ever forget…) I’ve got a feeling that we’re going to see more licensing related information emerge about the new PowerApps Model-driven Apps offering in the near future, as this initial announcement raises many questions that need to be answered before customers and partners can fully embrace the new platform opportunities.

One of the more interesting questions is the positioning of PowerApps P2 against the Dynamics 365 Team Member license. With a list price of €6.70 this is almost as cheap as PowerApps P1, but in some areas it grants access to more features than you could get even with PowerApps P2. You can read data from any entity in the database (including “restricted entities”), as well as perform full CRUD operations on any custom entity + accounts, contacts, activities. You can also use the Dynamics 365 Outlook App as well as SharePoint integration for document management, which are off limits for the PowerApps P2 license priced at €33.70. Also the Canvas Apps UI is available for the Team Member when connecting to the Dynamics 365 instance, so it sounds like this might become an attractive option for licensing the end users of custom Model-driven Apps, too.

Keeping in mind that the full Dynamics 365 for Sales App license costs €80,10 with Enterprise functionality and a more restricted Professional version was recently launched at a price point of €54.80, the Platform SKU of PowerApps P2 at €33.70 could sound like an interesting option if you’d rather “roll your own” and build a My Sales App on top of the PowerApps platform. With no limits on number of custom entities, custom workflows or BPFs like with the Sales Professional license (the limits being 15/15/5), it would seem like in this scenario you actually could get pretty good value from the PowerApps P2 license.

At this moment it’s not all that clear whether the custom app approach would be sensible or not. While technically Microsoft still doesn’t enforce the license model restrictions on the platform side, allowing you to access even the MS provided Sales App with only a PowerApps license in the same tenant, their intent probably isn’t to allow you to take shortcuts and replicate their app features into your custom Model-driven App. The Dynamics 365 Licensing Guide still has this statement about custom entities:

“If the custom entity is based on or replicates the functionality of entities included in Microsoft Dynamics 365, or if the entity links to entities included in Microsoft Dynamics 365, then users accessing the custom entity must also be licensed to access the included or replicated entity. For example, users creating an entity that replicates the cases entity for a ticketing system would still require the user to be licensed for cases. In other words, customizations may only be performed against entities users are licensed to access.”

Now, when we are dealing the brand new PowerApps and CDS for Apps concepts, do the old rules from the Dynamics 365 world still apply? If yes, then a huge portion of use case for the PowerApps platform license would automatically be shot down, since you’d always first need to check if any similar functionality already exists in one of the (ever evolving) first party Apps from Dynamics 365 Customer Engagement product team. Then again, all the former XRM apps are now “powered by PowerApps” and running on the CDS for Apps platform, so in a way the PowerApps licensing terms should be the higher level that dictates what can and can’t be done.

As we await the more granular licensing guidance from Microsoft, it’s best to proceed with caution and not rush into bending the rules into how you’d like them to be. Community discussions around the topic are a great source of perspective on how the communication from MS should probably be interpreted:

The Dynamics 365 folks certainly aren’t the only ones who are exploring the implications of the new PowerApps platform licensing. The PowerApps community that has been working on the Canvas App experience is similarly faced with a new situation in the Model-driven Apps space, and they are also giving some fair critique on the challenges with the current licensing model. If the intention of MS is now to push the XRM foundation into the hands of a far larger audience than it has had ever before, the app scenarios that customers and partners will be thinking of solving with it will also be broader than the CRM/ERP world for which the Dynamics 365 licensing model has been geared towards. Hopefully it won’t result in more layers of complexity on top of the existing licenses but rather something that could easily be communicated to customers.

Communicating With The Outside World

One thing that should be kept in mind here is that PowerApps remains purely an internal facing UI. Each user will need to have a license assigned to them within your Office 365 tenant, so exposing data to external parties via these apps is not an option that Microsoft appears to be pursuing for the time being. The only client UI that supports the scenario where your customers or partners would be directly viewing, editing and entering information into your CDS database is Dynamics 365 Portals. That is essentially the public facing UI of your Common Data Service for Apps – but you’ll need to acquire that license via either purchasing a Dynamics 365 App/Plan license or the Portal add-on.

External Users is a concept that has existed in Dynamics CRM for quite a while, since it’s not a recent phenomenon by any means that organizations are looking to connect their CRM systems with the outside world. Back in the on-prem days there was a hefty price tag you had to pay for a separate External Connector license, but these days it comes bundled in with the subscription. As the Dynamics 365 licensing guide states, “Customer Engagement Applications graphical user interfaces may not be accessed by external users”, which in practice means any App UI except the Portal.

Alongside the UI, there’s of course the API that the platform offers. Building your own custom client application that replaces the Customer Engagement Apps is not going to be a small project, and now with the introduction of Canvas Apps you’d probably be even less likely to end up going down that road with customer specific deployments (ISV products are of course a different thing). What’s a bit interesting with the new “platform SKU” is that none of the PowerApps plans actually grant you the right to “Dynamics 365 App APIs”, based on the pricing page.

This is another area where hopefully more clarity on the intended positioning of each license type from the PowerApps and Dynamics 365 products will be provided by Microsoft as they work towards unifying the app stories that all lead to the use of Common Data Service for Apps. It certainly is an ambitious goal that they are pursuing, especially when keeping in mind the upcoming Common Data Service for Analytics that should launch in preview format by Q3/2018.