Wrapping my head around the licensing for Dynamics / PowerApps

By | March 5, 2019


There have been a number of really good posts on the licensing so far, but, I think, the main problem for me used to be that I just could not consume all that information till I left the familiar space of the On-Premise implementations and started working in the online environment.

So, in this post, I’m just going to emphasize a few things about licensing that seemed important to me.

1. What is the difference between a CDS instance and a Customer Engagement instance?

Really they are both CDS, but there are different actions you can take on them:


Also, Customer Engagement instances will have those extra solutions which, I believe, you can’t just get added to the regular CDS instances.

I would say that any CE instance is still a CDS instance, but the opposite is not true.

2. What is the difference between a model-driven app and Dynamics CE?

“Dynamics” is nothing but a set of so-called first-party model-driven applications now. Basically, those are model-driven applications built by Microsoft on top of the Power Platform.

In this context, the concept of restricted entities starts making sense – there are certain entities introduced through those first-party applications which Microsoft wants to license through Dynamics plans rather than through Power Apps plans:


It’s as if you created a model-driven app, allowed others to install it, but still wanted to collect licensing fees from somebody willing to use that app in their environments. You’d create a license plan etc.

3. How do you decide which license your users need?

Price. is the obvious factor here. And a PowerApps P2 license would cost you about one third of the Customer Engagement licence.

However, depending on the license assigned to them your users will have different rights.

The diagram below is copied directly from the Dynamics 365 licensing guide:


And there is, also, Power Apps pricing which suggests that, as soon as you have a PowerApps user and you want that user to access a model-driven app (or as soon as you want that user to access any entities relying on the plugins and/or real-time workflows), you need Power Apps P2 plan:



Keep in mind that Power Apps licensing is possible in either type of CDS (“regular” or “customer engagement”). Full Dynamics licensing is only possible in the “customer engagement” CDS where you have those Dynamics applications.

Here is the list of so-called “complex” entities (out of the box entities which require a P2 plan):


Word of caution: apparently, your license requirements may change as you keep developing different solutions. A P1 user working with the Canvas Apps only might suddenly require a P2 license if a plugin gets added by a developer.

4. Can you create custom entities that replicate restricted entities?

Again, looking at he licensing guide:


So yes, now you can.

BUT it does not apply to the Team Member licenses. Although, it’s not so much about replicating the entities – it’s more about the fact that Team Member licenses are given in the context of the main application scenario (Sales, Customer Service, etc), and you are not allowed to use custom entities which are changing the core purpose of the specified Team Members scenario:


Apparently, if you create a custom Case entity, you will be changing the core purpose.

5. So, just to confirm, how would a pure CDS model-driven app look like?

Actually, if you are a seasoned Dynamics user, that model-driven app would look very familiar:


As a system customizer, you will also have access to the solutions, solution designer, etc. Basically, you’ll feel pretty much at home:


6. And what are the gotchas?

Some of the features which are outside of the “restricted entities” don’t seem to be available in the regular CDS instances yet. For example, that applies to the SharePoint integration and to the Outlook App.

However.. based on the diagram above it seems to be possible to add a P2-licenses user to a CE instance, and such a user will get access to those features.

PS. If you are in the mood for more reading, have a look at these two posts:

Demystifying Dynamics 365 & Power Platform Licensing by Jukka Niiranen

Comparison of Dynamics 365 and Model-Driven PowerApp features by Hamish Sheild

2 thoughts on “Wrapping my head around the licensing for Dynamics / PowerApps

  1. Shidin Haridas

    Regarding the gotchas, just to elaborate, the ‘regular’ CDS will not have the SharePoint / Outlook integration capabilities, which are sort of the deal-breaker when it comes to customers choosing Dynamics 365. I see the ‘regular’ CDS as a pure platform where we want to build things from scratch and not replicate the products / modules which Microsoft already has (like Sales, Service, Marketing etc.)

    Unsure if the P2 license can be added to a CE instance, but either way its only a matter of time before Microsoft brings that barrier in place (and it makes sense too).

    So, thumb rule, if you want to leverage all the awesomeness that Microsoft has already built for you, go for CE (or any specific CE applications). If you want to build awesomeness which does not directly compete with the CE applications, then go for PowerApps!

    1. Alex Shlega Post author

      Hi Shidin,

      you basically nailed the reason I wrote this post (P2 license in the CE environment), but my conclusions are different. If you look at the Dynamics licensing guide in a kind of unbiased way, which is hard to do as it keeps changing:), you’ll see that PowerApps licensing is mentioned there (not highlighted or emphasized, but mentioned) – it’s done most clearly on the diagram I copied to this post. But it also makes sense if you start treating that licensing guide as a guide for the licensing of a few first-party applications, not a as a PowerApps licensing guide. P2 comes in simply because CE instances are still CDS instances, so you can use P2 in those instances as well, you just can’t use it to access restricted Dynamics entities. None of the sharepoint integration entities are on the restricted list. So, as per the current Dynamics licensing guide, P2 can use all those extra features (Outlook, Sharepoint, etc). Also, as far as I know, PowerApps product team is working on bringing at least Outlook integration to the regular CDS instances (I’m guessing it’s still going to be P2), but it would be up to somebody from Microsoft to confirm.


Leave a Reply

Your email address will not be published. Required fields are marked *