Licensing Power Platform for External Users
Microsoft’s Power Pages (formerly Power Apps Portals) provides a way to expose Power Platform apps and Dataverse data to external users, but it comes with a unique licensing model.
CIOs and CTOs must carefully plan for Power Pages external user licensing, as it is capacity-based and offers distinct options for authenticated and anonymous users. The costs can vary significantly depending on user volume and whether you choose subscription capacity packs or pay-as-you-go billing.
Proper licensing ensures predictable costs and compliance when extending internal applications to customers or partners.
Read about Microsoft Power Platform Licensing.
Power Pages for External Users
Power Pages is the Power Platform capability for building external-facing websites or portals that interact with your business data.
Unlike standard Power Apps (which are typically licensed per internal user), Power Pages is designed for external access scenarios, such as customer self-service portals, partner collaboration sites, or community forums. External users (customers, partners, or any non-employee) don’t require a traditional per-user license.
Instead, Microsoft uses a capacity model where you license external user access in bulk. This model is crucial for CIOs and CTOs to understand because it shifts licensing from individual named licenses to pooled capacity, enabling potentially thousands of external users to access your system cost-effectively.
Key concept – Internal vs. External:
Internal users (employees) can often be covered by existing Power Apps or Dynamics 365 licenses for portal access (e.g., a Dynamics 365 or Power Apps Per User license grants rights to Power Pages).
External users, however, typically won’t have such licenses and must be licensed via the Power Pages external user model.
In practical terms, this means if you publish a Power Pages site for customers, you’ll license their usage through the models described below, rather than buying a Power Apps license for each customer. This approach is more scalable and cost-effective for large user bases.
Read Power Automate Licensing Strategy for CIOs.
Authenticated vs. Anonymous External Users
Power Pages licensing distinguishes between authenticated users and anonymous users, with separate capacity quotas for each.
- Authenticated external users are those who log in to your portal via an identity provider (Azure AD, Microsoft Entra ID guest, Facebook, LinkedIn, etc.). They have authenticated identities (mapped to a Dataverse contact record) and often need to view or manipulate data specific to them. Licensing for authenticated users counts the number of unique users per month who log in. Importantly, if one user logs in multiple times in a month, they still count as only one against the quota. (This is a change from the legacy “per login” model of Power Apps Portals, which counted logins per day; the new model counts unique users, making costs more predictable.)
- Anonymous users are visitors who access your Power Pages site without logging in. They might be browsing public content or knowledge articles. Licensing for anonymous access similarly tracks unique anonymous visitors per month, using browser cookies. If the same person visits multiple times (and doesn’t clear cookies or switch devices), they are counted only once for that month. Users who eventually log in during a session are treated as authenticated that month, not double-counted.
Organizations can license either type of external user, depending on whether their portal has public pages or requires a login.
For instance, a customer support portal might allow browsing FAQs anonymously (counting toward anonymous users) but require a login for submitting tickets (counting toward authenticated users). Microsoft provides separate capacity entitlements for each category to give flexibility.
Read Optimizing Microsoft Power Platform Costs for Enterprises.
Subscription vs. Pay-as-You-Go Licensing Models
There are two licensing models to acquire external user capacity in Power Pages, allowing either upfront commitment or flexible consumption:
- Subscription (pre-paid capacity packs): This model allows you to pre-purchase a set amount of external user capacity at a fixed monthly fee. You buy “capacity packs” that grant a certain number of users per month. For authenticated users, the base pack includes 100 users per site per month; for anonymous users, it includes 500 users per month. You can purchase multiple packs to increase capacity. The key advantage is a lower per-user cost if you have a predictable or high-volume external audience. Microsoft offers volume-tiered pricing – the rate per user decreases at higher thresholds (more on the pricing tiers below). Subscription packs are typically added to your enterprise agreement or licensing subscription and billed annually or monthly. This approach provides predictable costs and is ideal if you know your approximate external user count. Note: If you choose subscription licensing, you must provision enough capacity to cover your peak monthly active users (since you pay for the capacity regardless of actual usage).
- Pay-as-you-go (consumption-based): This model utilizes Azure subscription meters to bill you for your actual usage of Power Pages every month. There is no upfront capacity purchase; instead, Microsoft charges a fixed rate for each unique external user that month. This provides maximum flexibility – if you have fewer external users one month, you pay less. Pay-as-you-go is enabled by linking your Power Platform environment to an Azure subscription for billing. The trade-off is a higher unit cost per user compared to the subscription packs. It’s well-suited for scenarios where external user volumes are uncertain or just starting out (e.g., pilot projects or unpredictable consumer usage patterns). You can start with pay-as-you-go and later decide to switch to capacity packs once your usage reaches a steady level. However, note that you cannot mix subscription and pay-as-you-go services in the same environment or portal – you must choose one approach per environment.
Pricing and Volume Discounts for External User Licensing
The cost structure for Power Pages external users depends on both the user type (authenticated vs. anonymous) and the licensing model (subscription vs. pay-go).
Below is a breakdown of the retail prices as of 2023 for these options:
- Subscription Capacity Packs (per month) – Base packs: $200 for 100 authenticated users/site/month, and $75 for 500 anonymous users/site/month. These base pack prices (often called Tier 1 pricing) apply to smaller deployments. As your needs scale, Microsoft offers volume discounts at higher tiers: for authenticated users, committing to 10,000+ users/month brings the price down to $75 per 100 users (Tier 2), and at 100,000+ users, $50 per 100 users (Tier 3). Likewise, for anonymous users, 10,000+ users/month (20 packs of 500) costs $37.50 per 500 users, and 100,000+ (200 packs) costs $25 per 500 users. These tiered rates can dramatically reduce the per-user cost (e.g., from $2.00 per auth user at Tier 1 down to $0.50 at Tier 3). Subscription pricing is typically locked in via a yearly contract, so enterprises should forecast their peak usage to choose the right tier.
- Pay-as-You-Go Rates – If opting for consumption billing, the current rates are $4.00 per active authenticated user per month and $0.30 per active anonymous user per month. These costs are billed through your Azure subscription based on the actual monthly active user counts. There is no volume discount on pay-go rates – they are flat, which means pay-go is most cost-effective at low volumes or for sporadic usage. For example, 10 authenticated external users in a month would cost $40 on pay-go (10 × $4), whereas the minimum subscription pack would be $200 regardless of only 10 users. On the other hand, 1,000 authenticated users would cost $4,000 on a pay-go basis versus $2,000 on a subscription (if 10 packs of 100 are purchased). The breakeven point for authenticated users is around 50 users per month – beyond that, a $200 subscription pack becomes cheaper than paying $4 each for every user. For anonymous users, the breakeven is around 250 users vs. the $75 pack (since 250 × $0.30 = $75). These thresholds indicate when an organization should begin considering a switch from pay-as-you-go to subscription packs.
Monthly cost comparison for authenticated external users under subscription vs. pay-as-you-go models. The subscription cost (orange line) is a step function with $200 per 100-user pack increments, while pay-as-you-go (gray line) scales linearly at $4 per user. The break-even occurs at ~50 users/month (where both approaches cost about $200). Enterprises with a stable, large user base save significantly with pre-paid capacity, whereas pay-go benefits small or unpredictable user counts.
In addition to user capacity, each capacity pack includes Dataverse storage entitlements. Every 100-user authenticated pack adds ~2 GB of Dataverse database storage and 16 GB of file storage to your tenant. (Anonymous user packs include smaller storage allotments, e.g., 0.5 GB database per 500-user pack.)
This is a valuable benefit – if you anticipate needing extra data storage for your portal, the included capacity can offset costs that you’d otherwise pay à la carte ($40/GB for Dataverse storage).
CIOs should factor this in: investing in a larger capacity pack not only licenses more users but also provides more storage to support content (documents, data) on the portal.
Cost Management and Licensing Optimization
To optimize costs and ensure compliance, organizations should approach Power Pages licensing strategically:
- Start Small if Uncertain: If you’re launching a new external-facing portal and lack clear user count predictions, consider starting with pay-as-you-go. This avoids over-committing to capacity. Closely monitor actual usage for a few months using the Power Platform Admin Center, which can report the number of monthly active users. Once a pattern emerges, you can evaluate if switching to a subscription makes financial sense. Microsoft allows transitioning to capacity licenses (typically at the start of a billing cycle) if you decide to lock in a better rate.
- Commit to Save (Volume Planning): If your external user base is well-established or growing consistently, consider leveraging the tiered subscription model. Committing to a higher tier can drastically reduce per-user cost. For example, an enterprise expecting ~20,000 external logins per month might opt for Tier 2 (10,000+ users) capacity for cost efficiency. Work with your Microsoft account representative to include the appropriate number of capacity packs in your agreement. Often, large customers can negotiate enterprise discounts on top of the listed tier prices, especially when bundled with other Microsoft licenses.
- Peak vs Average Usage: Keep in mind you must license for your peak monthly active users, not just the average. Microsoft recommends purchasing capacity for the maximum anticipated monthly utilization over 12 months. If your portal usage is seasonal (e.g., spikes during enrollment periods or the holiday season), you’ll need sufficient capacity to cover that peak. With subscription packs, you’re essentially pre-paying that peak capacity even in off months. Suppose the peak is much higher than the average. In that case, some organizations consider using pay-as-you-go pricing during off-peak periods and activating subscriptions before peak periods, but switching models frequently may not be a practical solution. It’s generally simpler to choose one model per environment and size it for peaks, or use separate portal environments if you want to mix models (advanced scenario).
- Multiple Sites and Environments: Each Power Pages website (portal) is licensed separately for each environment. If you have multiple portals, you can split purchased capacity across them, as long as each site gets a minimum allocation (Microsoft requires at least 25 authenticated users allocated per site if using a shared capacity pack, and 200 for anonymous users)uds.systemsuds.systems. This flexibility means, for example, if you bought a 100-user pack, you could assign 75 to one site and 25 to another to maximize usage. However, you cannot mix subscription and pay-go in the same environment. Large enterprises often have separate environments (Dev, Test, Prod). Only the production environment typically requires full capacity licensing; non-production environments can often be covered under developer licenses or with minimal users for testing.
- Internal User Considerations: If some of your internal employees or contractors will log in to the Power Pages site (for instance, as site administrators or support agents viewing the portal from an external perspective), you might not need to count them in external capacity. Users with existing Power Apps or Dynamics 365 licenses are entitled to use Power Pages websites without consuming the external user quota. The system recognizes their license as long as they authenticate with your Azure AD (Entra ID) in the same tenant. This is a cost-saving factor – ensure employees are assigned appropriate licenses (like a Power Apps per-user license) so that the paid capacity is only used for truly external (unlicensed) users. Essentially, don’t pay twice for your staff.
- Monitoring and True-Ups: Treat external user licensing like a capacity pool that needs periodic review. Designate someone (perhaps in the IT PMO or licensing team) to monitor the actual external user numbers monthly. If you’re consistently under-utilizing a subscription (e.g., only 200 users but you licensed 500), you might adjust at renewal or consider pay-go. If you’re consistently hitting or exceeding your limits, plan a true-up before it becomes a compliance issue. Microsoft’s licensing agreements typically require that you stay within licensed limits. While there’s no “hard stop” that automatically blocks a 101st user if you only licensed 100, you are expected to proactively acquire more capacity as needed. Azure pay-go meters, however, will simply bill for overages automatically (which is an argument for enabling pay-go in high-uncertainty scenarios to avoid any surprise compliance gaps).
Real-World Scenario Example
Consider an enterprise launching a customer portal: Contoso Insurance plans to allow customers to log in to view policies and file claims.
They estimate that about 2,000 customers will use the portal monthly in the first year, with growth to 15,000 in a few years as more products are rolled out.
- Year 1: With ~2,000 authenticated users/month, Contoso could purchase 20 packs of the Tier 1 authenticated-user licenses. That would cost $ 4,000 per month (covering up to 2,000 users). If they chose pay-as-you-go instead, 2,000 users would cost $8,000 (2,000 × $4) for that month – double the cost. Committing to capacity early is beneficial in this case. Contoso decides to go with the subscription model. They also enable some public pages with anonymous knowledge articles, expecting around 5,000 monthly anonymous visitors. They purchase 10 packs of anonymous users (10 × $75 = $750 per month for up to 5,000 users). In total, the Year 1 monthly cost is ~$4,750 for the portal licensing. Because this is under 10,000 users, they are paying Tier 1 rates.
- Year 3: The user base grows to ~15,000 authenticated users per month. Contoso negotiates an enterprise agreement adjustment to move to Tier 2 pricing. At 15,000 users, they need 150 capacity packs. Tier 2 pricing is $75 per 100-user packlearn.microsoft.com, so the cost would be 150 × $75 = $11,250/month, instead of $30,000 at the Tier 1 rate (a significant savings). The anonymous users also grew to ~20,000/month, so Contoso moves to Tier 2 for anonymous as well (20 packs of 500, at $37.50 each = $750/month, whereas Tier 1 would have been $3,000). This example illustrates how planning for volume and selecting the appropriate tier can yield significant cost benefits. It also highlights that as your external audience grows, you should revisit your licensing bands and renegotiate if necessary to tap into the better pricing tiers.
Recommendations
- Align Licensing to User Volume: Estimate your external user counts (both authenticated and anonymous) and choose the licensing model accordingly. Use pay-as-you-go for low or unpredictable volumes, and switch to subscription packs as soon as it becomes cost-effective (around 50 auth users or 250 anonymous users per month).
- Leverage Volume Tiers: If you foresee large-scale (tens of thousands of external users), plan for the tiered pricing brackets. Negotiate an appropriate tier with Microsoft in advance to benefit from lower per-user costs. Committing to a higher tier in an enterprise agreement can substantially reduce costs in the long run.
- Use Existing Internal Licenses: Prevent double payment for internal personnel accessing the portal. Ensure that employees and partners with internal licenses (Power Apps or Dynamics 365) log in via your Azure AD, so they don’t count against external user capacity. Audit your user logins and separate internal vs. external where possible.
- Monitor and Adjust Regularly: Set up monthly monitoring of external user usage in the Power Platform Admin Center. Compare usage against your licensed capacity. If you consistently use far less than your subscription allows, consider reducing your capacity (at renewal) or opting for pay-as-you-go. If you approach limits, procure additional capacity before users are blocked or costs spike. Treat capacity licenses as a dynamic resource that needs right-sizing over time.
- Consider Multiple Environments: For organizations with multiple portals or environments, optimize license allocation by using one production environment per capacity purchase to simplify tracking. If running several smaller external sites, allocate one capacity pack across them if possible (adhering to minimum user requirements per site) to avoid buying separate packs for each microsite.
- Budget for Peak Demand: Base your capacity planning on the peak monthly active users you expect in a year. Build a safety margin for unexpected spikes (e.g., new product launch or emergency communications that drive extra traffic). It’s better to budget a little higher in capacity packs than to incur costly pay-go overages unexpectedly. Remember that unused capacity does not carry over – it’s “use it or lose it” each month, so match it as closely as possible to peak requirements.
- Educate Stakeholders: Ensure your finance and product teams understand how external user licensing works. When proposing a new customer-facing portal, include licensing costs in ROI calculations. Educating business stakeholders about the $4 per user vs $2 (or lower) per user cost difference helps justify upfront license commitments. It also prevents unpleasant surprises when large user volumes hit the budget.
- Evaluate Alternatives if Appropriate: In some cases, if external users are very limited or are partners or contractors, you may consider providing them with internal licenses (via Azure AD B2B guest accounts with a Power Apps per-app license, for example) instead of using the portal model. This is only viable for small numbers of externals who need fuller access. For broad customer-facing scenarios, Power Pages capacity licensing is the recommended and scalable approach.
- Stay Updated on Licensing Policies: Microsoft’s licensing terms are constantly evolving. Keep an eye on the official Power Platform Licensing Guide and announcements for any changes to Power Pages pricing or included entitlements. For instance, new features (such as advanced content delivery, increased storage, or integration capabilities) may be bundled in the future. Staying informed ensures you take advantage of any new offers or adjust your strategy if pricing models change.
- Engage Microsoft or a Licensing Partner: Don’t hesitate to engage Microsoft or a certified licensing partner for a detailed review. They can help analyze your external user patterns, recommend the optimal licensing mix, and potentially offer special pricing (such as education, non-profit discounts, or promotional offers) if your scenario qualifies. Enterprise Agreement customers, especially, should leverage their Microsoft account team to optimize licensing costs for external users as part of overall negotiations.
FAQ
Q1: What exactly counts as an “authenticated” external user in Power Pages licensing?
A1: An authenticated external user is any user who logs into your Power Pages site through a login page using an authentication method (like Azure AD, Google, LinkedIn, etc.). Each unique authenticated user that accesses the site within a month counts as one against your licensed capacity. If the same person logs in multiple times or remains logged in throughout the month, they are still counted only once for that month. Only users without an existing Power Apps/Dynamics license need to be counted (internal licensed users are excluded from the count if properly recognized).
Q2: Do I need to license anonymous users if my portal has a login page but also some public content?
A2: Yes, if you allow any content to be accessed without a login, you should license anonymous users. However, the login page itself does not count as anonymous access. Microsoft does not charge for hits to the sign-in or sign-up pages, or system pages needed for authentication. However, any other page that can be accessed without logging in (e.g., a product FAQ or knowledge base article) would also be considered a unique visitor. If your portal is fully locked down except for the login screen, you don’t need an anonymous user license.
Q3: Can I switch from pay-as-you-go to a subscription (or vice versa) easily if I change my mind?
A3: You can switch, but not on-the-fly within the same environment. To transition from pay-as-you-go to subscription, you would purchase the capacity packs and assign them to the environment, and then remove the Azure billing link. Typically, changes are made at the start of a billing period. Moving from subscription to pay-go might require turning off your capacity add-on and linking an Azure subscription. It’s a planned change, often done in coordination with Microsoft support. You cannot run both models simultaneously in one environment, so plan the timing of any switch carefully (e.g., at month-end).
Q4: What happens if my external user count exceeds my purchased subscription capacity?
A4: Microsoft expects you to license appropriately for peak usage. There isn’t an automatic shutdown at your limit, but exceeding licensed capacity violates the terms. In practice, if you hit your user cap, you should purchase additional capacity packs as soon as possible. The Power Platform admin center can help identify if you exceeded capacity. For peace of mind, some customers deliberately over-provision a bit. If you’re concerned about unexpected spikes, the pay-go model will simply bill the overage at $4 per user, provided you’ve set your environment to pay-go. With a subscription model, it’s up to you to monitor and adjust capacity – Microsoft may flag overuse during a true-up or audit.
Q5: Are external users under Power Pages licensing named licenses? Do I assign licenses to each user?
A5: No, you do not assign licenses to individual external users. The licensing is for pooled capacity at the environmental level. You purchase a capacity that covers X number of users per month for a given portal. Any external user who comes in is automatically counted against that pool, but there’s no concept of allocating a specific license to a specific external user. This makes it easy to handle user churn – new users can replace old ones, and as long as the total unique users in the month stays within your licensed number, you are covered.
Q6: If an external user is also an internal user (e.g., a partner with an AD account in our tenant), do they count against the external license?
A6: If that partner has a qualifying license in your tenant (for example, a Power Apps per-user license via Azure AD B2B or a Dynamics license), and they log in with that identity, then they do not count against the external capacity. Essentially, they’re treated as an internal licensed user. But if the partner uses a generic external login (say, they create a local account on the portal or use a social login), then they would count as an external user. To maximize efficiency, consider inviting frequent partners as guest users in your Azure AD and assigning them a license, rather than consuming your external user quota.
Q7: How are bots or crawlers counted in anonymous user measures?
A7: Automated traffic, like search engine crawlers or monitoring bots, is generally excluded from the anonymous user counts. Microsoft’s system tries to ignore non-human visitors (for example, it doesn’t count hits to system URLs or known bot user agents). This helps ensure that your anonymous user license is used by real end-users, rather than being inflated by web crawler traffic. That said, if a monitoring tool is not properly identified (e.g., if it simulates a browser), it could be counted, so configure monitoring to target non-counted pages when possible (Microsoft even suggests hitting a specific _services/about page for health checks, which is not counted).
Q8: Is Power Pages licensing included in any bundles like Office 365 or Dynamics 365 plans?
A8: For external users, no – you must license them separately via the capacity model. Internal users with certain licenses (Dynamics 365, Power Apps per user) have usage rights to Power Pages, as mentioned, but these are for the internal user use case. Power Pages’ capacity for external users isn’t included in Office 365 or the standard Microsoft 365 plans. It is an add-on purchase. Even if you have Power Platform or Dynamics already, when you open up a portal to customers or the public, you’ll need to acquire the Power Pages external user licenses.
Q9: We are a non-profit/education organization – do different rules or prices apply for Power Pages?
A9: Microsoft offers discounted pricing for non-profits, educational institutions, and select other sectors for Power Pages capacity. The licensing model (authenticated vs anonymous, pack sizes) remains the same, but the dollar rates per pack or user may be lower under nonprofit pricing lists. You would need to work with Microsoft or a licensing partner to get the specific discounted rates. Always ask if your organization qualifies for special pricing – it can significantly lower the barrier for external audience solutions if you’re in these sectors.
Q10: Where can I find the official details and keep up with changes in Power Platform licensing?
A10: Microsoft publishes a Power Platform Licensing Guide (PDF) that is updated periodically (often quarterly) and a licensing FAQ on Microsoft Learnlearn.microsoft.com. These documents include specifics on Power Pages licensing, use rights, and examples. Additionally, the Microsoft Power Apps pricing page and your Microsoft account representative are reliable sources for the latest pricing information. It’s wise to review these resources at least annually, as Microsoft occasionally adjusts capacities, introduces new offerings (for example, the shift from login-based to user-based licensing was a major change in 2022/2023), or introduces new product bundles that could impact your strategy.
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