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The Ultimate Power BI and Fabric Licensing Guide

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Updated on 3/5/24 to include some important Fabric licensing information

Congrats! Your organization has made the decision to pick Power BI as your business intelligence platform of choice. Now it’s time for the rubber to hit the road—figuring out how to roll out the tool for report authors and consumers alike.

Should you choose to also supplement Power BI with Microsoft Fabric, the licensing choices may be dizzying and downright confusing.

This blog post isn’t meant to be an exhaustive guide on Fabric, but rather an exploration of the synergy between Power BI and Fabric, especially in scenarios where Power BI takes the lead.

Consider Fabric as a broader strategic choice in shaping your comprehensive data architecture. We plan to delve deeper into what Fabric is, its licencing structure, and its wider implications in a dedicated post. For now, we’re focusing on the essentials of Power BI licensing and Fabric’s role in enhancing Power BI-centric implementations.

One of Fabric’s most appealing features is its compatibility and seamless integration with other data platforms. This interoperability means that Fabric, along with other systems, can effortlessly feed into Power BI, enabling a smooth and efficient data flow.

It’s important to note that the licensing model for Fabric is currently under optimization at the highest echelons of Microsoft. This situation leads to some ambiguity, particularly regarding how Fabric and Power BI come together. Without a clear understanding of their interplay, determining the most effective licensing options can be challenging.

If you’re navigating these complexities and seeking more clarity on the best licensing strategies for Fabric, we’re here to help. We invite you to reach out for an in-depth discussion with our experts. Together, we can guide you through these decisions, ensuring you make the most informed choices for your organization’s data architecture needs.

Stay tuned for more insights on how Fabric can be a game-changer in your data strategy in a future post.

Let’s start by learning Power BI’s licensing first as it will provide you the foundation for understanding how to purchase Fabric. 

Getting the right Power BI licensing in place. 

To have the best possible foundation for collaboration, you need the right tools. Microsoft loves to make licensing flexible but ends up with too many options. This Ultimate Power BI and Fabric Licensing Guide will help you understand different licensing considerations so you can make an informed decision, get the most bang for your buck, and plan your organization’s Power BI rollout. 

Power BI General Guidelines

Before going too deep into licensing, you need to have a high-level understanding of how report distribution works in Power BI. 

Here is a graphic to help illustrate the role of using Power BI to: 

  • Build a report (.PBIX file) with Power BI Desktop. 
  • Publish the report to within a container called a Workspace, which we can think of as your development environment (analogous to an Editors Desk). 
  • And finally, publish the contents of your Workspace to an App for others to consume (Magazine on Newsstands). I will use the terms Workspace and App in this piece very specifically. 
Skypoint - How to Share in Power BI
Skypoint – How to Share in Power BI

Is Power BI Free?

Power BI Desktop is a FREE download and the full-featured authoring tool for Power BI reports. Connect to data sources, build models, and visualize your data without paying a penny. When you save your work, it will be saved as a .PBIX file that you can treat as “source code.” 

Nothing is stopping you from emailing or sharing your .PBIX file. But we do NOT recommend using this as your distribution method because there are serious security and versioning concerns. With a .PBIX file you can peer into data source paths, have access to imported data, and so forth. 

The Power BI Service (the term for also has free capabilities for those  with a work, school, or government email. Consumer email does not allow free access. 

With a free account, you are provided a “My Workspace” on where you can publish reports and set up automated data refresh for your own viewing pleasure. The catch is you cannot create an App from My Workspace, but you can share individual reports to others to view if they have a Pro license. 

Can You See All Reports With a Free Power BI Account?

Want to share your report with someone else? GOTCHA! That is where Power BI licensing comes into play. The only way you can see other people’s reports with a free Power BI account is with a Premium Workspace or App. Want to share your report publicly for free? No problem! 

After you publish to your My Workspace you can Publish to Web for everyone to see. DO NOT take Publish to Web lightly, these reports are truly available to the general public. Your admin has the ability to  turn Publish to Web off  as a safety measure. 

It is very easy for website crawlers to find your public report no matter what you do. However, if it is truly for public consumption, the Publish to Web also provides an embed code if you want to integrate a Power BI report on to your website, blog post, or portal…totally for free. 

Publishing and Consuming Reports on the Power BI Service (

There are countless reasons to go cloud-first for your BI deployment. On-premises data sources? No problem. With Microsoft’s Power BI Gateway technology  you can push data up to the cloud without punching holes in your security firewall or sacrificing performance. 

When you purchase Power BI licensing, you are effectively purchasing the cloud-hosted Power BI Service to be able to: 

  • Create Workspace/Apps as containers for development/consumption (respectively). 
  • Unlock robust capabilities like Dashboards, Data Alerts, Data Security, Commenting, and much more. 
  • Edit reports online—and soon—edit data models as well. 

Microsoft pushes out monthly updates to both the Power BI Desktop tool and Power BI Service. If you want the most up-to-date capabilities of Power BI, choosing to leverage the Power BI Service is imperative. 

Consuming Reports on Your Internal Apps, External Portal, or SaaS Product

Here is where consumption-based flexibility comes in. There are different licensing paths you can take depending on your use case, audience, and volume of users. 

Microsoft’s documentation does a great job of giving a  high-level comparison of the different consumption-based options. In the next section, I will break down the considerations on why to go one route or another. 

Publishing and Consuming Reports On-Prem With Power BI Report Server

Is your organization cloud-averse? Much to my chagrin, Power BI Report Server may be right for you. There are only two ways to purchase Power BI Report Server: 

  1. Purchase (or have already purchased) SQL Server Enterprise edition. 
  1. Purchase Power BI Premium—here is how to  get the keys for installation. 

Wait… To get Power BI Report Server, I need to buy a huge chunk of cloud capacity for Power BI Premium—just to get the on-premises version? 

Yes. Microsoft is helping you make the move to the cloud on “your terms” just to dangle the cloud carrot (ha!). 

My main gripes about Power BI Report Server is that it feels like “half a loaf” compared to the Power BI Service AND it has its own version of Power BI Desktop (yikes!). 

Power BI Desktop “optimized” for Report Server  is several versions behind its cloud counterpart. Every IT Department’s worst nightmare is having to support an organization that has both types of Power BI Desktop and must maintain a common version throughout the org. 

Also, don’t get the false sense of security that sticking on-premises is safer. I doubt your security budget can keep up with Microsoft’s continual investment in cloud security. The Power BI Service also provides many data governance options that are enticing  like data sensitivity labels.

I deliberately will not be going into considerations for Power BI Report Server in the following sections because this is not a true licensing path. You are either cloud averse, you purchased SQL Server Enterprise edition already, or you’re on a shoe-string budget—which are all valid reasons! 

If your organization relies heavily on SQL Server Reporting Services (SSRS), then this is a great option to explore as you move your organization forward from traditional flat reporting to dynamic self-service reporting. 

Check out our free Dashboard in a Day Workshops 

What Are the Assigned Power BI Licensing Options?

These licenses must be assigned to a named M365 user. You can self-serve and  buy these licenses through your M365 Admin Portaland assign them appropriately if you have  the right administrator role. 

Power BI Free License

Power BI Free is essentially its own type of license. When users log in to for the first time, they assign themselves a free license and/or start a free Pro trial without even knowing it.

You can turn off the ability for users to self-serve a free license, thus turning off their ability to access unless they are assigned a free license.


power bi free

What is the point of a free license?

If you have Power BI Premium, that means free users can consume content. That also means they need access to, unless it is A-SKU Power BI Embedded Premium…more on that below. 

Power BI Pro License

A Power BI Pro license is needed for both developers and report consumers to view reports in the Power BI Service in the absence of Power BI Premium. It costs a flat price of $10 per user per month for all the amazing features of the Power BI Service.

Data analysis with Power BI Free vs Power BI pro
Data analysis with Power BI Free vs Power BI pro

Power BI Pro has so much to offer for this price…it is unbelievable. Just look at this comparison chart and notice the only gaps between Pro and Premium are mostly for deployment options, administration, and data science. Notable Power BI Pro features: 

  • Shared and certified datasets 
  • Ad-hoc analysis and data exploration with Excel
  • Dataflows 
  • 1 GB semantic models (previously called datasets) / 8 report refreshes per day 
  • Incremental refresh: Automatically partition and manage dataset tables to optimize refresh schedule. 
  • Customized “app” experience for end-users 
  • In-context commenting and collaboration 
  • AI-powered data visuals out-of-the-box 
  • And much, much more… 

The Power BI Pro license is only included in the E5 enterprise licensing deal if you want a package rate across your Microsoft technologies. If you are E3 or E1, then keep reading. 

Going wall-to-wall E5 for all your users has its price benefits, but you will still miss out on Power BI Premium features focused on delivering Enterprise BI (more on this below). But deciding to go E5 means your organization is committed to self-service analytics. 

What if my organization is reluctant to purchase Power BI Pro?

Guess what…you can purchase it anyway with the “Buy Now” link without being a tenant admin and set up billing yourself. Go rogue or go home! 

Power BI Premium Per User (PPU) License

Power BI Premium Per User (PPU) was a big change to licensing options that went GA in early 2021. Like Power BI Pro, both developers and report consumers need a Power BI Premium Per User License to take advantage of Premium features without a Premium capacity (consumption-based) SKU. 

Power BI Premium Per User (PPU) Pricing

This licensing option provides access to Power BI premium features and much larger semantic model sizes on a per-user cost basis. Both developers and consumers will need a PPU license to access the premium features and larger models.

Typically, our customers are purchasing PPU licenses to handle large semantic models, increasing their refresh rate (from 8 to 48 / day), or for specific premium features like Scorecards or Deployment Pipelines. Before recommending a customer to make a jump from Pro to PPU strictly for model size, it’s worth reviewing why the semantic model is so large in the first place (typically because you have no data warehouse) and if it could be broken down to smaller models, dataflows, or implement a warehouse. Simply buying more model storage won’t solve poor performing reports.

It costs $20 per user per month if you get it as a standalone license.. If you already have Power BI Pro, you’d pay an extra $10 to access all the additional features.

Power BI Premium Per User is Workspace-specific. And no…you can’t mix and match with Pro or consumption-based tiers. To start using Power BI Premium Per User, all you have to do is create a Workspace then go to your Workspace settings and choose Premium Per User—easy as that!

Power BI Premium Per User License

If you are not seeing this option or it is greyed out, ask your Power BI Admin to enable Premium Per User.

Power BI Capacity-Based License Options

Capacity-based licensing options are a great way to skirt named license management for report consumers and this opens up a world of possibilities/features. A high-level comparison of capacity-based licensing documentation can be found here.

Power BI Capacity-Based Pricing

Ah…the vexing question of calculating your consumption-based compute needs. Whether you are purchasing a cloud data warehouse in Azure (or any other cloud provider) or Power BI Premium, it is extremely difficult to predict your needed expenditure without empirical information. The need for a proof-of-concept (POC) or starting small at first is critical to success.

Estimated prices for Power BI capacity-based licensing (if left on 24/7) are below*. Remember:

  • EM SKU must be purchased for the full year.
  • A SKU can be variable down to the minute, given the ability to turn off/on (plus added costs for a custom app).
  • Like EM SKU, P SKU requires a commitment to an annual license.
Capacity Nodes Total V Cores RAM (GB) Price per Month* Price per Year*
EM1/A1 1 2.5 $735.00 $8,820.00
EM2/A2 2 5 $1,470.00 $17,640.00
EM3/A3 4 10 $2,940.00 $35,280.00
P1/A4 8 25 $4,995.00 $59,940.00
P2/A5 16 50 $9,990.00 $119,880.00
P3/A6 32 100 $19,980.00 $239,760.00
P4 64 200 $39,960.00 $479,520.00
P5 128 400 $79,920.00 $959,040.00

Given the need for empirical information, typically the A-SKU is the best budget option to deploy your reports and test user load and compute metrics or start at P1. Your compute needs depend on a number of variables that are near impossible to calculate for, such as: 

  • Number of reports 
  • Complexity of reports 
  • DAX measures 
  • Power Query transformations 
  • Direct or Import mode 
  • Calculated columns 
  • Number of users accessing the reports 
  • The number of visuals on reports and interactivity between pages 
  • And much more… have I convinced you yet to do a POC? 

What does “app owns data” or “user owns data” mean with capacity-based licenses? 

An important concept to understand is that the core differentiator between capacity-based licenses is “app owns data” versus “user owns data”.

App Owns Data

Your custom application built to embed Power BI leverages a single service principal Power BI account to authenticate the use of the Power BI Embedded API. 

You must use row-level security (RLS) in a multi-tenant type paradigm where one Power BI Premium Workspace serves many clients. Otherwise, you need to have a single-tenant type paradigm where each client has their own Power BI Premium Workspace. The added flexibility to use RLS at the app level is another option—and how I remember what “app owns data” means. 

You can use a multitude of authentication methods for your user to access your custom app (Azure AD, third-party services, or your home-grown authentication database). 

User Owns Data 

Whether you are in the Power BI Service, M365 app, Teams, SharePoint, third-party service, or your own custom application, your embedded Power BI must use a Power BI login (with Azure AD) to authenticate access for your Power BI free users.

Power BI Pricing Guide - app owns data user owns data
Power BI Pricing Guide – app owns vs. data user owns data

Power BI Premium (P SKU)

If you have the budget and want to go all-in on self-service analytics and Enterprise BI features, then Power BI Premium is a no-brainer. Your P1 SKU includes a comprehensive range of features – and by this, I truly mean a complete package. With the P1 SKU, you gain access to all elements within Fabric. It’s understandable if this information comes as a surprise, but I assure you, it’s a beneficial offering designed to meet your needs.

A P1 SKU is analogous to everything that is provided in an F64 SKU, they ONLY differ based on contract terms. When you bought a Power BI Premium P1 SKU did you know you were getting a whole data platform with it? Now you do!

Remember: “A P1 SKU is analogous to everything that is provided in an F64 SKU, they ONLY differ based on contract terms.”

Check out this graphic on the SKU computing:

What is the difference? F SKU is purchased on a pay-as-you-go contract terms and P SKUs require yearly commitments which unlocks a price discount. Typically, I recommend using F SKUs before you make the plunge to a P SKU.

The typical path I see for organizations is Power BI Pro to F SKU or Power BI Premium Per User to P SKU.

I recommend organizations start incrementally with Pro licenses and Power BI Premium Per User rather than unleash all at once with Power BI Premium. But no one is stopping you from taking the dive!

What differentiates the decision to go wall-to-wall E5 Power BI Pro licenses versus Power BI Premium? Your organization may have both…and yes, there is a reason for this.

Enabling everyone in the organization to have Power BI Pro licenses is centered around the self-service analytics path from data analysts to business users. Power BI Premium enables so much more, including:

  • Data science workloads
  • Enhanced BI DevOps features
  • Enhanced data flows
  • Paginated reports (more details below)

Thus, Power BI Premium extends capabilities out to the data engineer and data scientist while also delivering more robust Enterprise BI capabilities for the rest of the user spectrum.

Power BI Embedding (EM SKU)

In-context analytics for your business applications allows you to embed reports where they make the most impact on workflow (like SharePoint or Teams). Save your users from having to keep a Power BI Service browser window open and navigating away from your line of business applications.

The EM SKU option is narrowly focused and has a yearly commitment, so your use case better be a good one. I rarely run into situations where an EM SKU is the right decision.

Power BI Embedded (A SKU)

Power BI Embedded (A SKU) is specifically offered for building external-facing custom applications. But, this SKU can also be used for internal-facing analytics, which opens up a wealth of options.

Essentially you are buying access to the Power BI Embedded API and choosing to have flexibility on how you authenticate users. If your org has app dev experience with .NET, then you will be happy to learn how lightweight developing an app to embed Power BI reports is.

A SKU is the most economical of Premium options because you have absolute control of your capacity expenditure—like starting and stopping on a whim. But you don’t get any of the luxuries of Power BI Service for report consumers.

When you purchase a P SKU, you also get access to the Power BI Embedded API…should you want to build a custom application off your capacity in an “app owns data” or “user owns data” paradigm.

What Does Power BI Premium Really Mean?

Power BI Premium is essentially a Power BI Workspace with “premium capabilities” like these:

More new features are coming out soon, including discoverable datasets, optimized reports for mobile devices, deployment into Teams App, new governance functionalities, automatic aggregations, embed Power BI in Jupyter Notebook, and more.

This workspace can either generate a Power BI Premium App (P SKU), embed to organization destinations with user owns data (EM SKU, M365 authenticated user), or embed anywhere with app owns data (A SKU, one service principal user with “choose your own authentication” method).

Premium Gen2, an architecturally redesigned generation of Power BI Premium, will offer Power BI Premium capabilities to all A SKU licenses and additional perks to P SKUs. This updated enterprise-grade capacity-based offering is more scalable. It also helps reduce management overhead and enhance performance.

The new platform integrates with features such as Azure Monitor to deliver a centralized view on Premium Capacity, simplifying the distribution of costs for capacity usage. This helps support better long-term budget planning while allowing you to respond to fast-changing analytics needs.

(Note: This update is currently in preview. It’s available to Premium subscribers right now and is expected to reach general availability in July 2021. All Premium SKUs will move to this model by the end of 2021.)

Power BI Premium is typically referring to the P SKUs when you read posts in the wild. Less common are the EM and A SKUs, although they have equal merit. Here is the link comparing Power BI Pro versus Premium features for reference.


How does Microsoft Fabric Licensing differ from Power BI?

Fabric is the end-to-end solution for all your data platform needs, from data analysts, to data engineering and data science with a single price called an F SKU. Everything is included when you purchase an F64 SKU below, but there are tons of caveats once you go less than F64. 

This flexible licensing model ensures you only pay for your actual usage, offering: 

  • Pay-As-You-Go Flexibility: You’re billed based on usage, either hourly or monthly, with no minimum usage requirement. This means you can opt for short-term usage without any long-term commitments. 
  • Cost-Saving Pause Feature: Temporarily halt Fabric Capacity when it’s not in use. This feature helps manage costs effectively, as you won’t incur charges during these pause periods. 
  • Active Usage Billing: Charges apply only when Fabric Capacity is active and in use, aligning costs directly with your operational needs. 
  • Affordability: Starting at a low price of $8 per day, it’s a cost-effective solution for various organizational needs. 

Handling Intensive Workloads

For times of increased demand, scaling up your capacity is straightforward. This flexibility ensures you can handle peak loads efficiently and scale back down as needed. With F-SKUs billed based on usage and managed like Azure resources, charges only accrue for the duration of use. However, note that auto-scaling isn’t available yet, so manual adjustments are necessary during high-demand periods. 

Discover how to scale Fabric capacity: Learn More 

Pause & Resume Function

Microsoft Fabric’s pause-and-resume feature allows for operational cost management. When your company doesn’t need data or analytics services, such as over weekends, you can pause the capacity, potentially saving about 25% on monthly licensing costs. 

Learn about managing Fabric capacity: Pause and Resume 

Automatic pause and resume guide: GitHub Resource 

OneLake Storage Overview

Integrated into Microsoft Fabric, OneLake offers centralized data storage. It follows a pay-as-you-go model, separate from capacity licensing fees. OneLake storage pricing aligns with Azure Data Lake Storage Gen2 rates. 

Benefits of Fabric storage include: 

  • Efficiency: Simplified purchasing with automatically provisioned storage. 
  • Cost-Effective: Unified data copies reduce duplication and transfer costs. 
  • Integration: Easy connection with third-party storage to Microsoft Fabric analytics. 
  • Accessibility: Open data formats allow easy access across multiple analytics engines. 
  • Security: Centralized data access with robust governance tools ensures heightened security. 

Bandwidth Considerations

Bandwidth involves data movement in and out of Azure data centers and between them. While crucial, its cost is generally minor compared to Capacity Units (CU) and Power BI license fees: 

  • Data Transfer In: Free for incoming data to Azure centers. 
  • Within Availability Zone: Free 
  • Between Availability Zones: Approximately $0.01 per GB. 
  • Inter-Region Transfer: Ranges from $0.02 to $0.16 per GB. 
  • Inter-Continental Transfer: $0.05 to $0.16 per GB. 
  • Internet Egress: First 100GB/month free; subsequent rates vary by region. 

More on Bandwidth pricing: Azure Bandwidth Pricing 

Smoothing Mechanism

This feature balances CU consumption over time. It helps manage workloads within the same capacity, ensuring average, rather than peak performance costs, which is particularly beneficial for interactive operations (averaged over short periods) and background tasks (averaged over 24 hours). 

Reality check

If you build out a solution with an F SKU, are you really going to turn it off and on? My gut instinct says NO unless you are creating a more sophisticated architecture of Workspaces / F SKUs where you can turn one process off without impacting the complete solution. We will get into this in a future blog post, but for now be mindful of how to reap the benefits of pay-as-you-go. For now there is no way to automate this and can only be done by an Azure Admin (Pause and resume your capacity – Microsoft Fabric | Microsoft Learn)


Next Steps

Flexibility with a lot of options is a double-edged sword. On one hand, you can mix and match to fit your exact needs, but there are so many considerations even for what seems like the smallest decisions. Take an incremental and empirical approach to choose the right Power BI and Fabric licensing. Focus on these four variables: volume, audience, features, and use case with a roadmap for scale. 

Still not sure? Schedule time to chat about the right Power BI licensing path for your organization.
Register for our Free Power BI Workshops

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