Microsoft Fabric and Power BI Licensing

What is Microsoft Fabric?

Fabric is a unified analytics platform that brings together Microsoft's data and analytics tools. It's essentially just a rebranding of Microsoft's data offering – it's not a new product of its own, but rather a family of the existing analytics tools that Microsoft have brought together into a product suite called Microsoft Fabric.  

The Fabric platform is built on a shared SaaS foundation. It brings together components from Power BI, Data Factory, and Azure Synapse into a single integrated platform. Seven products make up Microsoft Fabric – Data Factory, Synapse Data Engineering, Synapse Data Warehousing, Synapse Data Science, Synapse Real Time Analytics, Power BI, and Data Activator – and they are built on OneLake. Every Microsoft Fabric tenant is automatically provisioned with OneLake, and it’s described as being the “OneDrive for data”, as Fabric is wired to use OneLake for storage much like the Microsoft 365 Apps are wired to use OneDrive.

Fabric Terminology 

Understanding the key Fabric terminology is helpful when trying to make sense of Fabric. Firstly, you have your Microsoft tenant, which acts as a central, isolated container for all your Microsoft services, subscriptions and user accounts and is associated to public domains. Then you have capacities which reside within a tenant and contains a pool of resources allocated to Fabric, and you can choose different sizes of the capacity which determines how much computing power will be available. Within capacities you have workspaces which are containers of Fabric items – personal workspaces (everyone gets one by default, called ‘My Workspace’) and shared workspaces that you use for collaborating.  And finally experiences which is the word used to describe the different Fabric elements - Synapse Data Warehouse, Synapse Data Engineering, Synapse Data Science, Synapse Real-Time Analytics, Data Factory and Power BI. 

License Requirements for Fabric & Power BI

Moving onto licensing – I’m covering both the Fabric and Power BI licenses in this blog as some Fabric licenses include Power BI functionality, and some Power BI licenses include Fabric items. Since Fabric was announced it has caused some confusion, especially for customers who were already purchasing Power BI licenses. An important thing to remember if that the Power BI licenses have not actually changed, there are just additional options available now that extant to cover all the other fabric experiences as well.  

There are four things you need to pay for to use Fabric: 

• Capacity Licenses – provides the infrastructure for Fabric. 
• User Licenses – allows users to access Fabric. 
• Storage – OneLake storage.  
• Network – cross-region data transfer network charges depending on the source/destination of each storage access. 

If you are an SMB customer who is only using the Power BI capabilities and do not require any of the other Fabric experiences, you only need to purchase Power BI user licenses, which I’ll go into in more details in the user licenses section.   

Capacity Licenses 

The Power BI and Fabric capacity licenses are split into SKUs, and each SKU provides different amounts of memory and computing power. There are four different SKU categories: 

• F SKUs – These are the Microsoft Fabric Capacity SKUs. These are Azure SKUs and are billed on a PAYG basis. 
• P SKUs – These are the Power BI Premium Capacity SKUs. The P SKUs are subscription licenses, and therefore you pay a fixed price each month or annually, with a 1 month or 1 year commitment.
• EM SKUs – These are also Power BI Premium SKUs; however, they are only available through volume licensing plans.
• A SKUs - Power BI Embedded SKUs - These are for ISVs and developers who want to embed visuals into their apps, and apps using Power BI embedded allow users to consume content stored on Power BI Embedded Capacity.   

The table below lists all the Microsoft Fabric capacity SKUs and the equivalent Power BI capacity SKUS. 

The Power BI/P SKUs support Power BI and Microsoft Fabric, whereas the A and EM SKUs only support Power BI. The F SKUs support Microsoft Fabric and Power BI, but only some F SKUs support Power BI collaboration.  

The other columns in the table are for the capacity units (CUs), which are units of measure representing a pool of compute power which is required to run all queries, jobs, or tasks in Fabric, and the Power BI v-cores. 

The P SKUs and F SKUs F64 and higher allow users with a Microsoft Fabric free license to view and interact with content hosted in these capacities that has been shared with them. SKU F32 and lower do not support Power BI collaboration, which means if the Power BI content is hosted in a capacity that's smaller than F64, users will require a Power BI Pro or PPU license to share or consume shared content.  

This is why comparing the pricing for lowest Fabric capacity SKU (F2) with the lowest Power BI Premium Capacity SKU (P1) is not an accurate comparison, as F2 does not allow users will a free license to view shared content. 

Another thing to consider when comparing the F and P SKUs is that they offer two different purchasing options. The P SKUs are subscription licenses, so you are billed a fixed price monthly (or annually if you choose to pay upfront for an annual commit subscription), for a monthly or annual term.  The F SKUs are Azure SKUs, so you are charged on a pay-as-you-go (PAYG) basis, which offers more flexibility as you can scale them up or down as needed or pause them with no usage commitment. This is why the F SKUs are more expensive than their P SKU equivalents. 

So, we have established that F64 and higher SKUs, and all the P SKUs, allow users to consume shared content without needing a paid Power BI user license. However, you still need to ensure that the users who are creating and publishing the Power BI content in these shared workspaces are provisioned with a Power BI Pro or PPU license. It's only the users who are doing non-publishing activities that don't require a paid Power BI license.  

If you already have a Power BI Premium Capacity (P SKUs) and want to start using the other Fabric experiences as well as Power BI, you don't have to switch to a Fabric Capacity (F SKUs) as Microsoft enabled Fabric for all tenants with Power BI Premium capacities on July 1st, 2023. So, unless you've manually changed the tenant settings to disable Fabric, you will be able to access all the Fabric experiences.  

To summarise, these are the key differences between the capacity licenses: 

• Power BI Premium Capacity (P SKUs)
  - Supports all Fabric experiences.
  - To create workspaces and share content a Power BI Pro or PPU license is required.
  - To view content, a Microsoft Fabric Free license is required and the viewer role on the workspace.  

• Power BI Embedded Capacity (A SKUs)
  - Supports Power BI only, this is for ISVs and developers who want to embed visuals into their applications.  
  - To create workspaces and share content a Power BI Pro or PPU license is required.  

• Fabric Capacity (F SKUs)
  - Supports all Fabric experiences. 
  - SKUs F32 and lower allow you to share Fabric content with users with a Power BI Pro license, or Power BI content with users with a Power BI Pro or PPU license.
  - SKUs F64 and higher allow you to share Fabric content with users with a Microsoft Fabric Free license and viewer role. 

On November 16th, 2023, Microsoft announced the general availability of reservations for Microsoft Fabric, which means you can pre-commit to Fabric capacity units in one-year increments and get discounted pricing (up to 40.5%!). This only applies to Fabric capacity (F) SKUs, not the Power BI Premium capacity (P) SKUs. For more information about Fabric reservations refer to Microsoft documentation here.  

User Licenses 

Per-user licenses are required for users to access and work in Microsoft Fabric. There are three types of user licenses: 

• Microsoft Fabric Free (previously called Power BI Free) 
• Power BI Pro 
• Power BI Premium Per-User (PPU) 

Microsoft Fabric Free

Microsoft Fabric Free is basically just a rename of Power BI Free license – this has caused a lot of confusion but it's essentially the same but now extends to cover the other Fabric experiences as well. 

The Microsoft Fabric Free license allows you to create and share Fabric content items if you have access to a Fabric Capacity.  

In Power BI, it allows users to create their own reports and dashboards in their personal Power BI workspace (my workspace) but does not allow any collaboration, unless you have access to a Premium capacity. If the workspace is hosted in a Power BI Premium Capacity or a Fabric F64 or higher capacity, and you have the view role on the workspace, you can view and interact with Power BI content shared to you in the shared workspace.  

Another thing that has been coming up a lot is where a Power BI Pro trial has been enabled in a customer's tenant, so they have started using all the Pro sharing and collaboration features, but when the trial expires, they are no longer able to. Historically when Power BI was released in 2015 the free license allowed you to share and collaborate, but this changed in 2017 when Microsoft announced that the sharing and collaboration features would be limited to just users with Power BI Pro.

Power BI Pro

The Power BI Pro license allows you to share content with other Power BI Pro users, or with free or PPU users if the content is hosted in a Power BI Premium or F64+ capacity. It's available as a standalone license but is also included in M365 E5 and O365 E5.  

I mentioned earlier that if you are an SMB customer and are only looking to use Power BI, you can just purchase the per-user licenses and no capacity licenses are required. This is because the cheapest capacity SKU that allows sharing of Power BI content to free users is more than $8,000/month. Therefore, Premium capacity licensing only becomes more cost effective than using per-user Power BI Pro licenses if you have more than 500 users. 

Power BI Premium Per-User (PPU)

The PPU license allows you to license individual users with the Power BI Premium features, without having to purchase a premium capacity - it is more cost effective for customers with less than 250 users. The feature differences between Power BI Premium Per User and Per Capacity are documented here.  

You can uplift a user from Power BI Pro to PPU, however this is not achieved with a license upgrade. Instead, you add the 'Power BI Premium Per User Add-on' license to the Power BI Pro license and the user receives all the features of PPU. The Power BI Pro base license and PPU add-on license is the same price as buying the PPU base license outright.  

To summarise, these are the key differences between the user licenses: 

• Microsoft Fabric Free (previously called Power BI Free)
  - This license used to be called Power BI Free, it’s only been renamed to Fabric Free to reflect that it’s inclusion in the Microsoft Fabric family. Users can create their own Power BI items like reports/dashboards in their own workspace (My Workspace), but they cannot share Power BI content. Free users also can’t consume content shared with them by Power BI Pro/Premium users unless that content is hosted in a premium workspace.  
  - If you have access to a Fabric capacity, then you can create and share Fabric content (other than Power BI content) in Microsoft Fabric.  
  
  
• Power BI Pro 
  - Allows you to share Power BI content with other users with a Power BI Pro license. 
  - Allows you to share Power BI content with users with a Microsoft Fabric Free license if the content is hosted in premium capacity. 
  - Allows you to share Power BI content with users with a Microsoft Fabric Free license if the content is hosted on F64 or larger Fabric capacities. Capacities smaller than F64 require users to have a Power BI Pro license to consume Power BI content. 
  
  
• Power BI Premium Per User (PPU) 
  - Allows users to access the Power BI Premium features, without premium capacity.  
  - More cost-effective than premium capacity for sharing Power BI content if the customer needs the premium features for less than 250 users and doesn’t require the other fabric experiences.  
  - Allows you to share Power BI content with other users with a PPU license. 
  - Allows you to share Power BI content with users with a Microsoft Fabric Free or Power BI Pro license if the content is hosted in premium capacity. 
  - Allows you to share Power BI content with users with a Microsoft Fabric Free license if the content is hosted on F64 or larger Fabric capacities. Capacities smaller than F64 require users to have a Power BI PPU license to consume Power BI content. 

Guest User Licensing 

You can share Power BI content with external users by inviting them to view content as a guest. There are two prerequisites, you need to external sharing enabled and the guest user must be licensed correctly. The person inviting the guests also needs a Power BI Pro or PPU license to do so.  

 The below table lists the licensing requirements for Guest Users - there is a few different ways to can achieve the licensing requirements. 

1. Use a Power BI Premium Capacity - this allows the guest user to use the app without requiring a Power BI Pro license. However, as I mentioned earlier this is only more cost effective if you're dealing with 250 or 500+ users depending on whether you need the premium features. 
   
2. Assign a Power BI Pro or a Premium Per User (PPU) license - you can assign them their own Power BI Pro/PPU license in your tenant. 
3. Guest user brings their own Power BI Pro or Premium Per User (PPU) license - if the user is already assigned a Power BI Pro/PPU license in their own tenant, they are able to access the Power BI content you've shared with them and don't need any additional licenses provisioned in your tenant. 

Licensing can be complex, depends on the customers’ requirements and their environment, and it often changes – so as always, please feel free to reach out if you have any questions 😊