Your Guide to Power BI Licensing in the Microsoft Fabric Era

Licensing in the Microsoft Fabric world has never been a straightforward path. There are always permutations, alternatives, and perspectives on the best path for enterprise deployment. Microsoft’s leap forward with Fabric combines the best of the Power BI, Azure Synapse Analytics, and Azure Data Factory worlds.  It has also introduced new wrinkles that need to be considered.  

In this comprehensive guide, I’ll break down the latest updates in Power BI licensing, highlight the key benefits of the new Fabric capacities, and provide practical insights to help you make informed decisions. Whether you’re a seasoned Power BI user or just getting started, this guide will equip you with the knowledge you need to navigate the evolving landscape of Power BI licensing with confidence. 

The Deprecation of the Power BI Premium Capacity License 

Microsoft announced the retirement of Power BI Premium per capacity SKUs (P SKUs) in favor of Microsoft Fabric capacities (F SKUs).  

New customers cannot purchase P SKUs after July 1, 2024, and existing customers will transition to F SKUs by January 1, 2025. There are some edge cases that will still allow for the purchase of Power BI Premium Capacity, such as U.S. Government Community Cloud (GCC) clients who require stringent data security and compliance protocols. These organizations can continue using P SKUs to meet their unique regulatory needs. Existing users of Power BI Premium Capacity have until the end of 2024, but customers should consult with a partner to create a migration plan.

Recent announcements of the deprecation of Power BI Premium Capacity in favor of Fabric F64 SKUs create even more wrinkles, but new opportunities. Additionally, Microsoft has just announced price increases for Pro (from $10 to $14/user per month) and Premium Per User licenses (from $20 to $22/user per month) that have undoubtedly altered the decision-making process for organizations with thousands of Pro users.  

Consolidate and Scale Power BI Licensing with the F64 SKU 

These changes force organizations to reevaluate their Power BI licensing strategies, particularly those with hundreds or thousands of Pro licenses. The price increase from $10 to $14 per user per month significantly impacts budgets for organizations relying on Pro licenses for large teams. For these organizations, transitioning to Fabric’s F64 SKU may present an opportunity to optimize costs and expand capabilities. 

The F64 SKU eliminates the need for individual Pro or Premium Per User licenses for report consumption, which can reduce licensing overhead for large-scale deployments. Additionally, F64 offers advanced capabilities, such as larger semantic model sizes (up to 25 GB), enhanced dataflows, and integration with the suite of Fabric tools like Synapse and OneLake. These features not only streamline governance but also open doors to modern analytics and data science capabilities that were previously unavailable in traditional Power BI environments. 

For organizations managing hundreds of Pro licenses, the ability to consolidate licensing and leverage enterprise-grade analytics at scale makes the F64 SKU an attractive option. Engaging with a knowledgeable partner is essential to assess current workloads, forecast future needs, and design a migration plan that maximizes the value of the new Fabric ecosystem while maintaining cost efficiency. 

Power BI Licensing 101 

First off, some licensing basics and what hasn’t changed in the licensing world of Power BI:

Power BI Desktop

Power BI Desktop is STILL free. This includes the ability to create and share PBIX files. Create, edit, build models and relationships to your heart’s content! It’s only when you want to start sharing with others that you need to consider the licensing options.

Power BI Pro

What happens when you want to share those beautiful reports with colleagues? That’s when you need to consider purchasing Power BI Pro licenses. At $14/per user/month, this is an excellent starting point on the journey to self-service analytics. Publishing reports via the “Power BI Service”, Microsoft’s cloud-hosted Power BI publishing platform, requires a Power BI Pro license for both publishers and report consumers. Check with your admin to see if your enterprise licensing includes a Pro license, as M365 E5, and Office 365 E5 licenses include it!  

This gives you the ability to:

• Create workspaces and apps – dictate how you share your reports, schedule data refreshes, and more!  
• Leverage capabilities such as customized App design, dashboards, data alerts, and more 
• Shared and certified Semantic Models (formerly Data Sets) 
• Ad-hoc analysis of Semantic Model in Excel  
• Edit reports and semantic model in the Service 
• Publish reports to the web for FREE (but these reports are truly publicly available, so be cautious with exposing sensitive data) 

Limitations of Pro licenses:  

• 1 gb Semantic Model memory size limit 
• 8 refreshes/day 
• 10gb/user max storage 
• End-users must have Pro or PPU license, unless reports are published to the web 

Power BI Premium Per User (PPU)

PPU is an enhanced version of Power BI the provides increase capabilities compared to Pro, without large monthly capacity commitments. It’s a great option for organizations that have outgrown Pro but aren’t quite ready to make large monthly commitments. 

Additional features include:  

• Advanced AI, dataflows, and datamarts 
• XMLA end-point read/write 
• 48/refreshes/day 
• 100TB maximum storage 

One key factor to consider is that when reports are published to a PPU workspace, ALL end-users must have a PPU license. This is an important caveat to consider in enterprise settings that blow past the Pro license model memory and storage limits that may wish to leverage advanced capabilities.

What’s New For Power BI Licensing 

Out with the old P-SKUs, in with the F-SKU – One SKU to rule them all.
Starting in July of 2024, new Power BI users can no longer purchase Power BI Premium per capacity. Existing customers will need to work with their Microsoft account rep to transition to a suitable Fabric capacity. Is this a big shift? Yes and no. It simplifies the multiple Power SKUs and eliminates the need for A, E, and P SKUs. Pricing has shifted a bit, as well, with pay-as-you go F64 SKUs currently priced at $8,409.60/month (West US, as Data Center Region pricing can shift based on region). 

What are the benefits of the new Fabric Capacity?  

• Fabric capacity SKUs also allow for pay-as-you-go billing options, allowing customers to dynamically scale up/down, or even pause capacity, as needed. Don’t pay for what you don’t need!  
• Access to Azure-only features like  trusted workspace access for OneLake shortcuts and Managed Private Endpoints for Spark. 

• Microsoft Azure Consumption Commitment (MACC) agreements will now allow Fabric customers to apply their F SKU spend against their enterprise MACC commitment.  
• Copilot in Fabric requires F64 or above 

What is a Premium SKU in the F SKU world?

F64 offers all Power BI Premium SKU capabilities with flexible options: monthly, pay-as-you-go or annual reservations at a reduced cost. The F64 is everything you need to get started on your journey to enterprise-grade, self-service analytics

With an F64 SKU, end users will not need per user licenses (Pro or PPU) to access reports on the F64 capacity. There are a host of additional advanced features that include: 

• Dynamic Scaling 
• Paginated Reports for those that can’t let SSRS go 
• Enhanced Data Flows – 32+ parallel tasks 
• Unlimited Direct Lake model size 
• Deployment pipelines 
• 48 refreshes/day 
• Larger Semantic Model – F64 SKU is 25gb 
• Unlimited sharing to end users w/o licensing 
• Access to Embedded SKUs (formerly A1 SKUs) on F8 and above 
• Integration with Fabric tools like Azure Data Science and Synapse Data Warehousing 

Additionally, the F64 SKU gives you access to all the horsepower necessary to embrace the suite of modern analytics tools available to Fabric users. From Azure Data Science to Synapse Data Warehousing, you get an incredible amount of potential to modernize your data architecture. You also get access to Copilot for Fabric to leverage the ever-growing Fabric AI capabilities.

Power BI Embedded Analytics and F SKUs: A New Era for Embedding Insights

Power BI Embedded Analytics allows developers to integrate Power BI reports, dashboards, and visuals directly into web applications or websites. Whether you’re delivering data experiences for customers or internal teams, embedding Power BI provides a seamless, branded analytics experience while leveraging the rich functionality of the Power BI ecosystem.

How Embedded Analytics is Used

Power BI Embedded enables two primary solutions:

1. Embed for Your Customers (App Owns Data):
   • Designed for external users, such as clients or customers.
   • The app manages authentication using service principals or a master user, meaning the end users don’t need Power BI accounts.
   • Commonly used by independent software vendors (ISVs) who embed Power BI in customer-facing applications.
   • No user licenses are required for end users.
2. Embed for Your Organization (User Owns Data):
   • Focused on internal use, enabling employees to consume embedded Power BI content.
   • Requires users to authenticate using their Power BI credentials via Microsoft Entra ID (formerly Azure AD).
   • Each user must have a Power BI Pro or PPU license to view the embedded content unless deployed on a Fabric F64 capacity.

Comparison: Embed for Your Customers vs. Embed for Your Organization

Feature	Embed for Your Customers	Embed for Your Organization
Authentication Method	App manages authentication	Users authenticate via Entra ID
Licensing Requirements	No user licenses required	Each user needs a Power BI license or F64 Workspace
Use Case	External-facing apps	Internal business apps
App Ownership	App owns data	User owns data

Embedded Analytics and F SKUs: A Licensing Shift

Previously, embedding Power BI required A SKUs (Azure-based) or P/EM SKUs (Office-based). However, with the introduction of Microsoft Fabric and F SKUs, embedding capabilities have expanded:

F SKUs with Embedded Capabilities:

• • Starting at F8 SKUs, you gain access to Power BI Embedded capabilities.
  • The F8 SKUs provide the same functionality as A1 SKUs, including embedding Power BI reports without requiring per-user licenses for end users.
  • F64 and Above: Offer full enterprise-grade features, such as larger model sizes, enhanced refresh rates, and integration with the broader Fabric ecosystem.

Benefits of Using F SKUs for Embedded Analytics

1. Cost Efficiency:
   • For organizations previously managing multiple A SKUs for embedding, consolidating to a Fabric F SKU simplifies resource management and provides access to additional Fabric features.
2. Scalability:
   • F SKUs allow dynamic scaling with pay-as-you-go options, letting organizations adjust capacity based on usage needs or even pause services during downtime.
3. Advanced Features:
   • Enhanced integration with Fabric tools like Synapse, OneLake, and Spark.
   • Larger semantic model support, up to 25 GB on an F64 SKU.
4. Unified Ecosystem:
   • Transitioning to F SKUs aligns embedded analytics with enterprise-grade capabilities, supporting both internal and external-facing use cases in one streamlined framework.

Considerations for Choosing Embedded Licensing

• For customer-facing apps, A SKUs remain a viable Azure option, but organizations already investing in Microsoft Fabric may find F SKUs more cost-effective and better aligned with broader analytics needs.
• Internal use cases where employees access embedded reports may require user licenses unless using an F64 or higher SKU to eliminate per-user licensing requirements.

Power BI Embedded Analytics, enhanced by Fabric’s F SKUs, empowers organizations to deliver dynamic, scalable, and branded analytics experiences. By embracing the new F SKUs, companies can streamline their embedded analytics strategy while benefiting from Microsoft’s integrated Fabric capabilities.

What about On-prem Power BI Report Server?

Old-school Power BI users will notice I have mentioned the on-prem variant of the Power BI Service, Power BI Report Server. For those hesitant to embrace the cloud-first nature of Power BI Service, there’s always been Report Server.  

Power BI Report Server offers a solution for those who need to keep their data and reports on-premises. It supports the same robust reporting capabilities as Power BI Service but allows you to host reports within your own infrastructure. This can be an ideal solution for industries with strict data governance, compliance requirements, or simply a preference for on-premises management. With Report Server, you can create and publish paginated reports, interactive Power BI reports, and mobile reports, all from behind your firewall. 

Power BI Report server is available through two different licenses: Fabric F64 reserved capacity or SQL Server Enterprise Edition with Software Assurance. Pricing depends on a variety of licensing models, but it generally starts at around $18,900 for the first year. 

6 Reasons to switch to the new Fabric FSKU 

Frankly, you don’t really have a choice if you want to add new licenses after Jan 1, 2025, unless you’re a government client. But despite the forced migration, there are many benefits of F SKUs for Power BI to consider over the old licensing model: 

It’s Cost Efficiency: F SKUs offer flexible pricing, letting businesses pay only for what they use, which is ideal for those with fluctuating analytics needs. 

It’s Scalability: F SKUs allow organizations to adjust capacity as needed, optimizing costs during low usage periods. For example, an e-commerce platform can increase its server resources during peak shopping seasons like Black Friday and then scale down after the rush, saving on operational costs. 

It Enables AI: The F SKUs provide access to exclusive Fabric features that are not available in the traditional licensing model. These features include enhanced capabilities for data management and analytics, allowing organizations to utilize more powerful tools. For example, companies can leverage advanced AI algorithms for predictive analytics, helping them make informed business decisions based on large-scale data insights. 

It’s Simplified: The transition to F SKUs streamlines licensing, making subscription management easier and reducing administrative overhead. For example, instead of managing multiple individual licenses for different services, companies can now handle all their subscriptions under a single, unified license. 

It’s Better for Collaboration: F SKUs allow free license users to access Premium content, encouraging an inclusive data culture within the organization. For example, a marketing team can share detailed analytics reports with sales representatives, enabling them to make data-driven decisions without needing separate premium licenses. 

It’s Future-Proof: Adopting F SKUs allows organizations to benefit from future enhancements and integrations in the Microsoft ecosystem, especially with Microsoft Fabric. For example, if Microsoft introduces a new AI capability that is only compatible with F SKUs, organizations will be able to seamlessly integrate this technology into their existing workflows without needing major upgrades. 

Summary and Next Steps 

Switching to the new F SKU model makes sense for organizations experiencing growth, needing advanced features, or seeking better collaboration and budget flexibility. Conversely, those with stable usage, existing contracts, or complex migration needs may choose to stay with their current licensing until conditions change. 

• Transition to Fabric Capacities: Microsoft is retiring Power BI Premium per capacity SKUs (P SKUs) in favor of Microsoft Fabric capacities (F SKUs), with new customers unable to purchase P SKUs after July 1, 2024, and existing customers transitioning by January 1, 2025. 
• Power BI Pro and PPU license Prices are Increasing: Microsoft has announced price increases for Power BI Pro licenses from $10 to $14 per user per month and Premium Per User (PPU) licenses from $20 to $22 per user per month. 
• Power BI Pro Overview: Power BI Pro licenses, now priced at $14 per user per month, are essential for sharing reports and include features like workspace creation, customized app design, and data alerts. 
• Limitations of Pro Licenses: Pro licenses have limitations such as a 1 GB Semantic Model memory size, 8 refreshes per day, and 10 GB max storage per user. 
• Premium Per User (PPU) Features: PPU licenses, now priced at $22 per user per month, offer advanced features like 48 refreshes per day, 100 TB maximum storage, and advanced AI capabilities. 
• Fabric Capacity Benefits: Fabric capacities (F SKUs) offer benefits such as pay-as-you-go billing, dynamic scaling, and access to Azure-only features like trusted workspace access for OneLake shortcuts. 
• Power BI Report Server: Power BI Report Server remains an option for on-premises data and report hosting, available through Fabric F64 reserved capacity or SQL Server Enterprise Edition with Software Assurance. 

FAQ: Power BI Licensing in the Era of Microsoft Fabric 

Q: What is happening to Power BI Premium per capacity SKUs (P SKUs)?  

A: Microsoft is retiring Power BI Premium per capacity SKUs (P SKUs) and transitioning to Microsoft Fabric capacities (F SKUs). New customers cannot purchase P SKUs after July 1, 2024, and existing customers will transition to F SKUs by January 1, 2025. 

Q: What are the new pricing changes for Power BI licenses?  

A: The price for Power BI Pro licenses has increased from $10 to $14 per user per month, and for Premium Per User licenses, from $20 to $22 per user per month. 

Q: What benefits do the new Fabric capacity SKUs offer?  

A: The new Fabric capacity SKUs offer several benefits, including: 

• Pay-as-you-go billing options 
• Dynamic scaling 
• Access to Azure-only features like trusted workspace access for OneLake shortcuts and Managed Private Endpoints for Spark3. 

Q: How does the integration with Azure work for Fabric customers?  

A: Microsoft Azure Consumption Commitment (MACC) agreements now allow Fabric customers to apply their F SKU spend against their enterprise MACC commitment. 

Q: What is required to use Copilot in Fabric?  

A: Copilot in Fabric requires an F64 SKU or above. 

Q: What features does the F64 SKU offer?  

A: The F64 SKU offers all Power BI Premium SKU capabilities with flexible options, including monthly, yearly, or pay-as-you-go. It includes advanced features like dynamic scaling, paginated reports, enhanced data flows, unlimited Direct Lake model size, deployment pipelines, and more. 

Q: What about on-premises Power BI Report Server?  

A: Power BI Report Server is available for those who need to keep their data and reports on-premises. It supports the same robust reporting capabilities as Power BI Service but allows hosting within your own infrastructure. It is available through Fabric F64 reserved capacity or SQL Server Enterprise Edition with Software Assurance 

Q: What license type is needed to view Power BI?

A: A free license will work fine if you only need to view content and it is stored in a Premium capacity. A Pro or PPU license is necessary for sharing, collaboration, and accessing advanced features.

Next Steps

We hope this clarifies the new Power BI licensing options and their respective features. However, if you are still unsure about the best path forward for your migration, we are here to help.  

Set up a consultation with our experts to walk through the intricacies of the new Power BI licensing and ensure you make the most informed decision for your organization’s needs.