A Guide to Understanding Power BI Premium Capacity Licenses

By Dan Brewster

Director of Client Services – Microsoft, NPI

December 07, 2021

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In a crowded business intelligence solution marketplace, few solutions match the popularity (and revenue) of Microsoft’s Power BI. More than 250,000 organizations use Power BI, including 97 percent of the Fortune 500. Over the years, the offering has evolved quite a bit – most recently with the introduction of Power BI Premium capacity licenses. For many customers, these licenses present an opportunity for savings or at least a rightsized realignment of use and spend.

This is something I’ve written about before, but think it’s worth a revisit. Why? Enterprises are eager to create and foster a data culture within their organizations. Many Microsoft customers are taking a fresh look at the vendor’s capabilities and how they can be utilized to enable data-driven decision making.

The Evolution of Power BI

Part of the Microsoft Power Platform, Power BI aims to provide interactive visualizations and business intelligence capabilities with an interface simple enough for end users to create their own reports and dashboards. Power BI has been around for a lot longer than most people realize. It was first brought to market in 2011 and was bundled with SQL Server. Since then Microsoft has made improvements to the data visualization capabilities and has enhanced the product with many new features. Microsoft released Power BI for Office 365 in late 2013 and has continued adding features to the product over time. One of the most significant releases occurred in May 2017 with the introduction of Power BI Premium.

It makes sense to look at the world before Power BI Premium for just a moment, though. When the Power BI Pro product was released, all users required a license – whether they were content creators or content consumers.  This could (and did) have significant financial implications for enterprise customers. Suppose you had a core team of 50 Power BI content creators, but there were 20,000 employees in the organization that were viewing dashboards or occasionally viewing reports from Power BI. Before Power BI Premium, you would need to have purchased 20,000 Power BI Pro User licenses. Considering that the Power Platform is offered as a subscription product, each user would have required a monthly subscription, which was priced at $7.47 per month under an Enterprise Agreement.  $7.47 x 20,000 x 12 months? That’s right, you did the math correctly – that would have been $1.792M annually. Wow!

Things changed in 2017 with the introduction of Power BI Premium, which is a reserved (and dedicated) capacity for your workload analytics. As an aside, Power BI Pro’s analytical capacity is not dedicated – it is shared with other customers. The new dedicated capacity license meant you could size your Power BI Premium investment based upon your need. Microsoft offers various tiers of computational power with the Power BI Premium capacity SKUs (EM1, EM2, EM3, P1, P2, P3, P4, and P5) – these levels all offer different amount of ram, virtual cores, and support for multiple queries per second. Visit this page for more information about the various Power BI Premium capacity tiers available.

The Price Advantage of Power BI Premium Capacity Licenses

Let’s revisit the pricing for just a moment. Prior to Power BI Premium, you could be looking at significant spend for your Power BI consumers. With the release of Power BI Premium capacity licenses, Microsoft now only requires the content creator to have a Power BI Pro User license (or, since April 2021, a Power BI Premium User license).  The content consumers can simply access dashboards and view content via the Power BI Premium Capacity licenses.

Using the scenario above, a customer could purchase 50 Power BI Pro subscriptions for its core team of content creators for an annual cost of $4482.00 ($7.47 x 50 x 12). As for the rest of the 19,950 content consumers, the customer could choose from the following capacity licenses SKUs based on their requirements:

Even with upper tier pricing, the combined annual cost is well below the initial $1.792M that would have been spent prior to the introduction of Power BI Premium capacity licenses.

Material savings are available for those customers that want to better align usage, requirements and spend. If you’re interested, I suggest visiting this page on Microsoft’s website to better understand the sizing and capacity of each of the various tiers. Truthfully, some experimentation will likely be necessary as the size of the data set, complexity of the queries, and the number of concurrent users will all have an impact on performance. Microsoft used to feature a Power BI Premium sizing calculator on its website, but the calculator has since been removed. I’m guessing this is due to the many variables involved in properly sizing the demand.

Here’s another suggestion: These are monthly subscription licenses, so it makes sense to start off on a conservative basis and add capacity as your run into performance limitations. Every client NPI has worked with that has made the switch to Power BI Premium capacity licenses has reduced their Power BI spend. If you’d like to learn more about how you can save on your Power BI costs, reach out to us.