Many firms that run Dynamics 365 have built something next to it. For example, there might be a model-driven app for supplier onboarding. Another might handle internal requests. A project team may have built a third on the same Dataverse data. Since the users already hold Dynamics 365 licences, few people asked if those apps were covered.
That is about to matter. From February 2027, Microsoft enforces Power Apps licensing for model-driven apps. However, the Power Apps rights inside a Dynamics 365 licence are narrower than many teams assume. So model-driven apps licensing needs a fresh look. At , we see this as a choice about which apps your business relies on. It is more than a licence clean-up.
Why do model-driven apps need a premium licence?
Because they run on Dataverse, and Microsoft treats Dataverse apps as premium. Microsoft's states that model-driven apps use Dataverse. As a result, they are premium apps by default. So every user who runs one needs a licence with Power Apps premium use rights.
The same FAQ also lists what makes any app premium. Dataverse is on that list. Premium connectors, on-premises data gateways and custom APIs are on it too.
What Power Apps rights does a Dynamics 365 licence include?
Limited rights, inside the licensed app's own context and environment. Microsoft states that Dynamics 365 licences include some Power Apps use rights. However, these apply only within the context of the licensed Dynamics 365 app. They also apply only in the same environment as that app.
The calls these limited use rights. They let users customize and extend Dynamics 365 apps. In addition, the guide notes that the rights vary by licence type.
In practice, both of these tests must pass:
- Context: the app extends the licensed Dynamics 365 app. It does not serve an unrelated purpose.
- Environment: the app runs in the same environment as that licensed app.
Where do Dynamics 365 rights stop?
At the edge of the licensed app. Microsoft's FAQ is clear on this point. Say you use an app in an environment not enabled for Dynamics 365. Then the included rights do not apply. Instead, you need separate Power Apps licensing.
Take a common example. A service team runs Dynamics 365 Customer Service. Its agents are licensed. The team then adds extra forms and views to the app. That work sits inside the licensed context, so it is covered.
Later, however, the operations team builds a separate model-driven app for supplier quality issues. It lives in its own environment. Then the same agents get access to it. This app sits outside the context and outside the environment. So the agents' Dynamics 365 licences do not cover it.
Microsoft adds one more detail. Some Dynamics 365 licences carry only limited Power Apps rights. In that case, canvas apps with premium features must be embedded in a model-driven app. They must use the supported custom page method. Users cannot play them on their own in a browser or the mobile player.
Does a Power Apps licence cover Dynamics 365 data?
Not all of it. In fact, the boundary runs both ways. Microsoft's explains this. Some Dataverse tables belong to Dynamics 365 apps. To create, update or delete rows in them, users need the matching Dynamics 365 licence.
For example, the Goal table needs a licence such as Dynamics 365 Sales Professional or Sales Enterprise. Similarly, the Knowledge article table needs a licence such as Dynamics 365 Customer Service Enterprise. Microsoft does list a few exceptions. For instance, Power Apps users can create and manage their own cases. Also, read-only access to these tables does not need the Dynamics 365 licence.
So the rule cuts both ways. A Dynamics 365 licence does not cover Power Apps beyond its own app. Likewise, a Power Apps licence does not cover writing to Dynamics 365 data. Each licence has a boundary. And model-driven apps on shared Dataverse data often cross both.
What changes in February 2027?
Enforcement. Microsoft lists model-driven apps among the areas it will now enforce. This also covers apps used outside a Dynamics 365 environment. Until now, these rules were applied loosely. From February 2027, users without the right licence will not be able to open those apps until someone assigns one. Microsoft also notes that the rule itself is not new.
How should leaders check model-driven apps licensing?
Run three tests on every model-driven app:
- Premium: every model-driven app is premium, so every user needs premium Power Apps rights from somewhere
- Context: does the app extend a licensed Dynamics 365 app that its users hold?
- Environment: does it run in the same environment as that app?
If an app fails test 2 or test 3, you have three options. You can buy separate Power Apps licences. You can move the app inside the licensed app, where that truly fits. Or you can retire it.
To start, use Microsoft's licensing reports in the Power Platform admin center. They show which users need a licence, so they give you a first list. This also links to two related topics: and .
Who should own the review?
One named owner, with authority across licences, apps and environments. Today, these often sit with different teams. For example, procurement or IT asset management owns licences. The teams that built the apps own the apps. Meanwhile, the platform team owns environments. When each group owns only its piece, nobody owns the key question. Is this user covered for this app?
The fix is simple. Give one person that question. Also give them the licensing reports and the authority to license, move or retire each app. That way, you avoid finding the answer only when an app stops opening.
Frequently asked questions
Are model-driven apps always premium? Yes. Microsoft states that model-driven apps use Dataverse and are premium by default.
Does a Dynamics 365 Sales licence cover any model-driven app? No. The included Power Apps rights apply only within the context and environment of the licensed Dynamics 365 app.
Does a Power Apps licence let users update any Dataverse table? No. Some restricted tables belong to Dynamics 365 apps. To create, update or delete rows in them, users need the matching Dynamics 365 licence. Microsoft lists a few exceptions.
When does enforcement start? February 2027. Microsoft has not published a specific day.
DAX Software Solutions: Planning Before Enforcement
DAX Software Solutions implements Dynamics 365 Sales and Customer Service. We also build and support Power Apps on Dataverse. In addition, our managed services teams help keep those apps stable over time. Has your Dataverse estate grown beyond your licensed apps? If so, now is the time to map it. .
Microsoft's licensing terms may change. Check the current terms for your tenant and agreement before you act.