Part 2 – Demystifying Microsoft Fabric Licensing and pricing

Part 2 – Demystifying Microsoft Fabric Licensing and pricing

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Microsoft Fabric license types

Microsoft Fabric provides a diverse range of licensing options, categorized primarily into capacity-based and individual user licenses.

1. Capacity Licenses -F SKUs (Dedicated capacity)

– Known as Premium licenses in Power BI.

– They provide the infrastructure for Microsoft Fabric. Without a capacity license, users can’t work in Fabric.  

– Capacity licenses are divided into Stock Keeping Units (SKUs) that deliver a set of Fabric resource levels. These levels are measured in Capacity Units (CU) which is a new concept used to measure the compute power available for each SKU.

– Each license offers double the computational power of its predecessor, for instance, F4 has twice the power of F2 and half the power of F8. 

– This license introduces a “pay as you go” model, it means:

      ✅ Users pay for their actual usage, there are no minimum terms, the SKUs are available on an hourly or monthly basis.

      ✅ Unlike Premium Capacity, Fabric Capacity can be paused, offering cost flexibility.

      ✅ Charges are incurred only when the capacity is actively used.

      ✅ Prices start at a competitive point of $8 per day, making it accessible for organizations.

 

Microsoft Fabric Pricing

Notes: 

  • Billing is per second with a one minute minimum.
  • SKUs that are smaller than F64 require a Pro or Premium Per User (PPU) license to consume Power BI content.

2. Individual licenses

– Free: This license allows users with access to Fabric Capacity to create and share content within Microsoft Fabric. It covers functionality such as pipelines, data warehousing, notebook usage and capacity management. However, sharing Power BI content requires a Pro license.

– Pro: Essential for sharing Power BI content with other users. Every organization intending to work with Power BI requires at least one Pro license. Thus, if you’re purchasing a Microsoft Fabric license, ensure you include at least one Pro license.

– Premium Per user (PPU): Operating on a shared capacity, this license grants limited access to Microsoft Fabric, and will continue to be suitable for organizations that want to leverage the premium features of Power BI without extending to any Fabric content. PPU can be more cost effective when Power BI Premium features are needed for less than 250 users.

In conclusion, the individual licenses work in Microsoft fabric only if they are combined with a Capacity License. Starting from the F64, you can share Power BI content with Free Licenses. For lower licenses, You will need Pro licenses.

 

Additional Licensing Points

– Power BI Embedded: also known as A SKUs, remains available for embedding purposes. However, it is important to note that Power BI Embedded does not provide access to the new Fabric workloads.

 – Microsoft Fabric trial: Include access to the Fabric product experiences and the resources to create and host Fabric items, the trial lasts for a period of 60 days, but may be extended by Microsoft discretion. It is crucial that users transition to a paid Fabric capacity after the trial in order to retain data and continue usage. Otherwise, non-Power BI Fabric items will be removed in accordance with the stipulated retention policy.

 

Variables to Consider for Cost Estimation

 

1. CAPACITY UNITS (CU): It’s the primary billing unit used in Microsoft Fabric, it combines CPU, Memory, Disk IO, Network bandwidth, and more. Each operation in Fabric consumes CUs, higher CUs equals higher performance.

 

2. NUMBER OF USERS THAT WILL SHARE AND CONSUME POWER BI CONTENTS: This is one of the variables that most impacts the price to be paid. The price of each license is $10 per user/month and $ 20 per user for Premium per user licenses (PPU).

Typically if you have more than 500 users (250 users in PPU license) consuming and sharing Power BI content, it is recommended to purchase an F64 license or higher.

 

3. INTENSIVE WORKLOADS THAT COULD OVERLOAD THE CAPACITY: If you have important capacity peaks you should consider scale your capacity, it means at any time, you can temporarily increase your capacity and reduce it again when you’re done. And since F-SKUs are billed on a usage basis and managed as an Azure resource, you only pay for the time you consume.

At the time of writing this article, auto-scaling is not currently available, but it is planned to be integrated in the future. So you will have to apply manual scaling in periods with intensive workloads.

Discover how to scale Fabric capacity: https://learn.microsoft.com/en-us/fabric/enterprise/scale-capacity

 

4. OPERATIONAL HOURS: Microsoft Fabric allows you to pause and resume the capacity when it is not operational, to save costs for your organization. Later, when you want to resume work on your capacity, you can reactivate it. 

So if your company isn’t doing anything with data or analytics during the weekend, you can just pause the capacity and save approximately 25% of the monthly license cost.

Learn more about how to pause and resume Fabric capacity: https://learn.microsoft.com/en-us/fabric/enterprise/pause-resume

This article explains how to automatically pause and resume Fabric capacity: https://github.com/nocsi-zz/fabric-capacity-management/

 

5. ONELAKE STORAGE: It is the data lake integrated into Microsoft Fabric that serves as a centralized repository for all of the organizational data and is billed on a pay-as-you-go rate. Microsoft Fabric storage is OneLake, this is the only place where all data is stored.

This cost is not included in the capacity licensing, so you will need to pay for it separately. Note that OneLake storage pricing follows the same pricing as Azure Data Lake Storage gen2:

Benefits of Fabric storage:

  • Efficiency: Streamlined purchasing with auto-provisioned storage for all tasks.
  • Cost-Effective: Unified data copies eliminate redundant data transfers and reduce duplication costs.
  • Integration: Seamlessly connect third-party storage systems to Microsoft Fabric analytics.
  • Accessibility: Open data formats facilitate access to multiple analytics engines, minimizing configuration resources.
  • Security: Centralized access to all data and governance tools ensures consistent security and simplifies maintenance.

 

6. BANDWIDTH: Bandwidth refers to the data moving in and out of Azure data centers and between Azure data centers. While it’s a crucial component, its cost impact is often minimal compared to Capacity Units (CU) consumption and Power BI licenses:

  • Data Transfer In: Free for data moving into Azure data centers.
  • Within an Availability Zone: Free
    Availability Zone is an isolated location within an Azure region, equipped with its own power, cooling, and networking to protect applications and data from data center failures. It ensures high availability and resilience by allowing resources to be distributed across multiple independent physical locations within a specific region.
  • Between Availability Zones: The price is around $0.01 per GB. So, even if a company transfers a substantial 500GB of data between zones in a month, the cost would be just $5.$0.01 per GB
  • Inter-Region Transfer: Ranges from $0.02 to $0.16 per GB
  • Inter-Continental Transfer: Ranges from $0.05 to $0.16 per GB. For a company transferring 1TB of data inter-continentally, the cost would range from $50 to $160.
  • Internet Egress: First 100GB/month free; subsequent costs vary by region.

 

Learn more at Bandwidth pricing:  https://azure.microsoft.com/en-us/pricing/details/bandwidth/

 

7. SMOOTHING: This mechanism distributes CU consumption over time, allowing users to run more workloads in the same capacity without restrictions and helping them avoid being penalized with additional costs. 

It means that you only pay for the average rather than the peak performance, averaging capacity usage over short periods of time for interactive operations and over a 24-hour period for background operations.

Learn more about this feature: https://learn.microsoft.com/en-us/power-bi/enterprise/service-premium-smoothing

 

Power BI Licensing vs Fabric

You have probably noticed that the prices of the Fabric capacities are higher than those of the equivalent Power BI Premium capacities. 

A P1 Power BI Premium capacity provides the same power as an F64 Fabric capacity, a P2 Power BI Premium capacity provides the power of an F128 Fabric capacity, and so on. However, if you compare the Fabric F64 with the Premium P1 plan, you will see that the annual cost of F64 amounts to $100,000, compared to $60,000 for P1. The reasons for these differences are as follows:

✅ Pay-as-you-go basis: Users can pause and restart the service, scale them up and down dynamically with no usage commitment , optimizing resource utilization and ensuring cost-effectiveness.

✅ Contractual Commitment: Fabric’s F64 plan provides flexibility with no mandatory minimum contract duration while in Power BI premium there is a monthly/annual contract.

✅ Service Scope: The F64 plan grants comprehensive access to all Fabric workloads. In contrast, the P1 plan is tailored specifically for Power BI items.

✅ Storage: Power BI premium licenses offer a certain amount of dedicated storage for Power BI items while in Fabric it is calculated based on the amount of data stored within OneLake.

In a few months, Microsoft will introduce an Azure Reservation commitment model for Fabric Capacities  – RI SKUs, which will make their price comparable to the equivalent Power BI Premium capacities.

 

Example Cost Estimation – Choosing the Right Scenario

Understanding the costs associated with Microsoft Fabric is crucial for effective budgeting. Below, we will show different hypothetical scenarios for helping you to understand how you can estimate the licensing more fit for your organization.

However it is very important monitoring your Microsoft Fabric Capacity Metrics to understand better your spending across workloads and optimize your capacity usage. 

Scenario 1) Small Business with moderate workloads

  • Number of users that will consume Power BI content: 25 users
  • Operational hours: 8 hours/day (pauses capacity during off-hours and weekends)
  • Workload: Moderate 
  • Storage: 100GB on OneLake

Recommended License: F2 SKU 

Cost Calculations:

Scenario 2) Small business with 50 users that wants to use premium features in Power BI

  • Number of users: 50 users
  • Operational hours: 8 hours/day (pauses capacity during off-hours and weekends)
  • Workload: Moderate 
  • Storage: 100GB on OneLake

Recommended License: F2 SKU 

Cost Calculations:

Scenario 3) Medium Organization with 250 users and high-demand periods

  • Number of users: 250
  • Operational hours: 10 hours/day, 6 days a week (Monday to Saturday)
  • Workload: They have peak intensive data processing, especially during specific projects or when handling large datasets (20 hours approx.)
  • Storage: 1TB on OneLake

 

Recommended License: Starts with F2 SKU, but scales up to F8 during high-demand periods.

Cost Calculations:

Scenario 4) Large Corporation with Month-End Reporting Peaks

  • Number of users: 600
  • Operational hours: 10 hours/day, 7 days a week
  • Workload: Regular operations with an F64 SKU, but scales up to F128 during month-end reporting (30 hours approx.)
  • Storage: 1TB on OneLake
  • Bandwidth: Inter-region transfer within North America of 1TB.

 

Recommended License: Starts with F64 SKU, but scales up to F128 during high-demand periods.

 

Cost Calculations:

Scenario 5) Global Financial Institution with Real-Time Analytics

  • Number of users: 1,000
  • Operational hours: 24/7 (Always on)
  • Workload: Highly intensive due to real-time financial analytics. They start with the F128 SKU but scale up during peak market hours (50 hours approx.)
  • Storage: 6TB on OneLake
  • Bandwidth: 10TB inter-continental data transfer from North America to other continents.

Recommended License: Starts with F128 SKU, but scales up during high-demand periods.

Cost Calculations:

Navigating through Microsoft Fabric’s licensing and cost estimation can be a challenge, but understanding these key variables and scenarios can help you make informed decisions. Whether you’re a small business or a global corporation, Microsoft Fabric offers flexible options that cater to your specific needs.

As you explore the world of Fabric, remember to monitor your capacity metrics using the Microsoft Fabric Capacity Metrics app. In the next article of this series, we will go deeper into this app, which will be your great ally to help you optimize your consumption and manage your capacity effectively.

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