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Are you still using Power BI Capacity SKU? Understanding Power BI SKU, Capacity, and Pricing Updates

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Check your SKU - You may only have 90-days to act.

Microsoft has recently announced major updates to Power BI SKUs, Power BI capacity, and Power BI pricing. With Power BI Premium capacity SKUs retiring in 2025, organisations need to review their licensing and transition plans to ensure cost-effective scalability.

But what do these updates mean in practice? And how should businesses adapt to get the most value from their Power BI investment?

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A Closer Look at the New Power BI SKU Model

Power BI SKUs (stock-keeping units) define the performance and scale your organization can expect from the service. Previously, customers faced challenges aligning capacity and cost as demand grew.

With the updated SKU model, Microsoft is streamlining the way capacity is provisioned. This is a positive move for businesses already running Power BI Premium as it gives clearer options when deciding between per user and per capacity models.

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What’s Changing with Power BI Capacity

Power BI capacity is at the heart of these updates. Capacity essentially determines the computing resources available, and therefore the performance of reports and dashboards.

Key updates include:

  • Simplified tiers: Microsoft is narrowing down SKU options, making it easier to choose the right capacity size.
  • Improved flexibility: Organizations can scale capacity more dynamically, ensuring cost and usage are better aligned.
  • Performance consistency: Dedicated capacity will now have more clearly defined performance boundaries, helping IT teams plan workloads more effectively.

These changes are especially important for enterprises where consistent performance and large dataset handling are critical.

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Impact on Power BI Pricing

Naturally, the changes to SKU and capacity also affect Power BI pricing. While some organizations may see a cost increase depending on their existing setup, others will benefit from more predictable pricing aligned to their actual needs.

Pricing shifts reflect Microsoft’s push to balance enterprise-grade capabilities with affordable entry points for smaller businesses. The move should result in fewer unexpected cost jumps for organizations scaling their analytics footprint.

Jim Manis, Vice President of Product Management at Microsoft, has provided some succinct information on this change and what the impact means:

“…with reservation SKUs now available for Microsoft Fabric, we are announcing the end of life for the Power BI Premium capacity SKUs. Depending on your existing agreement, the retirement will impact you differently:

  • New customers will not be able to purchase Power BI Premium per capacity after July 1, 2024.
  • Existing customers without an Enterprise Agreement (EA) will be able to renew their Power BI Premium capacity subscriptions until February 1, 2025. Customers who have a renewal date after February 1, 2025 will need to replace their Power BI Premium capacity subscription purchase with the purchase of Fabric capacity at the end of their agreement.
  • Customers with an existing EA agreement can continue to renew their Power BI Premium capacity purchase annually until the end of their EA agreement. If the end of the existing EA agreement is after February 1st, 2025, they will have to transition to Fabric capacity once the agreement has ended to continue using Microsoft Fabric.
  • Customers on a sovereign cloud will not be impacted by this retirement as they do not currently have access to Microsoft Fabric. We will provide additional information as soon as it’s available.

All existing customers will be able to purchase more Power BI Premium capacity on their current agreement until its end date.”

Microsoft's update is available here.

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Practical Considerations for Businesses

If your business is currently licensed under existing Power BI SKUs, now is the time to:

  • Review your capacity usage – Identify whether your workload justifies dedicated capacity or if per-user licensing is sufficient.
  • Model the new pricing – Assess what the updated Power BI pricing structure means compared to your current costs.
  • Plan for scalability – Ensure future requirements (such as AI workloads or larger datasets) are factored into your SKU choice.

IT and BI leaders should see this as an opportunity to re-align Power BI deployments with both performance goals and budget constraints.

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Conclusion

The recent updates to Power BI SKUs, capacity models, and pricing are part of Microsoft’s effort to simplify licensing while providing more flexibility. Although adjustments may take time to fully absorb, the changes are designed to give businesses a clearer path toward scaling Power BI effectively.

For organizations already invested in Power BI Premium or considering a move from Pro licensing, the key takeaway is simple: revisit your current SKU and pricing plan, and ensure it still aligns with both your technical needs and cost expectations.

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At Ultima, we’ve been proactively working with our existing customer base that this impacts, but also providing them with Microsoft Fabric proof-of-concept solutions due to them being given access to an entire and modern data platform solution through this change. This has seen significant benefits of adoption and acceleration of data & AI capabilities to these businesses by working with our experts. In short – you’ve got it, so why not use it? And we can get you there at pace with our experience and guidance.

If you’ve got any questions about this retirement, smoothing the migration, or how to accelerate your data platform requirements, reach out today to our team today to see how we can help.

Marketing Team

Marketing Team