Microsoft Fabric licensing determines how users in your organization create, share, and view analytics content. This guide explains the key components of Fabric licensing, how to purchase capacity, and how quotas affect your deployment.
Overview of Microsoft Fabric Licensing
Microsoft Fabric is built on three core concepts:
- Tenant – Your organization’s Microsoft Entra environment
- Capacity – Dedicated compute resources used to run Fabric workloads
- Workspaces – Collaboration environments where Fabric items are created and shared
Organizations combine these components with per-user licenses to enable analytics, reporting, and data engineering workloads
Core Components of a Fabric Deployment
Tenant
Microsoft Fabric runs inside a Microsoft Entra tenant.
A tenant represents your organization’s identity boundary and usually includes:
- A primary DNS domain
- Users and groups
- Security and compliance controls
Organizations may deploy Fabric in:
- One tenant for the entire company
- Multiple tenants for different regions, subsidiaries, or compliance needs
Each tenant can contain multiple Fabric capacities.
Capacity
A Fabric capacity is a pool of computing resources used to run Fabric workloads such as:
- Lakehouses
- Data warehouses
- Data pipelines
- Power BI reports
- Notebooks
Capacities are measured in Capacity Units (CUs) and are purchased as SKUs.
Example capacities include:
| SKU | Capacity Units |
|---|---|
| F2 | 2 |
| F8 | 8 |
| F32 | 32 |
| F64 | 64 |
| F128 | 128 |
| F1024 | 1024 |
Larger SKUs provide more compute power and allow more workloads to run simultaneously.
Important licensing note:
- F64 or larger capacities allow users with a Free license to view Power BI content.
Workspaces
Workspaces are containers where teams create and collaborate on Fabric content.
A workspace can store:
- Power BI reports
- Lakehouses
- Warehouses
- Pipelines
- Notebooks
- Dataflows
Each user automatically receives a personal workspace called My Workspace.
Organizations typically create additional workspaces for:
- Departments
- Projects
- Analytics teams
- Production environments
Workspaces can be assigned to a specific Fabric capacity to provide dedicated compute resources.
Fabric Capacity SKU Types
Microsoft Fabric supports two capacity models.
Azure SKUs (F Capacities)
Azure SKUs are the recommended purchasing model for Microsoft Fabric.
Key characteristics:
- Purchased through the Azure portal
- Pay-as-you-go pricing
- Billed per second
- No long-term commitment required
- Can be scaled up or down at any time
- Capacity can be paused to save costs
Additional Azure features include:
- Azure Cost Management
- Azure Monitor Metrics
- Capacity reservation discounts
Because of this flexibility, most organizations deploy Fabric using F capacities.
Microsoft 365 SKUs (Power BI Premium)
Some organizations may still use Power BI Premium (P SKUs).
Characteristics:
- Purchased via Microsoft Enterprise Agreements
- Billed monthly or yearly
- Originally designed for Power BI Premium
Microsoft is gradually consolidating licensing and recommends moving toward Fabric F capacities instead.
Per-User Licenses
In addition to capacity, users require a per-user license.
There are three main license types.
Free License
Automatically assigned when users first sign in to Fabric.
Capabilities include:
- Creating Fabric items (if workspace runs on F capacity)
- Sharing non-Power BI Fabric items
Limitations:
- Cannot collaborate on Power BI reports
- Cannot view Power BI content on small capacities (< F64)
Power BI Pro
The most common collaboration license.
Allows users to:
- Create Power BI reports
- Share dashboards
- Collaborate in workspaces
Pro licenses are required when:
- Sharing Power BI content
- Working in Pro workspaces
- Using capacities smaller than F64
Power BI Premium Per User (PPU)
PPU provides most Power BI Premium features per user instead of via capacity.
Features include:
- Advanced Power BI capabilities
- Larger semantic models
- Increased refresh limits
However, PPU does not provide Fabric capacity, meaning workloads like lakehouses or warehouses still require an F capacity.
Common Licensing Scenarios
Small Teams Using Power BI Premium
Recommended licensing:
- PPU licenses
Best suited for:
- Teams under ~250 users
- Power BI workloads only
Using Fabric Workloads (Lakehouse, Data Engineering)
Recommended licensing:
- Fabric F Capacity + Free or Pro users
This enables:
- Data engineering
- Data science
- Data warehousing
- Power BI reporting
Large Organization Viewing Power BI Reports
Recommended licensing:
- F64 or larger capacity
- Free licenses for viewers
This allows thousands of users to view reports without needing individual Pro licenses.
Buying a Microsoft Fabric Capacity
To purchase Fabric capacity in Azure:
- Sign in to the Azure Portal
- Search for Microsoft Fabric
- Select Create Fabric Capacity
- Configure the following:
- Subscription
- Resource group
- Capacity name
- Region
- SKU size
- Assign a Fabric Capacity Administrator
- Review and create the capacity
Once created, you can assign workspaces to the capacity.
Fabric Capacity Quotas
Azure subscriptions include capacity quotas, which define the maximum Fabric compute resources available.
Important notes:
- Quotas define the maximum allowed capacity
- You are only billed for active capacities
- Quotas vary by Azure subscription type
Viewing Your Fabric Quota
To view quotas:
- Open the Azure Portal
- Search for Quotas
- Select Microsoft Fabric
- Filter by:
- Subscription
- Region
- Provider
Requesting a Quota Increase
If your organization requires more capacity:
- Go to Quotas in the Azure portal
- Select New Quota Request
- Choose:
- Enter a new limit
- Adjust usage percentage
- Submit the request
Quota increases are usually processed automatically within minutes.
If a request is rejected, you can submit a support ticket for review.
Key Takeaways
- Microsoft Fabric uses a capacity-based licensing model
- Compute resources are purchased as F SKUs in Azure
- Users require Free, Pro, or PPU licenses
- F64 or larger capacities allow free report viewing
- Workspaces store and organize Fabric workloads
- Quotas control how much Fabric capacity your subscription can create
