Power BI Free is the Main Problem Here

I am an enthusiastic sponsor of Microsoft BI. I have been fortunate enough to build a new career off the back of the great products Microsoft has developed, specifically Power BI, Power Pivot and Power Query.  Having said that, I am definitely disappointed with the new licensing agreement changes have been released in the last week.  Read on to find out why I believe Power BI Free has been a significant contributor to the problem we face today.

Firstly let me reflect on what Microsoft has done well.  I think there is no doubt that there is now an affordable scalable offering for large corporates wanting to use Power BI.  There is still a bit of work to be done to iron out the communication messages and licensing conflicts between the need for a Power BI Pro Licence to author to the Power BI Premium Server, however these are relatively small teething problems that can be easily sorted out.

There are 2 issues however that I am definitely not happy about.   Firstly is a lack of a suitable pricing model for small to medium sized enterprises (SMEs), and secondly is the decision to prevent free and premium users from using “Export to Excel”.

Affordable Pricing for SMEs

Stated simply, Microsoft has not catered for the affordability needs of SMEs that use BI to drive their business.  Let’s face it, which company doesn’t need data and information to drive its business? Maybe in the past, BI solutions were only affordable for large corporations, but the expectation has now changed largely thanks to the software that Microsoft has developed.  It’s too late to turn back on this now, the cat is out of the bag. Small to medium sized companies now expect that they can access affordable BI solutions to meet their business analytical needs.

I think the existence of the Power BI Free product has been the root of the problem here.  The fact that you could do so much for free (including some sharing) really muddied the waters and has taken the focus away from acknowledging that there needs to be a two tier pricing model for users (free is not a pricing tier). Microsoft is addressing one part of the problem by making it clear that Power BI Free is for personal (non sharing) use. However it has not addressed the second part of the problem being the need for a lower priced offering for users that just consume data in a way I would describe as “low involvement”. Microsoft has taken away the “proxy for a low priced sharing tier” without providing a genuine low priced replacement – this had just made the situation worse, not better and it has upset a lot of people.  Power BI Free has been a great product to “try before you buy” but unfortunately its existence prevented Microsoft from realising it was missing a price tier for 2 years!  Power BI Free for personal use (no sharing) is an incredibly generous offering from Microsoft.  It is a shame that it will need a backlash to fill the real gap – a lower priced tier.

I truly believe that most companies are willing to pay a fair price for the value they extract from software.  But $120 per year for a user that looks at some numbers once per week is hardly fair value.  It actually doesn’t matter what size company you are, the value proposition just doesn’t stack up for this type of user because it doesn’t scale.  A small company with 300 of these users will pay $36,000 per year for people to read reports ($360,000 over 10 years).  There is a pretty big incentive here to find another solution, and I could write an Excel based tool to email PDF reports for a fraction of this (one off cost)

In my view, the pricing for low involvement users needs to be around $2.00 to $2.50 per user per month.  And I am not saying that the pricing model has to be per user per month.  There are many other pricing models out there including “capacity” and “concurrent users” to name a few.  Microsoft has addressed the need for a lower tier pricing model (including sharing) for large corporate via Power BI Premium, (capacity model) but the minimum price of $60,000 per year makes it prohibitive for SMEs. What Microsoft needs to do now is deliver a viable lower price sharing pricing model that works for SMEs.

Export to Excel – NOT!

powerI couldn’t sleep the night I heard this news.  Microsoft will soon be the only BI vendor in the world that does not have an “export to Excel” button in its BI software (specifically Power BI Free and Premium).  The crazy thing is that Export to Excel is hardly “way too much value for the price you pay”, so it is not like there is any real reason to prevent this.

I’m sorry, this is completely unacceptable that any vendor would allow you to load your data into their system, see a summarised chart on the screen, and then prevent you from extracting the summarised data to Excel.  I totally get that free users and premium users should not be able to use Analyze in Excel.  Analyze in Excel is a very powerful offering that leverages a cloud-based reporting server and I don’t think Analyze in Excel should be made available to the low-priced users.  But export to Excel is not Analyze in Excel.  Extracting your own data is a fundamental right.  In my view, this is a mistake and the decision needs to be reversed.

Where to Now?

Unlike what you may think by this point in my post, I actually believe that Microsoft is trying to do the right thing here, and is trying to improve the offering to the market.  But like many big corporate companies, I just think it failed to get it right this time.  The good news is the world hasn’t come to an end, and Microsoft has an opportunity to reflect and improve on the decisions announced last week.

I encourage you all to share you views and opinions on this too (either in the comments here or in the Power BI forum), as it is strength in numbers that will get the most attention.

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Comments

  1. Fully agree Matt. There is huge interest and a wiilingness to pay in this market but the pro licence for an occasional viewer is a non starter with many companies.

  2. Get a grip, all other BI products cost 200-400 per user so powerBI is still cheap even for the casual user

    • Hey Bob. I understand the relativity point you are making, but SMEs can’t afford $400 per user or $120 per user for such a low benefit distribution. A Ferrari is expensive, but that doesn’t make a Porsche cheap by definition. A Porsche is still expensive

      • PowerBI is literally the cheapest Enterprise solution hands down. Nothing comes close. It will kill Tableau who is currently looking for a buyer. I guess that’s what Microsoft intended with the new pricing. The problem is that BI architects of small to mid sized companies are looking like idiots because they have to tell their bosses that a $2000 p/yr BI system will now cost $20k.

        Microsoft should have given existing users a loyalty benefit. We have, after all, been the ones that have changed the BI landscape with Power Bi.

        Plus, Microsoft needs to understand that the majority of adopters have been non-corporate users. These are the people or should I say ‘children’ who, over time, will be the ones who will eventually be making their way into large companies and pushing for Microsoft BI solutions.

  3. This will definitely be a barrier to entry for SME’s. In my opinion Power BI is nice, but doesn’t add $59,750 worth of value per year over and above what Power Pivot offers.

  4. Oh, that T-shirt is just awesome. Where can I buy it?

    You nailed it with this line:
    Microsoft has taken away the “proxy for a low priced sharing tier” without providing a genuine low priced replacement – this had just made the situation worse, not better and it has upset a lot of people.

    In regards to leaving comments for Microsoft at the PowerBI forum: Just because you leave them doesn’t mean Microsoft will publish them. It looks to me that the more honest/unflattering the feedback, the slower the moderation. I suspect that many comments in fact will remain in moderation indefinitely: I left a comment over three days ago at https://community.powerbi.com/t5/Changes-to-the-free-Power-BI/May-3-announcement-FAQ/td-p/167399 that is still sitting in the moderation queue. And I know of other users who have experienced the same thing, to the point that forum users have opened other threads to openly discuss this licencing change without MS being tardy to moderate comments that are *ahem* inconvenient.

    MS seem to have moved some comments to a new thread altogether. And it seems to me that the ones they have moved are definitely in the ‘less-than-flattering’ category.

    I don’t buy the response from MS on this that they moved the threads “to a dedicated board so that all of the questions about the changes were together in one place for easy reference”. Because they were in the one place for easy reference.
    Here’s the original thread started by MS:
    https://community.powerbi.com/t5/Changes-to-the-free-Power-BI/May-3-announcement-FAQ/td-p/167399

    Here’s a thread where some of the comments have been moved to:
    http://community.powerbi.com/t5/Moderated-Discussions/Re-May-3-announcement-FAQ/td-p/168903

    And here’s a couple more threads where tardy moderation doesn’t seem to be a problem. Good reading there:
    http://community.powerbi.com/t5/Moderated-Discussions/Provide-your-inputs-on-Power-BI-Enterprise-Premium-cost-part/td-p/171168
    http://community.powerbi.com/t5/Moderated-Discussions/Power-BI-Embedded-vs-Premium-Clarifications/td-p/169351

    https://community.powerbi.com/t5/Service/Censorship-by-Microsoft-quot-Changes-to-Power-BI-Free-are-coming/td-p/170238/highlight/true

  5. I agree there should be a cheaper way to get a “reader” license for SMB. Maybe charge by usage instead of number of users. Almost like the Old Power BI embedded model. Or maybe add the cost to Pro license for tiers of users shared with, 0-10, 10-100, etc.

  6. I’ll not even put my hands on PowerBI in the first place if they didn’t allow me to collaborate on the free version. And I will not be able to evangelize use of it in office. But now I can’t tell to my fellow workers to try it because they will not be able to share anything they do to their colleagues or manager.

    • Well they can still build quality reports in Power BI Desktop and share them for free with other Power BI Desktop Users. They can also publish to the Cloud and demonstrate the features (like Q&A) via a browser without sharing of course. Or they can invest $10 per month per user for a few months to demonstrate the value. If they did this with a group of 4 users over 3 months, it would cost $120. It still looks pretty good value to me for this. In my article last week I said that I personally had no problems with very small groups of users because it is very affordable. It is only when you try to scale to large numbers of casual users that the price/value proposition falls away. If you have 400 users that just need to see some static numbers, that would cost $48,000 per year. I can build you a pretty nice VBA automated email system for a lot less than that.

  7. Yes. They have not visualized the needs of SMEs at all. Moreover, even if SMEs afford some of the Pro licenses they have to still struggle with missing features like Incremental Refresh etc. which are very critical for those Medium sized organisations who are in Consumer Goods space and have big datasets to cope with. As of now it seems these features are exclusively for PBI Premium and not even for PBI Pro license holders. Therefore, MS has released entire offering to only big Conglomerate who can afford $60k/Yr per node and increase MS profitability extensively. With the current licensing model, there is no business case as of now for any SME. Really disappointed!!!

  8. Hi Matt, i’m very worried about the export to Excel end. I built an Access mdb that imports the Excel data extracted from our powerbi, with vba do some tranformations, and print a report like a basic “nprinting” function in order have on paper, for example, data for example lists of the customers with sales variations. For time ago i’ve bet for bi Microsoft products instead of the expensiver “Ferrari” qlik products now, finishing export to xls , would dramaticaly injure this decision

  9. If Microsoft want to prise their foot in the door of organisations who have already invested heavily in strategic BI but it has not borne the fruit, they are going to need to unshackle content creators like myself to share their content so the chatter can be generated

    I came out of a meeting yesterday where I sadly needed to tell them that they can share the dashboards between themselves but not recipients without them getting Pro, we would need to still have content distributed via Excel. Ridiculous

    Matt, I wondered if you had come across this major irritation: people within IT who sneer at Power BI as still being left field and “unsupported”. There are many who still don’t get the transformative revolution going on here: business led BI rather than IT led and at times it boils my piss

  10. Hi Matt again, i think that i “put the strip before the wound”, i’ve upgrade to the may desktop new version and i still can download info to csv from desktop or to xls in cloud version, are this options that would finishsoon? or you talked about exporting to excel all the report from the online version?

  11. They miss lots of opportunities. They didn’t even have an option to publish to docs.com their own publishing platform. How did they miss that?
    I raised the idea, but really shouldn’t have to.

    They created the powerpivot headache being unavailable in most licensed versions when it should have been in all. So this step doesn’t shock me.

  12. Hi Matt, thoughtful article (as always). The issue around Small & Medium sized Enterprises (SMEs) is not just with the scalable costs of Power BI Pro but also with the entry level developer cost of Premium (around GBP38,000 / USD60,000 per annum). Smaller developers won’t take the risk of developing product with that level of entry cost.
    It seems like Microsoft are only listening to large companies as the licensing changes only benefit them, at the expense of the small and medium sized guys. I think that is a mistake – SMEs sometimes grow into big guys – but they stick to the software they have had success with. Will that be Power BI or one of their competitors? Someone will grab that opportunity soon.

  13. Hi Matt, I totally agree with you that this is a very unfortunate move by Microsoft. Especially regarding the Excel Export/Connection. If there is one thing that Microsoft should beat all other BI vendors at it is the integration with Excel. The Analyze in Excel feature is a very powerful tool, so I don’t understand why free users shouldn’t use it to connect to a report hosted in a premium capacity. The client is paying for the capacity as well as Microsoft Excel. Now it is is actually much more comparable to the cost of Tableau which frankly is probably still a more advanced product and of course has an export to excel function.

    I think the solution to this problem is to build a Desktop Reader (Similar to Tableau Reader) that has only the option to view reports or for Excel to connect to it to answer quick questions.

    Microsoft should leverage the common use of Excel across the world and be honest to themselves that Excel is and will be the go-to tool to answer quick questions. If there is a solid integration between Power BI and Excel then no other BI vendor would be able to seriously compete. The Analyze in excel is not a common use case but having the option convinces so many people, because there is no hurdle anymore between the BI system and the Excel tools we built. Power BI Pro would still be required to collaborate (within Power BI) and to create reports, apps, and everything else.

    Sorry for rambling a bit, but this is really frustrating to see that Microsoft had such a chance to roll up the industry but instead chose to build a closed garden.

  14. This whole things sounds like someone at MS looked at the usage and figured “…look new revenue stream”, as you mention they then went and forgot about the SME, and the people that are out there “evangelizing” the product to clients.
    Agree with you that they REALLY need to get a SKU for “consumer” of data / casual user who will go in once a day to check on the dashboard and then off to other things.
    Who knows if there is enough “noise” they may bring in a lower priced offering targeting SME / SMB.

    • Power BI Reader within Pro Office has to be the way forward now and would bridge MS Office to Power BI. What better way to have the ‘gateway’ to Power BI sat in the most ubiquitous productivity suite on the planet

        • Yes, of course, I completely understand. So in the same way folk need to pay for an elevated version of Office to get PowerPivot the same would apply here. The great thing is they listen to customer feedback so I’m optimistic that they are aware of a gaping hold that needs to be addressed

    • As I mentioned at the end of my post, I am actually optimistic. If this was a crap product, no one would care what MS did and we would all move on. It is however a good product and we want/need a fair way to pay for it.

  15. Very good post, and in full agreement (though I’d add Small to Medium Groups at large companies as well). Especially if there was some sort of model that meant we didn’t have to get customers set up with licenses and could just send them a link associated to their email, have us pay some nominal amount for their consumption, and be done with it. The more barriers between a built report and the people consuming it, the more likely someone is to demand “just email the whole thing to me”.

  16. Guys, this is a company that killed VB6 (the best programming language on the planet and replaced it with vb the dot net hell)
    It is also the same company that put Power Pivot in Excel 2010 as free to use in any version (Standard, Home and student, Professional and Professional Plus) and suddenly in Excel 2013 had second thoughts on the meaning of Bi for the ma$$es

    • I think it is pretty common place to make a new Addin that is being developed “free” during the development phase. It would be good if it was made clear upfront however that it is free during this phase and will be a paid for product once it reaches a stage of maturity.

  17. Hi Matt, I totally agree with you that this is a very unfortunate move by Microsoft. Especially regarding the Excel Export/Connection. If there is one thing that Microsoft should beat all other BI vendors at it is the integration with Excel. The Analyze in Excel feature is a very powerful tool, so I don’t understand why free users shouldn’t use it to connect to a report hosted in a premium capacity. The client is paying for the capacity as well as Microsoft Excel. Now it is is actually much more comparable to the cost of Tableau which frankly is probably still a more advanced product and of course has an export to excel function.

    I think the solution to this problem is to build a Desktop Reader (Similar to Tableau Reader) that has only the option to view reports or for Excel to connect to it to answer quick questions.

    Microsoft should leverage the common use of Excel across the world and be honest to themselves that Excel is and will be the go-to tool to answer quick questions. If there is a solid integration between Power BI and Excel then no other BI vendor would be able to seriously compete. The Analyze in excel is not a common use case but having the option convinces so many people, because there is no hurdle anymore between the BI system and the Excel tools we built. Power BI Pro would still be required to collaborate (within Power BI) and to create reports, apps, and everything else.

    Sorry for rambling a bit, but this is really frustrating to see that Microsoft had such a chance to roll up the industry but instead chose to build a closed garden.

    • I basically agree with you. The only thing I am not really sure about (in my own mind) is Analyze in Excel. I definitely don’t think this should come with free. As for report server, my mind is partially open. I am torn between MS needing to charge a fair price for its product compared to the need for customers to be able to choose they way it consumes. My issue is that Analyze in Excel is essentially a fully operational SSAS Tabular server hosted. This is a lot of value for my target price of $2.00 to $2.50 per user per month. So I am trying to be balanced here. In PowerBI.com, “readers” can change filters that are deployed in a report, but they can’t build new reports. Maybe something like that with Analyze in Excel would be a compromise. Eg they can interact with a Pivot table that has been built, but can’t access the Fields List. Just a thought.

      • Matt: But wouldn’t savvy and cost-conscious dashboard designers simply duplicate that PBI data model in Excel, so that ‘dumb’ users can interact with the file via slicers, and at the same time ‘smart’ users can essentially still do exactly what they can now under the ‘Analyze in Excel’ functionality. (Note: I haven’t used this functionality, so might not ‘get’ your comment above.)

        • My comments are based on principles of “fairness” and “what is the right thing to do”. Microsoft has introduced the much needed low cost tier, but has locked out SMEs from participating due to the high minimum cost. SMEs should have the right to access the low cost tier (fairness) but it should be “less for less” (also fairness). I don’t think people should expect to get the same benefits for a lower price. So then the question is “what should be taken away?”. I personally think Analyze in Excel is a fair “give away” from the customer’s perspective in trade off for the lower price.

  18. Yeah, I get that. But I’m effectively talking about the implications of this for customer “arbitrage” (i.e. taking advantage of differing prices for the same asset – in this case, that asset being company data) i.e. cannibalization. You could also call this the ‘waterbed’ effect: MS pushes down on users one part of their waterbed (the BI stack), and users are squeezed into the other parts of the stack (in this case, Excel/PowerPivot).

    You can see why this whole pricing thing is so hard for MS: PowerBI’s main competitor is probably not Tableau or Qlik, but rather the other place that you can find DAX and M, i.e. Excel. So sure, MS can remove “Analyze in Excel” from the free version of PowerBI, but users being users will arbritrage: they will say Well if I can’t “analyze” PBI freely across my user base in Excel, I’ll just build the damn thing IN Excel, because a) there is no incremental cost to me of doing that (other than the inconvenience of having multiple copies of the same model), and b) the outcome is exactly the same to the end user.

    These things in the MS BI stack are a connected market. If MS adjusts the price of one of their commodities, savvy cost-conscious customers don’t care about whether the value adjustment is fair or otherwise: they just see an alternative distribution channel at lower cost and think “well, what’s wrong with routing my data through that cheaper channel?”

    • That’s exactly what I told Microsoft. If SMEs have to pay US$30k – US$40k essentially for “readers”, then I can (and will) build a pretty tidy email PDF tool (you know the one I mean).

    • Jeff, I wish I could write like you do, that’s a perfect analysis, I tried to sell PowerBI when it was free to my manager, and his reply was, he don’t need it, and he is happy with the dashboard and PowerPivot in Excel 2013, nothing can beat the cost of Excel in a shared folder, and people are familiar already with it.

      so that’s an excellent Point the real competitor to PowerBI is Excel 2013 + not Tableau.

  19. Matt
    now we do have PowerBI on-premises, which is a great news, (as the cloud was a no-go for me anyway), the price is a little expensive, although it is less than the premium non-sense, the minimum will be something like 2 cores X 14000 $ plus 25 % SA assurance.

  20. I was on vacation and everything went fine until MS released news about Power BI Premium and end of Free-sharing era. It means for me that I stop evaluation period and stop showing beauty of Power BI to colleagues (had a dashboard for finance directors of several subsidiaries). But to be honest, everything was done with Excel+PowerPivot behind, published to SharePoint Online Team Site. So, I do not lose “Analyze in Excel” feature, but I can imagine the pain of those who seriously invested time into Power BI.
    I thought about Power BI: “This is that thing! The thing that will change some of our reports and make them more interactive and available on tablets / mobile”. But, seems, I stay with Excel models, PDF, PowerPoint, XL files generation etc.

    • Hi Ivan. Anyone that had an active account prior to 2 May can request a 1 year Pro license for free. But that may not work for your boss I guess. https://community.powerbi.com/t5/Changes-to-the-free-Power-BI/May-3-announcement-FAQ/td-p/167399

      As I have commented to some others, the licences are just $10 per user per month. Most companies can afford to spend $150 for a 5 user 3 month pilot to prove the concept. If not, then you can show your boss using your account, right? I think the issue is that Microsoft is taking something away that maybe it never should have offered, and it hasn’t replaced it with a complete package as yet

      • Hi Matt, price is absolutely affordable for our company. It is just difficult, if not to say impossible, to purchase license without green light from IT. As at the moment we have no strategy to go to Power BI, and I, as you said, can show demo solutions from my account. Although, such demos have not the same effect on colleagues if compare with situation when they did nothing, but under their own account they got access to dashboard and reports and can even consume it on tablet / mobile staying out of office.
        Another point is that vendor’s behavior matters. So good “free account” was a very nice hook from MS. I think, everyone wants something stable with clear strategy for next X years. Such sudden changes from MS frighten and creates doubts that product is mature enough. As a result some bosses will say something like “Let’s wait some more time, maybe 1 year more, to see where it goes. We can work with what we have.”

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