When building business solutions with Power Platform, one of the most important architectural decisions you’ll make is which backend to use for storing and managing your data. Two common options in the Microsoft ecosystem are Datavenrse and SharePoint Lists.
Both are powerful in their own right, but choosing the right one depends on your data requirements, licensing, scalability needs, and user access scenarios.
✅ Licensing and Prerequisites for Dataverse
If you’re planning to use Dataverse as your data backend (create, view, update, delete operations), here’s what you need to know:
🧾 License Requirements
| Scenario | Required License |
|---|---|
| Power Apps App Users | Power Apps per app or per user license |
| Basic M365/Teams Users | Limited usage with Dataverse for Teams only |
| External Users (B2B/Portals) | Azure AD B2B + Power Apps Portals license |
| Admins / Developers | Power Platform admin or maker role |
💡 Note: SharePoint Lists are included in Microsoft 365 plans and don’t require additional licensing, but Dataverse offers richer functionality at a cost.
🛠️ Getting Started with Dataverse
To set up Dataverse as your backend, follow these steps:
- Create a Power Platform environment from Power Platform Admin Center.
- Enable Dataverse (formerly Common Data Service) within that environment.
- Go to Power Apps, then:
- Create a new table (formerly entity)
- Define your columns (text, numbers, lookup, etc.)
- Add relationships, business rules, and calculated fields
- Set up security roles and table permissions to control CRUD access.
- Use Canvas Apps or Model-Driven Apps to connect your frontend to Dataverse.
- (Optional) Add Power Automate flows for triggers, notifications, or approvals.
🤔 When to Use Dataverse vs. SharePoint List
| Criteria | Dataverse | SharePoint List |
|---|---|---|
| Complex Relationships | Supports 1:N, N:N, lookups, calculated & rollups | Limited to lookup columns, no native relationships |
| Security | Fine-grained row and column-level security | List-level and item-level permissions |
| Data Modeling | Normalized structure, data types, business rules | Flat structure, basic columns |
| Scalability | Designed for larger, relational data | Best for light-to-medium complexity data |
| Performance | Faster with large datasets, server-side processing | Can slow down over 5,000 items without index tuning |
| User Interface | Easily used in Model-driven apps | Best used in SharePoint pages / Power Apps Canvas |
| API Access | Rich APIs, SDKs, OData, integration with Dynamics | REST API, CSOM, but not optimized for relational data |
| Cost | Requires Power Apps licensing | Included in most M365 plans |
| Audit and Logging | Built-in audit logs, rich metadata | Limited to version history and manual tracking |
💡 Real-Life Use Cases
| Scenario | Recommended Backend |
|---|---|
| HR employee profile management | Dataverse |
| Intranet request form with attachment | SharePoint List |
| Field data collection with offline support | Dataverse |
| Internal feedback form embedded in a SharePoint site | SharePoint List |
| CRM-like app with multiple tables and views | Dataverse |
🧠 Best Practices
For Dataverse
- Normalize your data using multiple related tables.
- Use custom security roles to limit access.
- Use model-driven apps if you want data-centric UIs.
- Leverage business rules, Power Automate, and plugins for logic and automation.
- Plan ahead for data storage limits – default per user is 250MB (expandable with add-ons).
For SharePoint
- Keep your lists under 5,000 items or index columns to avoid throttling.
- Use Power Apps Canvas to build UI over SharePoint Lists.
- Use lookup columns carefully – too many can cause performance hits.
- Great for lightweight use cases, forms, file attachments, or intranet data.
Hybrid Suggestion
You can use SharePoint for lightweight UI or intranet-facing features, and Dataverse for core structured data behind the scenes. For example:
- Store customer records in Dataverse
- Store document metadata or attachments in SharePoint
- Integrate them using Power Automate
Whether you choose Dataverse or SharePoint Lists depends on the complexity, scalability, and security needs of your app.
If you’re just getting started or need a simple form, SharePoint List might be perfect. But for enterprise-grade applications with sophisticated logic, Dataverse is the way to go — provided you’re ready to invest in the Power Platform licenses.
Choose wisely. And remember, Power Platform is flexible — you can mix and match based on what works best for each module of your solution.
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