The 2026 capacity model — what changed, and what happens…

The 2026 capacity model — what changed, and what happens on overage?

One thing changed and it is easy to state: Dataverse storage and Operations storage became a single pooled entitlement. What happens when you exceed it is harder, because Dynamics 365 does not have an overage behaviour. The four that decide a mid-market ERP budget run on four meters, in four separate Microsoft documentation sets — and the Licensing Guide documents others alongside them, including Operations – Order Lines, where exceeding the allowance produces warnings rather than a block.

What actually changed, dated

Microsoft's change log entry reads "Dataverse and Operations capacity increases and consolidation", dated December 2025 (Dynamics 365 Licensing Guide, Appendix K, August 2026 edition, checked 31 July 2026). The row below records "Dynamics 365 Premium licenses: Copilot Credits entitlement included", November 2025 — a second commercial change the same quarter, on a different meter.

Consolidation is the half that changes planning. Microsoft's announcement puts it as storage functioning "as one combined entitlement that can be used for either Dataverse or ERP" (Flexible Dataverse capacity, 4 December 2025). The admin documentation states the mechanism more usefully:

"Although displayed separately in the admin center, Dataverse and Operations database capacity form

a single combined pool for enforcement purposes. Similarly, Dataverse and Operations file capacity

are pooled together… Log entitlement is tracked separately for Dataverse only."

Source: Dataverse capacity-based storage details — ms.date 30 June 2026, updated 31 July 2026, read 31 July 2026.

Read the exception. Database and file pool; log does not. The worked scenarios make the asymmetry explicit: excess database covers a log or file deficit, excess log covers file, and "File storage excess entitlement can't be used to compensate deficits in log or database storage."

The entitlements as published today

**Dataverse or Operations Database** — Finance / Supply Chain Management: 90 GB · Finance Premium / SCM Premium: 125 GB
**Database accrued per user subscription licence** — Finance / Supply Chain Management: 5 GB · Finance Premium / SCM Premium: 10 GB
**Dataverse or Operations File** — Finance / Supply Chain Management: 80 GB · Finance Premium / SCM Premium: 110 GB
**File accrued per user subscription licence** — Finance / Supply Chain Management: 5 GB · Finance Premium / SCM Premium: 10 GB
**Dataverse Log** — Finance / Supply Chain Management: 2 GB · Finance Premium / SCM Premium: 3 GB
**Environments** — Finance / Supply Chain Management: 1 production (AOS) / 1 Sandbox Tier 2 · Finance Premium / SCM Premium: 1 production (AOS) / 1 Sandbox Tier 2

Source: Licensing Guide, pages 37, 57 and 63, checked 31 July 2026. Two rules govern how they add up: "Default capacity is not cumulative, so additional licenses (either base or attach) do not increase your initial default per tenant capacity," and "Attach licenses do not include additional capacity entitlements (except for Customer Insights, which includes the same default capacity entitlements as the base license)."

So the base-plus-attach shape from the licensing article has a capacity consequence: moving a user from a second base licence to an attach licence saves the licence fee and costs that user's accrued gigabytes. Usually still the right trade — but a decision, not a surprise.

One live inconsistency, and it is the figure people quote. The finance and operations storage capacity page still explains the accrual as "a change in December 2023, where the Operations Database Capacity (Accrued/USL) was increased from 1.5 GB to 4 GB" (Microsoft Learn, ms.date 23 January 2026) — while carrying a banner reading "Modern storage entitlements are rolling out." The guide shows 5 GB and 10 GB. Model from the guide.

Note the scope too: Operations database capacity is "inclusive of all storage in Production, Nonproduction, Reporting, and Entity Store databases." Your sandboxes are in the number.

Overage regime one: storage

Nothing dramatic happens to the running service. Microsoft says so in identical words on Dataverse capacity-based storage overview and Finance and operations storage capacity, both read 31 July 2026: "Currently, exceeding storage entitlements doesn't affect the availability of the service. Data stored in the service remains durable even if you go over your storage limit."

What happens instead is a staged notification, then a set of blocked administrative operations.

**First warning* — Trigger, as Microsoft states it: a capacity has "less than 15 percent of space available" · Effect: Notification. Microsoft describes a banner in the admin center, Power Apps, Power Automate, Power Pages and Dynamics 365 apps — but states it appears in "Dataverse only tenants"*
**Second warning* — Trigger, as Microsoft states it: "less than 5 percent of space available" ([capacity-storage](https://learn.microsoft.com/en-us/power-platform/admin/capacity-storage)) · Effect: Warning "that admin operations could be impacted"*
**In overage* — Trigger, as Microsoft states it: "storage usage exceeds capacity entitlements" · Effect: The operations below stop "until the overage is resolved"*

The blocked set is lifecycle rather than business operations: "Create a new environment", "Copy an environment", "Restore an environment", "Convert a trial environment to paid", "Recover an environment", "Add Dataverse database to an environment". Notifications go "on a weekly basis" to tenant, Power Platform and Dynamics 365 admins, with "no option for a customer to opt out", and "Trial, preview, support, and developer environments don't count" toward consumption (capacity-storage).

Then the contractual edge, which is the part for a CFO. "If your storage consumption exceeds the documented entitlements or usage limits, Microsoft might suspend use of the online service. Microsoft provides reasonable notice before suspending your online service." A soft limit with a hard backstop. A retention strategy resting on the observation that nobody enforces it is a governance decision, not the absence of one.

Preallocated environments behave differently again. Microsoft's FAQ: "Currently, only soft enforcement through email notification is turned on. Power Platform admins and environment admins start receiving notifications when capacity usage exceeds 85 percent of the allocated capacity." (capacity-storage, FAQ) Read the first word. That is a description of today, not a permanent design.

Overage regime two: Business Central, which is not the same product

Business Central has its own capacity model, admin centre and overage behaviour, on a page most finance-and-operations people never open. That is the cluster's thesis arriving as a bill.

"By default, Business Central customers can use up to 80 GB plus an allowance per licensed

Essentials or Premium user of database storage capacity… If a tenant exceeds this limit, Microsoft

restricts administrative actions that create additional environments. Exceeding the storage limit

will not interrupt transaction processing within the existing environments."

Microsoft adds that "You aren't automatically charged for the extra storage" (Managing Capacity, Business Central, ms.date 12 November 2025, updated 15 April 2026). The environment entitlement differs too: one production and three sandbox environments "at no extra charge", each extra production environment adding "three more sandbox environments" and 4 GB tenant-wide.

And the two Microsoft artefacts disagree on the per-user allowance. That page lists extra storage per licence as Premium 3 GB, Essential 2 GB, Device 1 GB. The August 2026 Licensing Guide gives Essentials 3 GB, Premium 5 GB, and 1.5 GB per Business Central Device. The guide's change log carries the reason — "Pricing and capacity increase for Business Central Essentials, Premium and Device", November 2025. Both quoted as they stand. Use the guide, and expect a reseller to quote the other.

Overage regime three: Copilot Credits

The agent meter enforces hardest, and it is the one with an explicit threshold.

Microsoft states the trigger under the heading Usage threshold: enforcement fires when a tenant reaches a quarter above its prepaid capacity — the page gives the figure in percentage form, which is reproduced exactly in this article's fact-check block. What happens then is quoted in full:

"Custom agents are disabled. Disabling an agent doesn't interrupt an ongoing conversation. All

subsequent attempts to invoke the agent are rejected until capacity is increased or reset."

Notification is an email "to the tenant's designated administrator" plus a post in the Power Platform admin center; end users see "There is a billing issue." or "This agent is currently unavailable. It has reached its usage limit."

Agent flows behave differently, and that belongs in a design review. Microsoft: "When a tenant's prepaid Copilot Studio capacity is fully consumed, new agent flow runs are blocked… agent flow enforcement targets flow execution only. The parent agent continues to function normally for all non-flow interactions." Note the trigger moves: full consumption, not the quarter above it. In-progress runs "complete normally"; enforcement "resets monthly when prepaid Copilot Credits are renewed." Exemptions are named for Microsoft 365 Copilot licensed users and for test runs, and a third appears in the worked example: an environment on a pay-as-you-go meter "isn't impacted" in tenant overage, because it bills to Azure instead (Billing rates and management, ms.date 11 June 2026).

The Licensing Guide adds the line that decides the buy: "Capacity is enforced monthly, and unused Copilot Credits do not carry over month to month." Under-buying costs an outage; over-buying costs the difference every month.

Overage regime four: platform requests

The meter with no gigabytes and no credits, and the one least often in a business case. Each Dynamics 365 enterprise application licence carries 40,000 Power Platform requests per paid licence per 24 hours; Dynamics 365 Team Member carries 6,000. Non-licensed identities — application users, non-interactive users, the SYSTEM user, which is to say your integrations — draw on a separate tenant pool of 500,000 base requests plus 5,000 per user subscription licence, to a 10,000,000 maximum.

The base-and-attach rule reappears: "Power Platform Request limits are only included with paid base licenses in the Dynamics 365 base + attach licensing model. Attach licenses don't include separate limits."

Microsoft also states that every organisation is currently inside a transition period in which more generous limits apply at the cloud-flow level rather than the user level. Enforcement is the loosest of the four: "Any possible high usage enforcement won't happen until six months after Power Platform Request usage reporting is generally available," and that reporting is still [PP] public preview, limited to Power Automate requests. When it bites, "you might see throttling." The remedy is an add-on that "raises the request limit by another 50,000 per 24 hours" — though "Currently, you can't assign capacity add-ons to users." (Requests limits and allocations, ms.date 30 March 2026.)

The controls you can pull

Microsoft documents several, on more than one page. These are the ones a CIO should know exist:

**Capacity extension* — What it does, in Microsoft's words: Requestable once overall consumption passes eighty percent; gives "45 days to reduce capacity usage and purchase more capacity"* · Where: Licensing → Dataverse
**Per-environment allocation* — What it does, in Microsoft's words: Preallocate capacity, and opt in to "daily email alerts sent to tenant and environment admins"* · Where: Licensing → Dataverse → Manage capacity
**Pay-as-you-go link* — What it does, in Microsoft's words: "any overage is charged to the associated Azure subscription"* · Where: Manage capacity pane
**Transaction-less copy* — What it does, in Microsoft's words: Copy a sandbox without transactional data, to "drastically reduce sandbox storage consumption"* · Where: Power Platform admin center
**Per-agent monthly limits* — What it does, in Microsoft's words: "cap credit usage before enforcement is triggered"* · Where: Licensing → Copilot Studio → Manage Agents
**Dataverse storage advisor [PP]** — What it does, in Microsoft's words: Table-level cleanup recommendations routed to long-term retention · Where: Licensing → Dataverse capacity view

Sources: capacity-storage, whats-new-storage, Copilot Studio billing and the unified admin overview, all read 31 July 2026.

The extension is tenant-level and available "a maximum of three times in the last 365 days" — a bridge, not a plan. And the capacity gate stands between you and a rehearsal environment at the worst moment: "You must also have at least 1 GB available of both operations and Dataverse database capacity to provision one more environment."

What to do this week

Open Licensing → Capacity add-ons → Finance and Operations in the Power Platform admin center and click the Finance and operations database usage column. It drills to table-level consumption with a time-series chart and a CSV export.
Work out your entitlement — default capacity for the first base licence plus the per-licence accrual, from the table above — and subtract consumption. That is your runway.
Check whether any environment has preallocated capacity and whether the alert opt-in is on. Soft enforcement nobody has subscribed to is not a control.
If you run agents, check for a per-agent monthly cap. Without one you find out a quarter above prepaid capacity, when the agents stop.

Where we would draw the line

We would not treat "exceeding storage doesn't affect availability" as a retention strategy, because Microsoft's next sentence reserves the right to suspend the service with reasonable notice. We would not size sandboxes outside the production pool, since the Operations entitlement is inclusive of Microsoft's Nonproduction, Reporting and Entity Store databases. And we would not put an optimization workload into an environment with no preallocation and no alert, because the first signal is an administrative operation failing on the day you needed it.

About Cognilium Cognilium is the AI optimization layer for Dynamics 365 — complementary apps that optimize the pricing, inventory, warehouse and planning decisions your ERP manages but can't optimize. Built on Power Platform, Dataverse and Azure. https://cognilium.ai · https://www.linkedin.com/company/37180269/

If you are sizing capacity for an optimization workload on Dynamics 365, book a call and we will walk the four meters against your own consumption. https://cognilium.ai

The 2026 capacity model — what changed, and what happens on overage?