What Is Microsoft Dataverse and Why Should Businesses Care?

What Is Microsoft Dataverse and Why Should Businesses Care?

If you've spent any time looking at Microsoft Power Apps, Power Automate or Dynamics 365, you've probably come across the term Microsoft Dataverse.

But what is Dataverse actually for? Is it a database? Is it part of Power Apps? And, more importantly, why should your business care about it?

In simple terms, Microsoft Dataverse is a cloud-based data platform for storing and managing business information. It provides the structured data foundation behind many Power Platform applications and Dynamics 365 solutions, allowing businesses to build apps, automate processes and work with information in a more consistent way.

You don't necessarily need to know that Dataverse exists to benefit from it. In many cases, it's working behind the scenes.

The real value becomes apparent when a business starts moving beyond spreadsheets, disconnected systems and manual processes and needs a more structured way to manage its data.

What is Microsoft Dataverse?

At its simplest, Dataverse gives businesses somewhere to store structured business data.

Rather than having important information spread across Excel files, SharePoint lists and different departmental systems, Dataverse allows that information to be organised into tables, with columns, relationships and rules that define how the data works.

For example, a business might need to manage customers, employees, projects and service requests.

Instead of keeping separate spreadsheets for each of these, Dataverse could provide a structured data model connecting the different types of information. A customer could have multiple projects, a project could have multiple requests, and those relationships can be understood by the applications using the data.

This is what makes Dataverse different from simply putting files into cloud storage.

It's designed to provide the data foundation for business applications and processes, rather than simply giving people somewhere to save documents. Microsoft describes it as the data platform that comes with Power Apps and the platform on which Dynamics 365 applications are built.

How does Dataverse work with Power Apps?

One of the main reasons businesses encounter Microsoft Dataverse is through Power Apps.

Power Apps allows organisations to create custom business applications without having to develop every component from scratch. Those applications need somewhere to store their information, and Dataverse can provide that underlying data platform.

Imagine your business wants to replace an internal equipment request spreadsheet.

An employee could submit a request through a Power App. The request could be stored in Dataverse, where it becomes a structured record rather than another row in someone's spreadsheet.

Power Automate could then use that information to trigger an approval process, notify the appropriate people and update the request when a decision has been made.

Managers could use another application to review outstanding requests, while Power BI could be used to analyse the data and identify trends.

The user sees an application and a straightforward process.

Behind it, Dataverse is providing the structured business data that allows all those components to work together.

Why use Dataverse instead of Excel?

Excel is an incredibly useful business tool, and there's nothing inherently wrong with using it to manage information.

The problem is that spreadsheets can gradually become something they were never designed to be.

A simple spreadsheet might begin as a list of customers. A few months later, it could contain multiple sheets, complex formulas, macros and instructions for several people. Eventually, a business-critical process depends on one particular file being kept up to date.

That's when things can start becoming difficult.

Who has the latest version? What happens when two people edit it at the same time? How do you control access to individual records? What happens when the spreadsheet needs to connect to another system?

Dataverse is designed for a different type of problem.

It provides structured tables and relationships, alongside capabilities such as business rules, security and business process functionality. This allows the data to become part of a properly designed application rather than being the application itself.

That doesn't mean every spreadsheet should be replaced with Dataverse. For simple information and straightforward calculations, Excel may still be exactly the right tool.

The question is whether the spreadsheet is still a spreadsheet — or whether it has quietly become a business system.

What about SharePoint?

The same principle applies to SharePoint.

SharePoint lists can be an excellent way to manage structured information, particularly when that information is closely connected to documents, collaboration and Microsoft 365.

But SharePoint and Dataverse are designed with different use cases in mind.

SharePoint is particularly strong for document management, collaboration, intranets and information that people need to access as part of their day-to-day work.

Dataverse is designed more specifically around structured business data and applications.

For example, a SharePoint list might be a perfectly good way to manage a list of company policies or departmental contacts. A complex application involving customers, cases, approvals, relationships and business rules may be better suited to Dataverse.

Choosing between them isn't about which Microsoft product is "better". It's about understanding what you're trying to build.

Dataverse and Dynamics 365

Dataverse is also closely connected to Microsoft Dynamics 365.

Dynamics 365 applications use Dataverse as their underlying data platform, which means organisations can build Power Platform solutions around the data already held within their Dynamics environment.

This can be particularly useful when an organisation needs something that isn't available out of the box.

For example, a company using Dynamics 365 for sales might need a custom internal application for a particular approval process. Rather than creating a completely separate system and database, Power Apps and Dataverse can provide a way of extending the existing Microsoft environment.

This is one of the broader advantages of the Microsoft ecosystem: different applications and services can be connected around common business data rather than operating as completely isolated systems.

Is Dataverse just a database?

Technically, Dataverse provides database functionality. But calling it simply a database doesn't really explain why businesses use it.

Traditional databases generally provide somewhere to store data. Dataverse goes further by combining data storage with capabilities for security, business rules, relationships, automation and application development.

It also provides a security model that can be configured at different levels, allowing organisations to control access to business information based on roles and other permissions.

That makes Dataverse particularly useful as the foundation for business applications.

It also doesn't mean developers are excluded. Dataverse supports both low-code configuration and more advanced development, including code-based extensions where they're needed.

This makes it possible to take a solution further as requirements become more sophisticated.

What can businesses use Dataverse for?

There are countless potential applications, but the strongest use cases tend to involve business processes where information needs to be structured, shared and acted upon.

A business could use Dataverse as the foundation for an employee onboarding application, an asset management system, a customer service process, a project management application or an internal request system.

It can also support automated processes.

For example, a Dataverse record being created or updated can trigger a Power Automate flow, allowing the change to initiate notifications, approvals or other actions automatically.

The important thing is that the technology supports the process rather than becoming the focus of it.

Employees don't need to care whether a particular form is backed by Dataverse. They care that the form is easy to use, their request goes to the right person and they don't have to enter the same information three times.

When should a business consider Microsoft Dataverse?

Dataverse becomes worth considering when your existing approach to managing information is starting to create problems.

You might notice that different teams are maintaining separate versions of the same data. Employees may be copying information manually between systems. Important processes might depend on spreadsheets, or staff may be spending significant amounts of time updating records that could potentially be automated.

You may also be building Power Apps and finding that your requirements have outgrown a simple data source.

These are signs that the underlying data architecture deserves some attention.

That doesn't automatically mean you need Dataverse. Sometimes a SharePoint list, an existing Microsoft 365 feature or another solution will be more appropriate.

The important thing is to choose the technology based on the business requirement rather than trying to force every problem into the same platform.

Why should businesses care about Dataverse?

The real value of Microsoft Dataverse isn't the database itself. It's what having a structured data foundation makes possible.

Once your business information is organised properly, you can build applications around it, automate processes that depend on it and analyse the information to make better decisions.

It can also reduce the need for disconnected systems. Instead of creating a new database every time the business needs a new application, organisations can build on an existing Microsoft data platform.

For businesses already using Microsoft 365, Power Platform or Dynamics 365, that can be a significant advantage.

And as organisations increasingly look at automation, AI and Copilot, having reliable, structured business data becomes even more important. Microsoft is continuing to position Dataverse as a foundation for connected applications, automation and AI experiences across the Power Platform.

Is Microsoft Dataverse right for your business?

Dataverse isn't something every business needs simply because it's part of the Microsoft ecosystem.

But if your organisation is relying heavily on spreadsheets, manually moving information between systems or building increasingly complicated processes around disconnected data, it is worth considering whether your current approach is still fit for purpose.

The right solution might be Dataverse and Power Apps. It might be SharePoint. It might be automation, an existing business application or a combination of several technologies.

The starting point should always be the problem you're trying to solve.

At Dolphin, we help businesses assess their existing Microsoft environment and identify where technologies such as Power Apps, Power Automate and Dataverse can improve the way they work.

If you're unsure whether your current systems are holding your business back, our free Microsoft environment assessment can help identify where there may be opportunities to simplify processes, connect systems and make better use of the technology you already have.