The first thing that confuses every newcomer: Power Automate is actually two products under one name. They play different roles and people often mix them up.
Power Automate Cloud is an integration engine in the cloud. It connects apps through ready connectors – Outlook, SharePoint, Teams, Excel Online, Dynamics 365, but also Salesforce, Dropbox, more than 1,000 apps. It runs in the background, in the Microsoft cloud. It doesn't click any buttons – it calls the apps' APIs. Perfect for scenarios like: when an invoice email arrives, save the attachment to SharePoint and ping a Teams channel.
Power Automate Desktop is a different story – this is classic RPA. It installs on a computer, records clicks, drives desktop applications. If an app has no API but has a window – Power Automate Desktop can handle it. Perfect for: that old accounting system, that government portal, that app only one person knows how to use.
A single Microsoft 365 subscription usually gives access to a basic version of both. Power Automate Cloud handles most simple scenarios at little or no extra cost. Power Automate Desktop in unattended mode (running without a logged-in user) does require an additional licence.
This distinction is key. Most Power Automate vs RPA conversations are really about Power Automate Desktop vs classic RPA. Power Automate Cloud is in a category of its own – a competitor to integration tools (Zapier, Make, n8n), not to RPA.