Microsoft Entra Licensing Model Overview
Microsoft Entra Licensing Model Overview
Microsoft Entra is the unified identity and access platform that includes Azure Active Directory, Permissions Management, and Verified ID. Its licensing model defines which identity, security, and compliance features you can deploy. The structure is tiered, and each tier unlocks specific capabilities for authentication, authorization, and governance.
Core Licensing Tiers
- Free – Basic identity management, Azure AD integration, single sign-on for a limited number of apps, and essential security alerts.
- Microsoft Entra ID P1 – Advanced identity governance, conditional access policies, MFA configuration flexibility, hybrid identity integration, and dynamic groups.
- Microsoft Entra ID P2 – All P1 features plus Identity Protection with risk-based conditional access, Privileged Identity Management (PIM), and advanced compliance reporting.
- Permissions Management – A separate SKU providing cloud infrastructure entitlement management across Azure, AWS, and Google Cloud.
- Verified ID – Decentralized identity issuance and verification. May be licensed individually or included in higher bundles.
Key Changes and Consolidation
The Microsoft Entra licensing model now unifies Azure Active Directory naming into Microsoft Entra ID, making the lineup clearer. Previously separate products are now grouped under the Entra umbrella, streamlining procurement and management. This impacts billing and feature mapping. For example, features like Conditional Access and Access Reviews that were once split across multiple services are now organized directly under the P1/P2 structure.
How to Choose the Right License
Identify your highest compliance and security risks. Map those to feature sets in P1 or P2. If your operations span multiple clouds, factor in Permissions Management for centralized entitlement control. Use Verified ID if you need secure credential portability and decentralized verification.
Cost Management Tips
- Audit existing identities and remove unused accounts to avoid over-licensing.
- Apply group-based licensing to automate assignments and avoid human error.
- Review audit logs to confirm licensed features are in active use.
- Consider a hybrid model where high-privilege users get P2 and regular staff use Free or P1.
Why It Matters
The new Microsoft Entra licensing model is not just a pricing change. It shapes how you enforce zero trust, manage cloud entitlements, and maintain compliance in multi-cloud environments. The right selection prevents gaps in coverage and wasted spend.
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