Introduction
Entra ID (Azure AD) is a cloud-based identity and access management service from Microsoft that helps businesses manage user identities and access to resources. Understanding the pricing and licensing options for Entra ID is essential for organizations looking to implement a cost-effective solution while leveraging its powerful identity management features. This guide of Entra ID (Azure Active Directory) Pricing and Licensingwill walk you through the various editions, their features, pricing considerations, and provide a framework to help you choose the right licensing for your organization.
This article is a part of our Active Directory Tutorial guide: What is Active Directory? 20 Articles Guide for IT Professionals
Edition Overview
Entra ID (Azure AD) is available in several editions, each tailored to different needs and use cases. These editions provide varying levels of functionality, from basic directory services to advanced security and identity management capabilities. The key editions include:
- Free Edition: Offers basic features for small organizations or for users who need minimal directory services.
- Premium P1 Edition: Offers additional enterprise features, including hybrid identity and advanced group management.
- Premium P2 Edition: Provides the most advanced features, including identity protection, privileged access management, and extensive security capabilities.
Feature Comparison
Each edition of Entra ID (Azure AD) includes different features, designed to cater to organizations of varying sizes and complexity. The table below summarizes the major features available in each edition:
| Feature | Free | Premium P1 | Premium P2 |
|---|---|---|---|
| Basic directory features | ✔ | ✔ | ✔ |
| User management | ✔ | ✔ | ✔ |
| Self-service password reset | ✔ | ✔ | ✔ |
| Hybrid deployments | ✔ | ✔ | |
| Advanced group access | ✔ | ✔ | |
| Dynamic groups | ✔ | ✔ | |
| Cloud app discovery | ✔ | ✔ | |
| Identity protection | ✔ | ||
| Privileged identity management | ✔ | ||
| Access reviews | ✔ | ||
| Advanced security features | ✔ |
License Types
Entra ID (Azure AD) offers a flexible licensing model to meet different needs:
- Free Edition: Best for small businesses or organizations with basic directory requirements.
- Premium P1: Suited for medium to large organizations needing advanced user management, hybrid identity, and group-based access controls.
- Premium P2: Designed for organizations with high-security requirements, including identity protection, privileged access management, and advanced security analytics.
Free Edition Features
The Free Edition of Entra ID (Azure AD) provides essential directory features for organizations that don’t need advanced functionality or extensive user management tools. It is ideal for small businesses or startups that are just getting started with cloud identity management.
Basic Directory Features
With the Free Edition, you get a cloud-based directory for storing user accounts and information, including basic user profiles, passwords, and groups. This directory integrates with Microsoft 365 and other cloud applications, providing a centralized management platform.
User Management
Basic user management capabilities are available, including user creation, management, and authentication for access to Microsoft services such as Outlook, Teams, and SharePoint.
Self-Service Password Reset
Users can reset their passwords without IT intervention, reducing the burden on IT staff and enhancing user experience. This feature is available for cloud-based accounts only.
Basic Reports
Entra ID (Azure AD) Free provides basic reporting capabilities, allowing you to track the activity and status of users, groups, and devices within your organization.
Premium P1 Features
The Premium P1 edition extends the Free Edition with more advanced features that allow for greater flexibility, scalability, and control over access management, making it ideal for enterprises with complex requirements.
Hybrid Deployments
Premium P1 supports hybrid identities, allowing organizations to extend their on-premises Active Directory to the cloud. This is ideal for businesses with existing on-premises infrastructure that want to integrate Entra ID (Azure AD) seamlessly.
Example: A company that wants to integrate its on-premises AD with Office 365 for unified user authentication across cloud and on-premises resources would benefit from this feature.
Advanced Group Access
Premium P1 offers advanced group management, such as dynamic group memberships, which automatically update based on user attributes like department or role. This feature simplifies access control and group management for large organizations.
Dynamic Groups
Dynamic groups enable organizations to automate group membership based on predefined rules. For example, a group could automatically update to include users with a specific job title, department, or security clearance.
Cloud App Discovery
This feature helps organizations identify which cloud applications are being used by employees within their environment. This is especially useful for discovering shadow IT and assessing the risk of non-approved applications.
Premium P2 Features
Premium P2 builds on the features offered in Premium P1, providing advanced capabilities for identity protection, privileged access management, and comprehensive security monitoring.
Identity Protection
Entra ID (Azure AD) Premium P2 includes Identity Protection, a set of risk-based conditional access policies that help prevent unauthorized access to your resources by analyzing user behavior and authentication patterns.
Example: If a user is trying to access the system from an unusual location, Entra ID (Azure AD) can block or challenge the login using multi-factor authentication (MFA).
Privileged Identity Management (PIM)
PIM helps manage and secure privileged accounts by enforcing just-in-time access, ensuring users only have access to sensitive resources when needed. This minimizes the risk of privilege escalation and unauthorized access.
Access Reviews
With Premium P2, organizations can automate access reviews, ensuring that only authorized users maintain access to sensitive applications and resources. Periodic access reviews help identify unnecessary permissions and enforce the principle of least privilege.
Advanced Security
Premium P2 provides advanced security features like conditional access policies and security reporting, enabling administrators to proactively monitor and protect user data and access.
Cost Analysis
TCO Calculation
When considering Entra ID (Azure AD) licensing, it is important to calculate the total cost of ownership (TCO). This includes not only the licensing fees but also the operational costs associated with managing user identities, monitoring security, and integrating with third-party services.
Example: If your organization is moving from an on-premises Active Directory to Entra ID (Azure AD), consider the operational savings in IT support, server maintenance, and infrastructure management when calculating TCO.
ROI Assessment
Azure AD can improve security, user experience, and productivity, which can lead to measurable improvements in organizational efficiency. Assessing the ROI involves comparing the costs of Entra ID (Azure AD) licenses against the benefits it provides, such as reduced IT overhead, enhanced security, and streamlined user management.
Migration Costs
Migrating from an on-premises identity solution to Entra ID (Azure AD) or from one Entra ID (Azure AD) edition to another involves some upfront costs. These costs can include planning, implementation, and potential consulting fees for assistance in the migration process.
Example: Migrating a large enterprise to Premium P2 may require additional resources for planning and executing the deployment of advanced features such as Privileged Identity Management (PIM) and Identity Protection.
Support Costs
Consider the support costs associated with managing and maintaining Entra ID (Azure AD). Microsoft offers various levels of support, which can be factored into the overall cost of ownership.
Example: Organizations with Premium P1 or P2 licenses may require dedicated support for more complex identity management tasks, which may incur additional costs beyond the licensing fees.
Conclusion
Edition Comparison
When selecting an Entra ID (Azure AD) edition, it’s important to understand the feature sets of each option:
- Free Edition: Best for small businesses with basic directory needs.
- Premium P1: Ideal for medium-to-large organizations that require hybrid deployment and advanced group management.
- Premium P2: Suitable for enterprises with high-security demands, needing advanced identity protection and privileged access management.
Selection Guidance
When choosing between Entra ID (Azure AD) editions, evaluate your organization’s size, security requirements, and existing IT infrastructure. If you need to support hybrid environments or require advanced security features, Premium P1 or P2 may be more appropriate. For businesses with minimal identity management needs, the Free Edition may suffice.
Additional Resources
Whether you’re looking for troubleshooting tips, deep dives into systems architecture, or the latest in cloud computing, I’m here to help you navigate the evolving tech landscape. Let’s connect, learn, and grow together!
📧 ravi.chopra1709@gmail.com
- Entra ID (Azure Active Directory) Pricing and Licensing Guide - 14 February 2025
- AD Integration with Third-Party Applications - 10 February 2025
- Enterprise AD Management Strategies - 3 February 2025
