The Challenges of AAD License Compliance

Azure Active Directory (AAD) provides identity and access management for most Microsoft hosted services, including Office 365, Azure, and Intune. A free level of AAD functionality is built into those services, and it is required. AAD paid tiers offer single sign-on to more cloud applications (including third-party applications), increased manageability, finer security controls, and better reporting. However, organizations face a licensing compliance risk if they roll out multiple editions of AAD. Limited options are available to minimize this risk, which could have long-term financial and technical implications. Those implications apply to other Microsoft hosted services as well.

Licensing AAD Editions

The free level of AAD functionality included with most Microsoft hosted services requires no separate licensing, but its capabilities are limited. The AAD paid editions are as follows:

AAD Basic, which includes features such as user groups and a company-branded sign in portal.

AAD Premium P1, which adds dynamic maintenance of group membership, multifactor authentication (MFA), and most other paid AAD features.