Assigning Microsoft 365 User Licenses

• Microsoft 365 licenses must be applied to each user before they can use services.
• The original method, via the Microsoft 365 admin center, is limited to assigning licenses one at a time.
• A more modern method, group-based licensing, can be most efficient but may require additional licensing.
• Third-party tools and programmatic APIs are also available to manage some or all of Microsoft 365 service licensing.

Microsoft 365 hosted services and subscription software, including Microsoft 365 Apps for enterprise, generally require that each user of the service be assigned a User Subscription License (User SL). The User SL grants access to the hosted services or installed software when the user signs in with their Entra ID (previously called Azure Active Directory) credentials.

How Microsoft 365 Users Are Licensed

Microsoft 365 is a set of services, including Microsoft Apps for enterprise, Enterprise Mobility and Security (EM+S), and Office 365 services (such as SharePoint Online) that is licensed as a suite. Some, but not all, of the service components can be purchased stand-alone for users who do not receive a full Microsoft 365 license: Exchange Online is available as a separate license, but components such as individual desktop apps like Word and Excel are not. The suites cannot be disaggregated; subcomponents of a single license cannot be split across multiple users.