Understanding Entra ID Administrative Units

• Entra ID administrative units enable delegated management of users and groups within a single Entra ID tenancy.
• Administrative units are useful for large and multinational organizations to delegate management or avoid the need for multiple Microsoft 365 tenancies.
• Administrative units resemble on-premises Active Directory organizational units, but they are much more limited.
• Entra ID license requirements are minimal and low risk, although new features will increase costs.

Entra ID administrative units permit organizations to break up management of collections of users and groups into smaller units within a single Entra ID tenancy. Administrative units are likely most useful for larger or multinational organizations that need to delegate management, or those with heterogenous management requirements. While the use of administrative units is a paid feature of Entra ID P1 (formerly Azure Active Directory (AAD) Premium P1), at the current time only administrators require User Subscription Licenses (User SLs); users within administrative units do not. This will change once administrative units add support for dynamic membership (in preview), which will require P1 licensing for all users in that administrative unit, increasing the power of the feature while also increasing licensing costs.