Microsoft Entra ID Guest Licensing Guide
Microsoft Entra ID Guest Licensing Guide
Section titled “Microsoft Entra ID Guest Licensing Guide”Overview
Section titled “Overview”Microsoft Entra ID (formerly Azure AD) provides flexibility for managing and licensing guest users through Premium License (P1/P2) or the Monthly Active Users (MAU) model. This guide outlines the available options and recent changes to guest licensing.
Historical Guest Licensing Options
Section titled “Historical Guest Licensing Options”Premium License Ratio Model
Section titled “Premium License Ratio Model”Guest Licensing via Entra ID Premium was available in a 1:5 Ratio:
- For each Entra ID Premium P1 or P2 license, you could assign access to 5 guest users for free
- This model provided predictable costs for organizations with consistent guest access needs
MAU (Monthly Active Users) Billing Model
Section titled “MAU (Monthly Active Users) Billing Model”Flexible Pricing Structure
Section titled “Flexible Pricing Structure”| Feature | Capability | Business Value |
|---|---|---|
| Pay-per-use pricing | $0.75 per guest user per month | Only pay for active usage, reducing costs |
| Activity-based billing | Charges only when guests log in or perform identity governance actions | Cost-effective for fluctuating guest access needs |
| Free tier | First 50,000 guest users per month are free | Ideal for large-scale collaboration scenarios |
Ideal for: Organizations with variable guest access patterns or large numbers of external collaborators.
Microsoft Entra ID Governance Add-On
Section titled “Microsoft Entra ID Governance Add-On”Extended Governance for Business Guests
Section titled “Extended Governance for Business Guests”Many organizations need to extend governance features to business guests—contractors, partners, and external collaborators—to implement least privilege access principles while enabling seamless collaboration.
New ID Governance Meter
Section titled “New ID Governance Meter”Microsoft has announced a new ID Governance for Microsoft Entra External ID meter for business guests:
- Operating model: Monthly active usage (MAU)
- Pricing: $0.75 per monthly governed identity
- Billing: Charges based on actual business guest MAU
Licensing Transition Details
Section titled “Licensing Transition Details”Grandfathered Provisions
Section titled “Grandfathered Provisions”Existing Azure AD External ID customers are grandfathered to continue using the subset of identity governance features included in Entra ID P1 and P2.
Migration Considerations
Section titled “Migration Considerations”- Organizations can transition to the new MAU model for enhanced governance capabilities
- The new model provides more granular control over external identity management
- Cost structure remains competitive with the original MAU pricing
Conclusion
Section titled “Conclusion”Key Takeaway: The evolution of Entra ID guest licensing from the 1:5 ratio model to the MAU-based approach provides organizations with more flexible and cost-effective options for managing external access while maintaining strong security governance.
The transition to MAU-based billing and the new ID Governance add-on represent Microsoft’s commitment to providing scalable identity solutions that adapt to modern collaboration needs.