Microsoft Entra External ID Licensing Guide
Microsoft Entra External ID Licensing Guide
Section titled “Microsoft Entra External ID Licensing Guide”Overview
Section titled “Overview”This guide provides a comprehensive breakdown of Microsoft Entra External ID and Microsoft Entra ID (Workspace Tenant) licensing options, which differ based on how external identities and internal identities are managed within your organization.
1. Microsoft Entra External ID (External Tenant)
Section titled “1. Microsoft Entra External ID (External Tenant)”Overview
Section titled “Overview”Microsoft Entra External ID (formerly Azure AD B2B) allows you to manage external identities and provide access to your applications, services, and resources without creating new accounts for external users.
Pricing Structure
Section titled “Pricing Structure”| Usage Tier | Price per MAU | Authentication Type | Business Value |
|---|---|---|---|
| First 50,000 MAUs/month | Free | All types | No cost for basic external collaboration |
| 50,000+ MAUs | $0.00325 | Standard credentials (Azure AD, Microsoft account, Google, SAML) | Cost-effective for large-scale external access |
| 50,000+ MAUs | $0.0055 | Multi-Factor Authentication (MFA) or Conditional Access | Enhanced security for external users |
How it Works:
- You are only charged for the number of unique external users accessing your resources each month
- Pricing applies only to active users (users who authenticate during the month)
Cost Example
Section titled “Cost Example”If you have 55,000 external users:
- The first 50,000 are free
- For the remaining 5,000 users: 5,000 × $0.00325 = $16.25 per month (standard credentials)
2. Microsoft Entra ID (Workspace Tenant)
Section titled “2. Microsoft Entra ID (Workspace Tenant)”Overview
Section titled “Overview”Microsoft Entra ID (formerly Azure AD) is primarily used for managing internal users, devices, and applications within an organization. Pricing depends on the tier of Entra ID you choose.
Licensing Options
Section titled “Licensing Options”| Plan | Price per User/month | Key Features | Ideal For |
|---|---|---|---|
| Free Tier | Free | Basic identity and access management for up to 500,000 internal objects | Small organizations with minimal access management needs |
| Entra ID P1 | ~$6 | Self-service password reset, MFA, Conditional Access, on-premises integration | Organizations needing enhanced security for internal identities |
| Entra ID P2 | ~$9 | All P1 features + advanced identity protection, PIM, risk-based Conditional Access | Large enterprises with strict compliance needs |
Choosing the Right Option
Section titled “Choosing the Right Option”Decision Framework
Section titled “Decision Framework”| Scenario | Recommended Solution | Why |
|---|---|---|
| External collaboration focus | Microsoft Entra External ID | Cost-effective based on active external users rather than total system users |
| Internal identity management | Microsoft Entra ID (Workspace Tenant) | Designed for internal users with pricing based on internal user count |
| Advanced governance needs | Entra ID P2 | Provides identity governance, risk detection, and privileged identity management |
Pricing Scenarios
Section titled “Pricing Scenarios”Small Company with External Partners
Section titled “Small Company with External Partners”- 30,000 external users accessing your systems
- Cost: Free (under 50,000 MAUs)
Medium Company with Internal Users
Section titled “Medium Company with Internal Users”- 10,000 internal users using Microsoft Entra ID P1
- Cost: 10,000 × $6 = $60,000 per month
Large Enterprise with Mixed Requirements
Section titled “Large Enterprise with Mixed Requirements”- 120,000 external users (70,000 exceeding free tier)
- External users cost: 70,000 × $0.00325 = $227.50 per month
- 5,000 internal users on Microsoft Entra ID P2
- Internal users cost: 5,000 × $9 = $45,000 per month
Conclusion
Section titled “Conclusion”Microsoft Entra External ID
Section titled “Microsoft Entra External ID”Perfect for businesses that need to engage with a large number of external partners or clients with minimal internal overhead, offering a free tier for the first 50,000 users and flexible pricing based on active usage.
Microsoft Entra ID (Workspace Tenant)
Section titled “Microsoft Entra ID (Workspace Tenant)”Designed for organizations looking to manage internal users, devices, and applications. P1 and P2 plans offer varying levels of security, compliance, and governance features depending on organizational needs.
Key Takeaway: Choose External ID for cost-effective external collaboration, and Workspace Tenant licenses for comprehensive internal identity management with advanced security features.