The Benefits of Group-Based Licensing in Microsoft Entra ID

In the modern businesses, IT administrators are often faced with the challenge of managing licenses for a growing number of users. Microsoft Entra ID, a part of Azure, addresses this issue with Group-Based Licensing, which allows administrators to manage licenses at the group level. This streamlines the process, ensuring users are correctly licensed without the need for manual, individual assignments. 

In this blog, we will discuss that how Microsoft Entra ID’s group-based licensing streamlines license management and provides an efficient way to implement it for Microsoft 365 applications. 

Supporting Statistics and Impact 

• 30% Time Reduction: Automating license assignments with group-based licensing saves up to 30% of the time spent on manual processes. 

• Scalable Solution: Perfect for organizations with large user bases (e.g., 10,000 users), making license management much simpler. 

• Maintain Compliance: Reduces the risk of over- or under-licensing by ensuring correct licenses, cutting compliance issues by 20%. 

• Faster Onboarding: By automating the license assignment process, new hires receive their licenses instantly, improving onboarding speed by 25%. 

Understanding Group-Based Licensing in Microsoft Entra ID?

Group-Based Licensing is a feature in Microsoft Entra ID that allows administrators to assign licenses to users based on their group memberships. This means that instead of assigning licenses to individual users, admins can assign licenses to a group (e.g., HR Department or IT Team), and all users within that group will inherit the assigned licenses automatically. 

For example, if you have a group of users in your HR department, you can assign licenses for Microsoft 365 or Office 365 apps to that group. When users are added or removed from the group, they automatically inherit or lose their license assignments without need of manual intervention. 

Benefits of Group-Based Licensing

Time Efficiency

Group-based licensing in Microsoft Entra ID can reduce the time spent on license management significantly. By automating license assignments, administrators no longer have to assign licenses to individual users manually. Microsoft Learn notes that businesses can around 30% of their time that would typically be spent on manual tasks. 

Example: A company with 200 employees can automate the assignment of licenses like Microsoft 365 to specific teams, such as HR, ensuring that all HR employees receive the necessary licenses with just one action, rather than manually assigning them to each user. 

Scalability for Large Enterprises

For large organizations, managing licenses for thousands of employees becomes challenging. Azure group-based licensing makes it easy for large companies to assign and manage licenses at scale. The use of dynamic groups in Azure AD allows companies to automate the process, ensuring that new users are assigned or removed from groups automatically. 

Example: A global consulting firm with offices in different regions uses dynamic Azure AD groups for each region. As part of the onboarding process, new employees are added to the appropriate regional groups, automatically receiving the necessary Microsoft 365 licenses based on their job function.

Maintaining Compliance 

Group-based licensing helps organizations stay compliant by ensuring all users receive the correct licenses. Reducing the risk of compliance issues that might arise from under-licensing or over-licensing. 

Example: A company in the healthcare industry leverages group-based licensing to ensure that only employees in regulated departments, like medical professionals, have access to sensitive tools like Microsoft Teams for healthcare. 

Simplified Onboarding 

Onboarding becomes quicker and more efficient with group-based licensing. New employees are automatically assigned licenses as soon as they are added to a group which leverage them to effortlessly start their work without much delay. 

Example: Like a newly hired marketing associate is automatically granted access to Microsoft 365 tools and collaboration apps when added to the Marketing Team group, ensuring they can start their tasks immediately. 

Maximizing Efficiency with Group-Based Licensing in Microsoft Entra ID is key to improving the overall onboarding experience, as employees can seamlessly start their work with no delays, directly contributing to productivity. 

Cost Efficiency 

Using group-based licensing, businesses can save on licensing expenses by ensuring licenses are only allocated to necessary users, eliminating the risk of over-licensing and waste. 

Example: Through group-based licensing, an organization ensures that only developers in its Engineering team are receiving licenses for Visual Studio and other specialized tools. Avoiding utilization of not tech users.

Practical Application and Examples

To implement group-based licensing for Microsoft 365 applications, follow these steps: 

Create or Identify Groups: Use Azure AD to create groups based on departments or teams. For instance, create a group for the HR Department or IT Team. 

Assign Licenses to Groups: Assign the appropriate Microsoft Entra licensing to the group. This ensures that all members of the group receive the necessary licenses automatically. 

Assign Users to Groups: As new users join the organization, they can be automatically added to the appropriate group based on their role, ensuring they inherit the correct licenses. 

How to Implement Group-Based Licensing in Microsoft Entra ID 

Managing licenses is significant for providing access to critical tools while maintaining the cost. Learn how to implement group-based licensing in Microsoft Entra ID with this step-by-step guide. 

Prerequisites

Before you start, ensure that all these prerequisites’ steps are met: 

Azure AD Premium P1 or P2 Subscription  

The Microsoft Entra licensing system requires Azure AD Premium P1 or P2 for group-based licensing. Verify that your organization has the necessary subscription. 

Setting Up Groups 

Decide the type of groups to use: 

• Microsoft 365 Groups: Ideal for collaboration with features like shared mailboxes and calendars. 

• Security Groups: Recommended for access control and license management. 

For automated updates, configure dynamic groups based on user attributes (e.g., department, location). 

Understanding Microsoft Azure License Types

Familiarize yourself with the various Microsoft Azure licensing types to ensure you assign the right licenses to each group. This helps avoid assigning licenses that users may not need. 

Manage gram for Naming and Tracking

Adopt a Manage gram approach to naming groups. For example, use a format like Region-Department-Role (e.g., NA-IT-Admins) to easily identify license assignments. 

 A Step-by-Step Guide 

Follow these steps to configure group-based licensing in Microsoft Entra ID: 

Step 1: Log in to the Microsoft Entra Admin Center

• Go to the Microsoft Entra Admin Center. 

• Sign in with an account having global administrator or license administrator privileges.

Step 2: Navigate to the Licenses Section 

• In the left menu, select Licenses → All Products. 

• Review the available Microsoft Azure license types to ensure you have the correct licenses for assignment.

Step 3: Assign Licenses to Groups 

• Select the desired product (e.g., Microsoft 365 E5 or Azure AD P1). 

• Click Assign, choose Groups, and select the group you want to assign licenses to. 

• Configure specific license options (e.g., enabling SharePoint, Teams, or Power BI) for the group. 

• Confirm and assign the licenses. 

Step 4: Test with a Pilot ID Group 

• Create a small ID group (e.g., a “Pilot” group) to test license assignments. 

• Add a few users and verify they automatically receive the appropriate licenses. 

• Resolve any issues before expanding to larger groups. 

Step 5: Monitor and Refine Licensing 

• Use the Licenses Overview to monitor usage and identify unassigned or underutilized licenses. 

• Update dynamic groups as roles or departments evolve.