In the past few weeks, we’ve announced the general availability of Microsoft Entra External ID and Microsoft Entra ID multi-tenant collaboration. We’ve received requests for more detail from some of you regarding licensing, so I’d like to provide additional clarity for both of these scenarios.

One person, one license

Included in the first announcement of more multi-tenant organization (MTO) features to enhance collaboration between users, we stated that only one Microsoft Entra ID P1 license is required per employee per multi-tenant organization. Expanding on that, the term “multi-tenant organization” has two descriptions: an organization that owns and operates more than one tenant; and a set of features that enhance the collaboration experience for users between these tenants. However, your organization doesn’t have to deploy those capabilities to take advantage of the one person, one license philosophy. An organization that owns and operates multiple tenants only needs one Entra ID license per employee across those tenants. The same philosophy applies to Entra ID Governance: the organization only needs one license per person to govern the identities of these users across these tenants.

To illustrate this scenario, let’s consider an organization called Contoso, which owns ZT Tires and Tailspin Toys. Mallory is hired by Contoso, which uses Lifecycle Workflows in Entra ID Governance to onboard her user account and grant her access to the resources she needs for her job. Her account receives an access package with an entitlement to ZT Tires’ ERP app, and she requests access to Tailspin Toys inventory management app. Because Mallory has an Entra ID Governance license in the Contoso tenant, her identity can be governed in the ZT Tires and Tailspin Toys tenants with no additional governance licenses – one person, one license.

Entra ID Governance in Microsoft Entra External ID

The other announcement covered Entra External ID, Microsoft’s solution to secure customer and business collaborator access to applications. In November, I blogged about the licensing model to govern the identities of business guests in the B2B scenario for Entra External ID and shared that pricing would be $0.75 per actively governed identity per month. Because metered, usage-based pricing to govern the identities of business guests is a different model than the existing, licensed-based pricing model to govern the identities of employees, I’d like to share more detail.

A business guest identity in Entra External ID will accrue a single $0.75 charge in any month in which that identity is actively governed, no matter how many governance actions are taken on that identity. For example: 

A Contoso employee named Gerhart collaborates with Pradeep of Woodgrove Bank to produce Contoso’s quarterly financial statements. Contoso has deployed Entra External ID for its business partners such as Woodgrove Bank. In April, Pradeep accesses Contoso’s Microsoft Teams where Gerhart stores his quarterly reporting documents, but his Entra External ID has no identity governance actions taken on them, so it doesn’t accrue any charges.

In May, Pradeep receives an access package with an entitlement to Contoso’s accounting system, and Gerhart reviews Pradeep’s existing access to Contoso’s inventory management database, as well as to the Teams with the quarterly reporting documents. Because Pradeep’s identity in Entra External ID had identity governance actions taken on it, Contoso will accrue a $0.75 charge. Note that the charge is applied once, even though there were three identity governance actions taken during the month. Once that Entra External ID identity was governed in May, additional identity governance actions do not generate additional charges for that identity in May.

To learn more about Microsoft Entra ID Governance licensing, visit the Licensing Fundamentals page.

Read more on this topic 

Entra ID multi-tenant collaboration 
Microsoft Entra External ID general availability 

Learn more about Microsoft Entra  

Prevent identity attacks, ensure least privilege access, unify access controls, and improve the experience for users with comprehensive identity and network access solutions across on-premises and clouds. 

⁠Microsoft Entra News and Insights | Microsoft Security Blog  
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⁠Microsoft Entra documentation | Microsoft Learn 
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