In a Nutshell
Microsoft Entra ID offers four pricing tiers: Free, P1, P2, and Entra Suite, each with varying identity management and security features.
Entra ID P1 introduces Conditional Access and hybrid identity support, while P2 adds Identity Protection and Privileged Identity Management (PIM).
Microsoft 365 includes Entra ID P1 in E3/Business Premium and Entra ID P2 in E5, offering bundled pricing advantages.
Entra ID lacks built-in backup and recovery, making third-party backup solutions essential for long-term data protection and compliance.
Choosing the right Microsoft Entra ID plan isn’t always straightforward. With multiple pricing tiers and features, companies must ensure they get the best value without paying for unnecessary extras. Understanding the cost structure is significant for budgeting and compliance, especially for organizations managing large teams and complex IT environments.
This guide explains Microsoft Entra ID pricing, covering plan options and key cost factors.
Microsoft Entra ID Explained: How It Strengthens Security and Access
Managing user identities and access across cloud and on-premises environments is a critical challenge for enterprises. Microsoft Entra ID is a cloud-based identity and access management (IAM) solution that provides secure authentication, centralized access control, and identity protection. It plays a key role in modern IT infrastructure by enabling seamless application access while enforcing security policies.
Previously known as Azure Active Directory (Azure AD), Microsoft rebranded the service under the Entra product family to reflect its expanded capabilities beyond traditional directory services. This shift aligns with Microsoft’s vision of unified identity and security management across cloud and hybrid environments.
Microsoft Entra ID enhances security and enables a seamless user experience with key identity management functions such as user authentication, single sign-on (SSO), and multi-factor authentication (MFA). It also includes Privileged Identity Management (PIM) to restrict access to sensitive resources and hybrid identity support to bridge on-premises Active Directory with cloud applications.
Entra ID integrates tightly with Microsoft 365, Azure, and third-party applications, allowing organizations to enforce security policies across multiple platforms. This ensures secure user access to business applications while giving IT teams centralized visibility and control over permissions.
For enterprises, Entra ID provides several business benefits:
-
Stronger security through advanced identity protection, conditional access, and AI-driven threat detection.
-
Improved user experience with seamless authentication and self-service password reset capabilities.
-
Simplified IT administration by automating access management and reducing manual intervention.
-
Regulatory compliance support with detailed audit logs and role-based access controls to meet data protection requirements.
-
Scalability to accommodate businesses of all sizes, from small teams to global enterprises.
Security is a core focus of Entra ID. Conditional Access policies dynamically adjust user access based on risk signals such as location, device, and login behavior. Identity Protection utilizes Microsoft’s threat intelligence to detect compromised accounts and prevent unauthorized access. Role-based access control (RBAC) ensures that users have only the minimum permissions required for their roles, reducing exposure to attacks.
By centralizing identity management, Microsoft Entra ID strengthens security, improves user productivity, and streamlines IT operations, making it influential in any enterprise’s cloud strategy.
Microsoft Entra ID Pricing Plans: Features and Cost Breakdown
1. Free Edition
The Free Edition of Microsoft Entra ID offers basic identity and access management at no cost, making it a viable option for organizations with minimal security needs. While it provides essential features, it lacks the advanced capabilities available in paid tiers.
This edition supports single sign-on (SSO) for up to 10 apps per user, enabling streamlined access management. It includes basic multi-factor authentication (MFA) for added security and self-service password reset for cloud users, reducing IT workload. Additionally, it allows basic user and group management, facilitating identity administration.
However, the Free Edition has significant limitations. It does not include Conditional Access, Identity Protection, or Privileged Identity Management (PIM)—critical tools for enforcing security policies. It also lacks automated risk detection and compliance tools and offers limited hybrid identity support, restricting integration with on-premises Active Directory.
Due to these constraints, the Free Edition is best for small organizations or startups operating in cloud-only environments with minimal security requirements.
2. Entra ID P1
Entra ID P1 is Microsoft Entra ID’s first paid tier, offering enhanced identity management beyond the Free Edition.
Key features include hybrid identity support, enabling seamless integration with on-premises Active Directory. It offers self-service password reset (SSPR) for cloud and hybrid users, reducing IT support workload. Besides, Conditional Access policies enforce security controls based on user location and device, while Microsoft Authenticator integration enhances multi-factor authentication (MFA).
Despite its capabilities, Entra ID P1 has notable limitations. It lacks Identity Protection, indicating it does not provide risk-based access controls for detecting and mitigating identity threats. It also doesn’t include Privileged Identity Management (PIM) for managing elevated access or advanced governance tools for automated identity monitoring and compliance.
The pricing for Entra ID P1 is approximately $6 per user/month, though actual costs may vary based on licensing agreements and organization size. This plan is best for organizations needing hybrid identity management and stronger security controls, but not requiring extensive access governance or risk-based authentication.
3. Entra ID P2
Entra ID P2 is the highest-tier standalone plan. It includes all features of Entra ID P1, with additional tools to enhance identity protection and access control. This tier’s extra features include Identity Protection, which uses AI-driven risk analysis to detect and respond to compromised accounts.
Another feature is Privileged Identity Management (PIM), which enforces just-in-time role-based access to reduce standing privileges. Access Reviews allow organizations to regularly audit and adjust user role assignments, improving security oversight. Advanced Conditional Access introduces risk-based authentication, dynamically enforcing security policies based on real-time threat analysis.
Pricing for Entra ID P2 is approximately $9 per user/month, though costs vary based on Microsoft licensing agreements. This can become expensive for large-scale deployments, particularly if not bundled with other Microsoft services.
While Entra ID P2 offers robust security, it requires specialized expertise for proper configuration and management. Without a well-planned implementation, organizations may not fully leverage their security benefits. This plan is ideal for enterprises in regulated industries that demand robust compliance, security, and access governance, such as financial services, healthcare, and government sectors.
4. Entra Suite
Microsoft Entra Suite is the most comprehensive identity and security solution within the Entra ecosystem. It consolidates multiple Microsoft security and access management tools into a single package, providing a unified approach to identity governance and Zero Trust security.
The suite includes all Entra ID P2 features while integrating Entra Verified ID. This ensures advanced identity protection, risk-based Conditional Access, and identity governance. It also enables decentralized identity verification for enhanced security and privacy.
Entra Permissions Management provides cross-cloud security enforcement, managing permissions across multiple cloud environments. Network access controls support Zero Trust principles, restricting access based on identity, device, and risk context.
Entra Suite’s pricing is approximately $12 per user/month, though enterprise agreements may affect the final cost. While more expensive than standalone P1 or P2 plans, it reduces reliance on third-party security tools by integrating identity, access, and governance in one package.
This plan is best suited for large enterprises that require scalable identity governance and strict Zero Trust security across their IT infrastructure.
5. Licensing and Subscription Options
Choosing the right Microsoft Entra ID licensing model depends on your organization’s Microsoft 365 plans, security needs, and scalability requirements. Microsoft offers both standalone licenses and bundled options within broader Microsoft 365 subscriptions.
Bundled options include Entra ID P1 with Microsoft 365 E3 and Business Premium and Entra ID P2 with Microsoft 365 E5. If your organization needs additional features beyond your current plan, you can purchase Entra ID P1 or P2 as standalone licenses for selected user groups.
For large enterprises, Microsoft Enterprise Agreements (EA) and Volume Licensing provide cost advantages, including discounted pricing and flexible terms based on user count and required features. Bulk purchasing under an EA can reduce overall costs while ensuring access to advanced identity management tools.
When selecting a licensing model, evaluate whether your current Microsoft 365 plan meets your security and compliance needs. Consider advanced identity protection, scalability, and long-term identity management strategies to ensure future growth.
Addressing Microsoft Entra ID’s Limitations with a Backup Solution
Microsoft Entra ID is pivotal to identity management, but its lack of robust backup and recovery features creates risks for organizations. Without a reliable backup solution, accidental deletions, misconfigurations, and cyber threats can lead to irreversible data loss and compliance challenges.
Microsoft Entra ID retains deleted users, groups, and roles for only 30 days before permanent removal. If this window is missed, recovery becomes impossible. Also, there are no granular restore options. This forces IT teams to recreate deleted objects manually—a time-consuming and error-prone process. Configuration rollbacks are not supported, so accidental changes to security roles, Conditional Access policies, or group memberships require manual fixes.
Audit log retention is another major limitation. Free and P1 editions store logs for only 30 days, making long-term forensic investigations difficult without external logging solutions. Under frameworks like the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA), and ISO 27001, organizations in regulated industries face compliance risks if they cannot retain logs for extended periods.
Without tamper-proof backups, organizations remain vulnerable to ransomware, insider threats, and operational downtime caused by misconfigurations or cyber incidents. A comprehensive backup solution helps you overcome these gaps, making them essential to ensuring data resilience, compliance, and business continuity.
With Nexetic Backup for Entra ID, you can ensure business continuity and compliance by implementing:
-
automated backups that continuously protect users, groups, roles, and policies.
-
Granular restore options, which allow you to recover specific objects instead of manually reconstructing lost data.
-
extended data retention, enabling compliance with industry regulations that require long-term identity data storage.
-
tamper-proof protection, ensuring backups remain secure even after cyberattacks or accidental deletions.
-
seamless integration with Microsoft Entra ID, minimizing disruption and simplifying backup management.
Without a backup solution, businesses risk losing critical identity data permanently and facing compliance violations. Start a free trial of this powerful solution today to ensure security, operational resilience, and regulatory compliance.
Optimizing Your Entra ID Investment for Long-Term Success
Start by assessing your organization’s IAM requirements. Consider the number of users, security policies, and compliance obligations to determine the necessary level of protection. If you operate in a hybrid environment, ensure Entra ID’s hybrid identity features integrate seamlessly with on-premises Active Directory.
Choosing the right Entra ID plan is key to balancing features and cost. Compare the Free, P1, and P2 tiers to determine which meets your security and compliance needs. If your organization already uses Microsoft 365 E3, E5, or Business Premium, evaluate whether the bundled Entra ID features provide better value than standalone licenses.
For enhanced security, consider Privileged Identity Management (PIM) and Conditional Access to enforce strict access controls. Understanding licensing models, including pay-per-user pricing and additional security tool costs, ensures a cost-effective solution.
To strengthen identity security, enforce Multi-Factor Authentication (MFA) for all users based on identity, device, and location. Regularly review user access permissions to prevent unauthorized access and implement Identity Protection with risk-based access controls for AI-driven threat detection. Conduct routine security audits to maintain compliance and adapt to evolving threats.
Final Thoughts: Eliminate Recovery Gaps with Entra ID Protection
Choosing the right Microsoft Entra ID plan is more than a pricing decision—it’s a strategic investment in security, compliance, and efficient identity management. Understanding the cost structure ensures your organization aligns features with business needs while maintaining cost-effectiveness. However, Entra ID lacks built-in backup and recovery capabilities, leaving your identity data vulnerable to accidental deletions, cyber threats, and compliance failures.
Without a comprehensive backup solution, businesses risk losing critical identity data permanently, facing compliance violations, and struggling with time-consuming manual recovery. Nexetic Backup for Entra ID bridges this gap with automated backups, granular restore options, and extended retention policies, ensuring business continuity and regulatory compliance. Its tamper-proof security safeguards your data even after cyber incidents, offering peace of mind in an unpredictable digital landscape.
Don’t wait for a data loss incident to expose the risks. Start your free trial today or contact our sales team to explore how Nexetic Backup for Entra ID can fortify your identity security strategy.
FAQ
What are the different Microsoft Entra ID pricing tiers?
Microsoft Entra ID offers four pricing tiers: Free, P1, P2, and Entra Suite. The Free plan provides basic identity management, while P1 adds Conditional Access and hybrid identity support. P2 includes advanced security features like Identity Protection and Privileged Identity Management. Entra Suite combines identity governance and Zero Trust security.
Which Microsoft Entra ID plan includes Conditional Access?
Microsoft Entra ID P1 and higher include Conditional Access. This feature allows organizations to enforce security policies based on user identity, device health, location, and risk levels, ensuring secure access to applications and resources.
What is included in Microsoft Entra ID P2?
Microsoft Entra ID P2 includes all P1 features plus Identity Protection, Privileged Identity Management (PIM), and advanced Conditional Access. It enables AI-driven risk detection, just-in-time access, and automated access reviews for security compliance. This plan is ideal for enterprises requiring enhanced identity security and governance.
Does Microsoft 365 include Microsoft Entra ID?
Yes, Microsoft 365 includes Entra ID in select plans. Microsoft 365 E3 and Business Premium include Entra ID P1, while Microsoft 365 E5 includes Entra ID P2. Organizations can also purchase standalone Entra ID licenses if additional features are needed beyond their existing Microsoft 365 plan.
What is the difference between Microsoft Entra ID P2 and Entra Suite?
Microsoft Entra ID P2 focuses on advanced identity security with Identity Protection and Privileged Identity Management. Entra Suite includes all P2 features plus Verified ID for decentralized identity verification, Permissions Management for cross-cloud security, and Zero Trust network access controls for comprehensive enterprise security.
