Microsoft 365 Business Premium Tenants Get Azure Active Directory Premium P1

But What About Office 365 Customers?

Microsoft’s decision to bundle Azure Active Directory P1 in the Microsoft 365 Business plan creates some interesting questions for enterprise Office 365 customers.

Microsoft 365 Business, or Microsoft 365 Business Premium as the plan will be renamed on April 21, is the top-level offering in the Office 365 Business plans designed for small to medium businesses with fewer than 300 users. The other plans in this category are also renamed on April 21, meaning that we’ll have:

  • Microsoft 365 Business Basic ($5/user/month).
  • Microsoft 365 Business Standard ($12.50/user/month).
  • Microsoft 365 Business Premium ($20/user/month).

Two $20 Plans, Enterprise Tenants Come Second

The $20 price point for Microsoft 365 Business Premium is interesting. It’s the same as Microsoft charges for Office 365 E3, yet both the Office 365 E3 and the Office 365 E5 plans do not include Azure Active Directory Premium P1. If you want to use the features enabled by P1, you need to pay an extra $6/user/month.

Although it’s good that Microsoft is making the Azure Active Directory premium features more accessible to the SMB sector, it’s an undeniable fact that these features are equally if not more important in enterprise companies, who are forced to buy Office 365 E3 or E5 licenses.

Some Azure AD Premium Features Should be Available to All

I have long complained that tenants should have access to features licensed by Azure Active Directory Premium licenses such as those exposed through the Groups policy, like naming standards, default classification, and managing who can create groups in a tenant. All are functionality that should be available to any enterprise tenant.

Azure Active Directory Premium P1 goes further. You get Groups expiration, password self-service reset, dynamic groups, passwordless authentication (with FIDO keys), cloud app discovery, and conditional access policies. Gaining access to this functionality at no extra cost is fantastic for SMB tenants with Microsoft 365 Business Premium, but I think the need is higher in enterprise tenants.

Fair Play for Office 365 E3

Perhaps Microsoft considers this move to be a way to demonstrate their commitment to serve the SMB sector and make sure that these tenants can secure themselves better as more of their people work from home. I get and appreciate that view. But I believe that plenty of Office 365 E3 tenants could do with the same help. And if they’re paying the same monthly fee, shouldn’t these users get the same service from Microsoft?


Licensing is probably the least favorite topic for Office 365 administrators. We don’t like it either, but we cover licensing in the Office 365 for IT Pros eBook because we need to. No more needs to be said.

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6 Replies to “Microsoft 365 Business Premium Tenants Get Azure Active Directory Premium P1”

  1. Very true. As an E3 customer, I would love to have access to the P1 features – we do not have the budget for them as is. What is a good way to let Microsoft know?

    1. Have a chat with your local Microsoft sales rep. The more pressure that flows through the system, the more chance Microsoft might change.

  2. Thanks for this post. I was watching the S01E01 of Intune.Training on YouTube, and they mention Office 365 E3 includes AAD Premium P1 (then they correct later). I also noticed that used Group Based licensing successfully, while only having an Intune trial subscription, and nothing else. I headed over to here – https://docs.microsoft.com/en-us/azure/active-directory/fundamentals/active-directory-licensing-whatis-azure-portal#licensing-requirements – and it mentions Group-Based Licensing is available not only to AAD Premium subscribers, but also to just Office 365 E3 customers (among some others). This led me to wonder, does Office 365 E3 now include AAD P1? And thankfully, I ended up here to sadly confirm, no, no it doesn’t. Whomp whomp.

    Indeed O365 Enterprise E3 should include AAD P1. I guess that would narrow the gap between O365 E3 and M365 E3, so maybe this fact is a sticking point. In my opinion though, if Microsoft wants to make serious sales of E5 SKUs, they ought to AAD P1 into more hands that how it is today.

    The lack of AAD P1 availability for Enterprise customers pushes those enterprise customers to competitors like OKTA, DUO, and others. Those competitors are nice and all, but I just with MS would give us all AAD P1 instead (like they now have for SMB customers).

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