One of the most common things we see when reviewing Microsoft 365 environments is organizations paying for Azure Active Directory Premium Plan 1 and not using it.

Azure AD Premium is frequently added as a standalone license to environments running:

  • Microsoft 365 Business Standard
  • Microsoft 365 Business Basic
  • Office 365 E3

It typically costs about $7 per user per month as an add-on.

But in many cases, it’s sitting there completely unused.

Organizations purchase it because they know the Premium version must be better than the free version, or they believe they need it for multi-factor authentication.

But the reality is that most environments never go beyond very basic authentication.

The powerful capabilities inside Azure Active Directory Premium often remain unconfigured.

What Azure AD Premium Is Actually Designed For

When properly implemented, Azure AD Premium becomes the foundation for modern identity security inside Microsoft 365.

One of the most important features is Conditional Access.

Conditional Access allows organizations to define rules for accessing Microsoft 365 resources beyond simply entering a password.

For example, a login may require:

  • Multi-factor authentication
  • A compliant device
  • A trusted location
  • A verified user identity

Only when all conditions are met is access granted.

This dramatically improves security compared to traditional password-based authentication.

Moving Beyond Passwords

Azure AD Premium also enables organizations to move toward passwordless authentication.

Using Windows Hello for Business, users can sign in to their devices with:

  • Facial recognition
  • Fingerprint authentication
  • A device-specific PIN

These authentication methods are tied to the physical device being used.

Behind the scenes, Windows Hello uses a public/private key system to authenticate users without sending passwords across the network.

This significantly reduces the risk of credential theft and phishing attacks.

Additional Capabilities Many Companies Never Use

Azure AD Premium also enables several additional capabilities that are frequently overlooked:

Self-Service Password Reset
Users can securely reset their own passwords without involving IT support.

Device-based security integration
BitLocker recovery keys can be stored in Azure Active Directory, allowing encrypted devices to be recovered when needed.

User profile roaming
User settings and preferences can follow them across devices through OneDrive integration.

Single sign-on for third-party applications
Users can securely access external applications without managing multiple passwords.

Secure shared account access
Organizations can grant access to shared accounts without distributing the actual password.

The Real Problem

Most companies are already paying for these capabilities.

They simply aren’t configured.

Azure AD Premium is a powerful identity security platform, but without proper configuration it becomes just another unused license sitting in the Microsoft 365 portal.

And this is one of the reasons we frequently recommend Microsoft 365 Business Premium, where these capabilities are integrated into a broader security architecture that includes device management and endpoint protection.

Learn More

If you're evaluating how Microsoft Defender, Intune, and Entra ID work together to secure modern IT environments, you may want to review our overview of Microsoft 365 security architecture: https://www.xerillion.com/microsoft-365-it-security-modernization/?