Microsoft has quietly added a new, no-cost layer to its Entra identity stack: Microsoft Entra ID Free, a tenant-level subscription that appears in billing accounts to surface tenant ownership, simplify tenant inventory, and provide an additional way to demonstrate and recover administrative control.
Microsoft’s identity portfolio has been evolving rapidly as identity becomes the primary control plane for cloud security and governance. The company’s Secure Future Initiative — a multi-year, cross-organization effort to harden Microsoft products and customer security posture — has driven several changes to how Entra (formerly Azure AD) is managed, audited, and recovered. As part of that push, Microsoft introduced the Entra ID Free subscription to link tenant identity ownership to billing accounts and to make tenant discovery and ownership verification more straightforward for customers.
This change is operational rather than a product-tier upgrade: Entra ID Free does not alter licensing for feature sets (P1/P2), nor does it add paid capabilities — it is designed to show up inside billing and subscription listings for clearer tenant ownership tracking. Microsoft says the subscription is automatically attached as part of standard tenant creation flows and remains present while the billing account is active.
This is a gradual rollout that Microsoft described publicly in its Entra communications and cost-management documentation; administrators who don’t see the subscription immediately should check their billing account type (for example, Microsoft Customer Agreement) and confirm the billing account is active.
Key operational notes for Group SOA:
For MSPs, this change reduces the friction of proving tenant ownership during support tickets and enables easier reconciliation of billing vs. technical ownership. However, MSPs must also tighten their billing-account controls to prevent lateral misuse.
However, it is not a silver bullet. The approach shifts more responsibility onto billing-account governance and raises questions about what “ownership” means in complex legal and partner arrangements. Additionally, public security analyses of Entra ID and associated integrations remind organizations that structural fixes to visibility must be paired with active hardening, monitoring, and incident response planning.
Microsoft’s Entra ID Free subscription is a pragmatic, low-friction attempt to solve one of the most persistent operational headaches for cloud administrators — finding and proving ownership of tenants — but it also re-centers the security and governance conversation on billing-account hygiene and identity defense-in-depth. Administrators should adopt the new subscription as a helpful tool, update their processes to reflect its existence, and pair the visibility gains with robust controls so the new artifact strengthens recovery and governance rather than introducing new attack vectors.
Source: Petri IT Knowledgebase Microsoft Entra ID Free Boosts Identity Management for Organizations
Microsoft’s identity portfolio has been evolving rapidly as identity becomes the primary control plane for cloud security and governance. The company’s Secure Future Initiative — a multi-year, cross-organization effort to harden Microsoft products and customer security posture — has driven several changes to how Entra (formerly Azure AD) is managed, audited, and recovered. As part of that push, Microsoft introduced the Entra ID Free subscription to link tenant identity ownership to billing accounts and to make tenant discovery and ownership verification more straightforward for customers. This change is operational rather than a product-tier upgrade: Entra ID Free does not alter licensing for feature sets (P1/P2), nor does it add paid capabilities — it is designed to show up inside billing and subscription listings for clearer tenant ownership tracking. Microsoft says the subscription is automatically attached as part of standard tenant creation flows and remains present while the billing account is active.
What Microsoft Entra ID Free actually is
The technical and administrative model
- A free subscription object tied to a billing account that represents the Entra tenant in billing/administration views. It surfaces in the Microsoft 365 Admin Center (Billing > Your products) and in the Azure portal under Cost Management + Billing > Products + services > All billing subscriptions.
- Inventory and ownership tracking. The subscription tracks tenants created with the same billing account so customers can maintain a running inventory of tenants and demonstrate ownership for recovery scenarios.
- No cost, no upgrade path. The subscription is free, cannot be canceled independently, is tied to the billing account, and cannot be transferred. It is not a pathway to Entra ID P1/P2 licensing; those are still separate paid licenses. Microsoft requires a credit card for identity verification when the free subscription is created.
- Persistent while billing account is active. The free subscription remains visible as long as the billing account remains active; customers cannot remove it if they still use Microsoft services tied to that billing account.
What capabilities are included at no cost
Microsoft defines the included baseline capabilities as the standard Entra free feature set:- User and group management
- On-premises directory synchronization
- Basic reporting
- Self-service password change for cloud-only users
- Single sign-on across Azure, Microsoft 365, and many common SaaS apps
Rollout and visibility
Microsoft rolled out the new subscription object starting with certain signup flows in December 2024 and expanded it across signup flows through early February 2025, with additional portal updates and documentation published since. The new subscription appears in the “All Billing Subscriptions” views in the Entra and Azure portals and on the “Subscriptions / Your products” page in the Microsoft 365 Admin Center. Administrators should expect to see it within their billing inventory without any tenant-level configuration.This is a gradual rollout that Microsoft described publicly in its Entra communications and cost-management documentation; administrators who don’t see the subscription immediately should check their billing account type (for example, Microsoft Customer Agreement) and confirm the billing account is active.
Why Microsoft did this — the intent and practical benefits
Microsoft frames the new subscription as part of the broader Secure Future Initiative to:- Improve tenant ownership clarity. Billing accounts are a stable, administratively scoped control plane for organizations and partner relationships; tying tenant representation to a billing account creates a visible ownership trail.
- Accelerate tenant discovery and recovery. The subscription can help organizations and managed-service providers keep an inventory of tenants created under a billing account and provide documentary evidence of ownership if administrative access is lost. Microsoft explicitly cites “proving tenant ownership” and assisting regain of administrative access as a goal.
- Simplify governance for MSPs and multi-tenant customers. For service providers and enterprises that create many tenants during onboarding, PoCs, or service pilots, a billing-centered view reduces the friction of tenant discovery and reduces orphan tenant scenarios.
The Group Source of Authority (SOA) context — cloud-first group management
A related — and operationally important — Entra capability rolling out in parallel is Group Source of Authority (SOA), which lets organizations convert a group’s authority from on-premises Active Directory Domain Services (AD DS) to Microsoft Entra ID so that the group becomes cloud-owned. This is a significant capability for organizations looking to consolidate group management in the cloud and retire on-premises group ownership. Administrators must use the latest versions of the Entra Connect sync clients (Connect Sync / Entra Connect Sync and Entra Cloud Sync) to ensure the SOA settings are honored and to avoid resync surprises.Key operational notes for Group SOA:
- When SOA is converted, the cloud object is marked to block on-premises sync for that object and becomes writable from the cloud.
- Cloud-to-on-prem provisioning is supported in scenarios where you deliberately provision cloud groups back to AD DS, but this requires careful scoping and SID reconciliation.
- There are limitations (no dual-write, nested group SOA conversion caveats) that require planning for complex group topologies.
Strengths: why this matters for IT teams
- Operational visibility at scale. Teams managing dozens or hundreds of tenants can now find tenants tied to a billing account more quickly in the portal, which reduces time to detect orphaned or shadow tenants.
- Practical recovery aid. When administrative access is lost — a common and high-impact operational problem — an audit trail that pairs a tenant subscription with a billing account can help Microsoft support validate ownership claims during recovery workflows.
- Better MSP and procurement alignment. Managed service providers and procurement teams often manage billing and subscriptions centrally; this feature aligns tenancy visibility with procurement ownership, simplifying audits and contract governance.
- Supports cloud-first group ownership. When paired with Group SOA, organizations can consolidate identity lifecycle tasks and reduce on-premises management overhead for groups, making migrations and decommissioning of AD DS simpler.
Risks and caveats — what IT leaders need to watch
While Entra ID Free addresses important operational gaps, it introduces or highlights several risks and governance questions:- Billing account security is now more critical. Because subscription ownership is tied to a billing account, attackers or insiders who can manipulate or gain access to a billing account can potentially affect the ability to prove tenant ownership or interfere with recovery narratives. Tight controls on billing account admin roles, MFA, and purchase permissions are essential.
- ‘Ownership’ vs. legal control. Microsoft’s subscription object is an operational artifact that helps prove ownership in Microsoft support workflows; it does not replace contractual or legal ownership definitions. Organizations should not assume billing-subscription presence equals immutable legal title. Treat the subscription as an operational control, not a legal title deed.
- Inability to cancel or transfer the free subscription. The subscription cannot be canceled while the billing account is active and is not transferable. For organizations reorganizing or divesting assets, this constraint requires process controls for billing account closure and careful support coordination with Microsoft.
- Dependence on a credit card for verification. Microsoft requires a credit card for verification of the free subscription. While this is routine for many cloud sign-ups, it adds a practical governance checkpoint and could complicate tenant creation for organizations that use procurement-only flows or centralized billing without individual credit cards.
- Entra security incidents underscore ongoing risk. Recent research and public reporting have highlighted critical vulnerabilities in Entra ID and its legacy integrations; identity remains a high-target attack surface. Cloud teams must therefore pair the new visibility features with hardened identity hygiene, rotation policies, and monitoring. Treat subscription visibility as one tool among many in the identity defense in depth strategy.
Practical checklist for administrators
- Secure the billing account owner and billing administrators with strict policies: least privilege, dedicated admin accounts, and strong MFA.
- Audit all billing accounts against tenant inventories to reconcile who owns what — use the Entra and Azure portal billing subscriptions view to enumerate Entra ID Free entries.
- Document tenant creation and procurement flows so every new tenant creation is tied to an accountable billing owner and an assigned technical owner. This reduces orphan tenant risk.
- For organizations with on-premises AD, plan Group SOA conversions carefully: run tests, update Entra Connect/Connect Sync to the latest supported version, and understand nested-group limitations.
- Build a recovery playbook that references the presence of the Entra ID Free subscription as evidence for Microsoft support interactions — include billing invoices, subscription IDs, and a documented escalation path.
- If you are an MSP, map tenants to billing accounts in your managed services documentation and configure alerts for new subscription entries so you can detect unplanned tenants early.
- Integrate identity posture monitoring and threat detection (Defender for Identity, Sentinel, or equivalent) to correlate tenant changes with suspicious activity — increased visibility is only useful if monitored.
Tooling and vendor ecosystem impact
Third-party vendors that manage hybrid identities and tenant inventories already provide discovery and auditing tools. Firms such as Cayosoft, which build management and monitoring suites around Entra ID and on-prem directories, will find the Entra ID Free object complementary: it provides an additional signal inside Microsoft’s billing plane that can be correlated against third-party inventories and change logs. Administrators should consider how new Microsoft telemetry and billing indicators can be incorporated into their existing governance tooling and runbooks.For MSPs, this change reduces the friction of proving tenant ownership during support tickets and enables easier reconciliation of billing vs. technical ownership. However, MSPs must also tighten their billing-account controls to prevent lateral misuse.
Policy, compliance, and audit implications
- Auditors: The existence of an Entra ID Free subscription provides auditors another artifact to validate tenant existence and billing alignment, which can simplify evidence collection during compliance reviews.
- Procurement: Procurement teams should update cloud procurement playbooks to include the requirement that new tenants are created under an approved billing account and that billing account ownership is recorded in contract documents.
- Legal: Legal teams should recognize that Microsoft’s billing-linked subscription is an operational control and continue to rely on contractual artifacts (agreements, invoices, MSA terms) for legal ownership or transfer scenarios.
Strategic assessment — balanced view
Microsoft Entra ID Free is a practical improvement: it reduces time-to-discovery for tenants, helps support and recovery workflows, and aligns tenancy visibility with the billing control plane that many organizations already manage tightly. For organizations struggling with tenant sprawl, orphan tenants, and MSP onboarding friction, this is a welcome addition to the Entra toolbox.However, it is not a silver bullet. The approach shifts more responsibility onto billing-account governance and raises questions about what “ownership” means in complex legal and partner arrangements. Additionally, public security analyses of Entra ID and associated integrations remind organizations that structural fixes to visibility must be paired with active hardening, monitoring, and incident response planning.
Final recommendations for Windows-focused IT teams
- Treat the Entra ID Free subscription as a governance and recovery asset: inventory it, log its subscription ID, and include it in change-control and recovery documentation.
- Lock down billing account access with enterprise-grade controls (MFA, conditional access, dedicated admin accounts) and monitor for privilege changes or new subscription creations.
- When migrating group management to the cloud, test Group SOA on non-production groups first, update Entra Connect/Connect Sync to the supported versions, and document rollback plans to avoid synchronization surprises.
- Coordinate procurement, legal, and technical teams so tenant creation follows a documented, auditable process that ties contracts, billing, and technical ownership together.
- Pair improved visibility with active security measures: conditional access, defender integrations, and regular posture audits remain essential because identity remains the primary target for modern attacks.
Microsoft’s Entra ID Free subscription is a pragmatic, low-friction attempt to solve one of the most persistent operational headaches for cloud administrators — finding and proving ownership of tenants — but it also re-centers the security and governance conversation on billing-account hygiene and identity defense-in-depth. Administrators should adopt the new subscription as a helpful tool, update their processes to reflect its existence, and pair the visibility gains with robust controls so the new artifact strengthens recovery and governance rather than introducing new attack vectors.
Source: Petri IT Knowledgebase Microsoft Entra ID Free Boosts Identity Management for Organizations