Azure Active Directory B2B collaboration licensing guidance

Azure Active Directory (Azure AD) B2B collaboration extends a select set of existing Azure AD features to guest users invited into the Azure AD tenant. Azure AD B2B collaboration guest users are licensed through Azure AD Free, Basic, and Premium P1/P2 license tiers.

There is no charge for inviting B2B users and assigning them to an application in Azure AD. Also, up to 10 apps per guest user and 3 basic reports are also free for B2B collaboration users, since they are part of Azure AD Free tier. Paid Azure AD features extended to B2B guest users via B2B collaboration must be licensed with appropriate Azure AD licenses. An inviting tenant an Azure AD paid license can assign B2B collaboration user rights to an additional five guest users invited to the tenant.

Licensing examples

  • A customer wants to invite 100 B2B collaboration users to its Azure AD tenant. The customer assigns access management and provisioning for all users, but 50 users also require MFA and conditional access. This customer must purchase 10 Azure AD Basic licenses and 10 Azure AD Premium P1 licenses to cover these B2B users correctly. If the customer plans to use Identity Protection features with B2B users, they must have Azure AD Premium P2 licenses to cover the invited users in the same 5:1 ratio.
  • A customer has 10 employees who are all currently licensed with Azure AD Premium P1. They now want to invite 60 B2B users who all require multi-factor authentication (MFA). Under the 5:1 licensing rule, the customer must have at least 12 Azure AD Premium P1 licenses to cover all 60 B2B collaboration users. Because they already have 10 Premium P1 licenses for their 10 employees, they have rights to invite 50 B2B users with Premium P1 features like MFA. In this example, then, they must purchase 2 additional Premium P1 licenses to cover the remaining 10 B2B collaboration users.

There is no way yet to assign licenses directly to the B2B users to enable these B2B collaboration user rights.

The customer who owns the inviting tenant must be the one to determine how many B2B collaboration users need paid Azure AD capabilities. Depending on which paid Azure AD features you want for your guest users, you must have enough Azure AD paid licenses to cover B2B collaboration users in the 5:1 ratio.

Additional licensing details

  • There is no need to actually assign licenses to B2B user accounts. Based on the 5:1 ratio, licensing is automatically calculated and reported.
  • If no paid Azure AD license exists in the tenant, every invited user gets the rights that the Azure AD Free edition offers.
  • If a B2B collaboration user already has a paid Azure AD license from their organization, they do not consume one of the B2B collaboration licenses of the inviting tenant.

Advanced discussion: What are the licensing considerations when we add users from a conglomerate organization as “members” using your APIs?

A B2B guest user is one that is invited from a partner organization to work with the host organization. Typically, any other case does not qualify as B2B even it uses B2B features. Let’s look at two cases in particular:

  1. If a host invites an employee using a consumer address

    1. This scenario is not compliant with our licensing policies and is not recommended.
  2. If a host organization adds a user from another conglomerate organization

    1. In this case, the user is invited using B2B APIs, but this case is not traditionally B2B. Ideally, we should have these organizations invite the other orgs users as members (our API allows that). In this case, licenses have to be assigned to these members for them to access resources in the inviting organization.

    2. Some organizations may want to add the other org’s users to be added as “Guest” as a policy. There are two cases here:

      • The conglomerate organization is already using Azure AD and the invited users are licensed in the other organization: in this case, we don’t expect invited users to need to follow the 1:5 formula laid out earlier in this document.

      • The conglomerate organization is not using Azure AD or doesn’t have adequate licenses: In this case, follow the 1:5 formula laid out earlier in this document.

Next steps

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