Azure AD vs Entra ID: what’s changed in 2025 for Small Businesses?

Microsoft Entra is now an umbrella identity platform that includes:

For most SMBs, Entra ID is the primary concern — the backbone of user authentication for Microsoft 365, Teams, Intune, and even third-party apps.

Free vs Paid Plans: 2025 Breakdown

Feature	Free	Entra ID P1	Entra ID P2
Single Sign-On (SSO)	✅	✅	✅
User/Group Management	✅	✅	✅
Security Defaults (MFA on all users)	✅	✅	✅
Conditional Access Policies	❌	✅	✅
Self-Service Password Reset (SSPR)	✅ (for cloud-only)	✅	✅
Hybrid Join (on-prem AD)	❌	✅	✅
Identity Protection (risk-based MFA)	❌	❌	✅
Privileged Identity Management (PIM)	❌	❌	✅
Access Reviews	❌	❌	✅
Pricing (2025 est.)	Free	~6 USD/user/month	~9 USD/user/month

The Free plan is still surprisingly useful for small teams using Microsoft 365:

However, it lacks Conditional Access, so you can’t enforce more granular policies like:

“Block access unless user is in Romania and on a compliant device.”

Entra ID P1 is often the sweet spot for SMBs in 2025. It unlocks:

Example use case: An SMB wants to allow Teams logins only from managed mobile devices — P1 is required.

This tier is usually overkill for SMBs, unless:

You manage multiple administrators and need PIM (just-in-time access)
You require Identity Protection to detect risky sign-ins and automate blocking
You need Access Reviews for compliance (ISO 27001, HIPAA)

It’s most useful for MSPs or SMBs working in finance, healthcare, or government sectors.

Licensing Notes (April 2025)

Microsoft 365 Business Premium now includes Entra ID P1
Microsoft is testing per-group conditional access licensing, expected late 2025
A new SMB-specific bundle (with Defender for Endpoint and Intune) is in preview.

Permanent