group license assignment office 365

Assign Licenses with Group-Based in Microsoft 365

I like to automate as much as possible, and one of those repeating tasks is license assignment in Microsoft 365. You can automate the creation of users. It’s even possible to assign a Microsoft 365 license with PowerShell. But a lot easier is group-based licensing.

The problem, especially with medium or larger organizations, is that you create the users in the on-premise Active Directory. New users need to be synced to Entra ID (which we can force), after which we can assign a license.

But the license assignment is then an extra manual step. You can of course build the license assignment in your PowerShell script, but group-based licensing is a lot easier.

In this article

In this article, we will take a look at how to set up group-based licensing in Microsoft 365, with both Microsoft 365 Entra ID and PowerShell.

Requirements

To use the group-based licensing feature you will need to have Microsoft Entra ID P1 or one of the following licenses Microsoft 365 Business Premium or Office 365 Enterprise E3.

Group-Based Licensing Office 365

There are a couple of options to set up group-based licensing in Microsoft 365:

Microsoft Entra ID

Microsoft 365 admin center.

I will show you all the different methods in this article. The advantage of PowerShell is that we can also easily add all the members to the group, that currently have a directly assigned license.

For each method, we will need to create a security group first. The license is assigned to all the users that are members of the security group.

If you have a hybrid environment, then I recommend creating the groups in your Active Directory. Otherwise, create the group in Microsoft Entra ID.

Creating the Security Group

To get started with Microsoft 365 group-based licensing, we first need to create groups to which we can assign the license. You can create the (security) group in your local AD or in Microsoft Entra ID. It’s also possible to use existing groups, like department groups that you may already have.

For Microsoft Entra ID you will need to log into Microsoft Entra Admin Center

• Expand Identity > Groups and choose All Groups
• Click New Group
• Set the Group type to Security
• Give the Group a name , for example, M365_E3
• Click on Create

Assign License to Group

With the group created, we can assign the Microsoft 365 license to it. As mentioned, there are a couple of ways to do this. Good to know is that you can assign multiple licenses to a single group. Personally, I prefer to create one security group per license. This makes it easier to manage your licenses and assign it to the users.

We are going to start with Microsoft Entra ID to assign the license to a group. In Entra ID we can follow two routes to assign the license, we can look up the group and assign the license, or look up the license and assign the group to the license.

I prefer the latter because, from the Licenses view, we can also check which groups currently have the license assigned, and check which users have the license assigned (both directly and inherently).

• Open Microsoft Entra ID
• Expand Billing and choose Licenses
• Click on All Products
• Select the license that you want to assign
• Click on + Assign

Note You can also assign multiple licenses to a single group. To do this, select the licenses and click on + Assign

We can now assign one or multiple groups to the license.

• Click on + Add Users and Groups
• Search and select the security group that you want to assign
• Click on Select

In the Assignment Options tab, we can choose which products we want to assign. For example, if you don’t want to enable Avatars for Teams, you can disable it here, so the product won’t be available for the users. When done click on Review + Assign .

Review Assignment

As mentioned earlier, we can review the assignment in the Licenses view. Click on the product in the Licenses > All Products view . Here you can view the licensed users, and if they have a directly or inhertily assigned plan. And you can view the Licensed groups.

Configuring Group-based licensing is also possible in the Microsoft 365 Admin Center. What I like about the Microsoft 365 Admin Center method is that it will tell you when you don’t have enough licenses for a group. Something we don’t see when using Entra ID or PowerShell for example.

• Open the Microsoft 365 Admin Center
• Expand Billing and select Licenses
• Click on the license that you want to assign to a group
• Open the Groups tab
• Click on + Assign Licenses
• Search the group name and select the group
• Optionally, expand Turn apps and services on or off and deselect any app or service that you don’t want to use.
• Click on Assign

We can of course also use PowerShell to configure group based licensing in Office 365. To do this, we are going to the Microsoft Graph PowerShell module. Make sure that you have installed it, otherwise, check out this article for more information.

First, we need to connect to Microsoft Graph. We will need to use the scope Directory.Read.All:

If you haven’t created the group yet, then we can also use Microsoft Graph to create the security group:

To assign the license to the group, we will need to know the SKU Id from the license that we want to assign. To find the SKU Id, we can use the PowerShell cmdlet below. You can list all licenses with the -All parameter, or you can search on a specific license using the -Search parameter, followed by the propertyname and value:

Now we only need to know the Group Id so we can assign the license to the correct group. To find the group id, we are going to use the Get-MgGroup cmdlet. Again we will be using the -Search parameter to search on a part of the group name, and in this case we also need to use -ConsistencyLevel eventual :

To assign the license to the group, we will be using the Set-MgGroupLicense cmdlet. Here we add the GroupId and the SKUId of each license that we want to assign to the group. We don’t want to remove any licenses from the group, so leave the -RemoveLicenses parameter emtpy:

Adding Users to the Group

With the licenses assigned to the groups, the last step is to assign the users to the groups. We can do this of course manually in the Microsoft 365 Admin Center, Microsoft Entra ID, or in case of a hybrid environment in the Active Directory. I am not going to show how you add a user to a group manually because you probably know how to do that ;).

But what I want to show you, is how you can automate it.

One of the methods I really like to use is the Dynamic Group Membership option. This way users are added to a group based on one or more of their attributes, like Office, Job title, Department, etc.

Another option is to convert directly assigned licenses (manually assigned) to group-based.

Dynamic Group Membership

This method only works with cloud-based groups, created in Microsoft Entra ID (or the Microsoft 365 Admin Center).

• Open Microsoft Entra Admin Center
• Expand Identity > Groups and select All Groups
• Look up and open your license group

• Click on Properties
• Change the Membership Type from Assigned to Dynamic User
• Click on Save

We now need to create the query that will automatically add the users to the group. For the query, you can use all kinds of user properties.

• Open the Dynamic membership rules
• Select a Property (for example, jobTitle)
• Set the Operator to Equals
• And a job title to match the Value
• Click Save to create the rule

The expression builder allows you to create the most needed rules. But if you want to create some more advanced rules, then click the Edit (11) button and write a custom rule. For example, to

Moving users from Directly assigned to Group-Based

When you have set up group-based licensing, you probably want to migrate your directly assigned licenses to groups-based as well. To do this, we are going to use PowerShell.

We will be using the Microsoft Graph PowerShell module for this because the Msol module is being depreciated.

The first step is to get the SKU Id from the license that you want to change to group-based. Next, we want to get all the users that have the license assigned (directly or inherently). We also need to look up the group id of our license group.

With this information, we can go through all the users, check if they have a directly assigned license, add them to the group, and remove the directly assigned license.

Wrapping Up

You can assign users to multiple groups, so you could create a base group with Microsoft 365 E3 for example, and a separate group with PowerBI Pro. Using multiple groups, and each group for one license gives you more flexibility when it comes to assigning licenses to the user in Microsoft 365.

Using Office 365 Group Based Licensing is easy to set up and takes way another manual step in creating and managing your users.

If you have any questions, just drop a comment below.

You may also like the following articles

Creating an Asset Library in SharePoint

Getting Started with Microsoft Entra Internet Access

How to use the Microsoft Entra PowerShell Module

37 thoughts on “assign licenses with group-based in microsoft 365”.

Is it possible to use the rules within group-based licensing to look at the ActiveUnits SKU, and if it’s 0, to move the user to a different group with different licensing? For example, I have two group-based licensing groups: one to assign E1 and another to assign E3. If we add the user to the E1 group-based license but there are no more licenses available, can we use the rules to move the user to the E3 group-based licensing?

Just to note, I have updated the article, now using the Microsoft Graph module.

To answer your question, this is posibble, you will need to get the amount of licenses bought, and consumed and work from there:

Good afternoon, everyone:

There is another point to bear in mind as of January 2024.

From what I’m reading in Microsoft’s documentation ( https://learn.microsoft.com/es-es/entra/fundamentals/concept-group-based-licensing ) and I understand, you need to have Azure Entra ID P1 or P2 if your 365 licenses are not Premium or E3.

A shame and a lot of cash

What about UsageLocation which can’t be specified with the group? How would we assign this? Some Licenses depend on this, and all licenses is not availble in certain countries.. 🙁

You will need to set the location of the user in Azure AD:

– Sign in to the Azure portal in the User Administrator role. – Go to Azure AD > Users and select a user. – Select Edit properties. – Select the Settings tab and enter a location for the user.

Hi Rudy, I figured out you can automate this in AzureADConnect to automatically full this in based on the attribute ”c”, since it’s a common thing for Servicedesk/HR to fill out 🙂

Hi! Did all the steps. It all worked out. Great article!

But I don’t understand how to make when adding user to local group(AD on-prem) “License O365 E3” user will be added also to cloud group(Azure AD) and get license.

That is, tech support engineers don’t have access to Azure, but have access to local AD. I want them to be able to assign licenses from local AD.

If you have created the groups in Local AD, then they should be available in Azure AD for the assignment. You should then be able to follow the steps under “Office 365 Group-Based Licensing”

-Created a group in AD. -Synchronized it, it appeared in Azure -Added a user (AD) to the group -Synchronize it with Azure

The user did not show up in that group in Azure.

What am I missing?

That is odd, sounds like an issue with Azure AD Connect. Might be worth to double check the settings and check for errors.

You wrote: “But what if you are out of licenses? You will first need to increase the number of licenses or even order extra through your MSP or finance department. That takes time.”

This step is not omitted? If too few licenses are available, they are not automatically purchased. Even with a group assignment, enough licenses must be purchased. This cannot be automated …?

No, not that I am aware of. As far as I know, Microsoft requires human interaction to purchase licenses. Otherwise, your script could accidentally buy 1000 licenses for example.

Hi, I am using Power Automate to create a user and assign to group so that it will add the license automatically. However, it won’t generate any error if the license is not assigned because of license shortage. How can we set Azure to increase the number of license automatically? Or, at lease generate an error so that Power Automate can pick it up. Thank you.

I think your best option here is to first check how many licenses you have available and if that is 0 then send an email to purchase additional licenses. As far as I know you can’t purchase licenses through PowerShell.

Hello, Can we use PowerShell to configure Office 365 Group Based Licensing. I cannot find any option to assign a licenses to a dynamic group i created.

New-AzureADMSGroup -DisplayName “Dynamic Group 01” -Description “Dynamic group created from PS” -MailEnabled $False -MailNickName “group” -SecurityEnabled $True -GroupTypes “DynamicMembership” -MembershipRule “(user.department -contains “”Marketing””)” -MembershipRuleProcessingState “On”

Please is it possible to assign one license to two or more Azure AD Group? Thanks

Yes, you can repeat step 5 of “office 365 Group Based Licensing”

Hi Rudy Mens, after running the script for on-premise Active Directory, all Users get the Migrate state “False”. Do you have any advice?

Did you check the Get-MsolAccountSku result that it matches the AccountSkuId on line 2 of the script?

Great article! Will this work with nested groups (AD groups synced from AD to Azure)?

Yes, that’s exactly how I am using it as well. Users are members of a group in the local AD.

Sorry, I wasn’t clear – I meant nested local AD groups synced to Azure. Let’s say User1 is a member of Group3, Group3 is a member of Group2, Group2 is a member of Group1. Licenses allocated to Group1. Will User1 get license allocated? Looks like it didn’t work for me and licenses allocated only to direct members of the group.

Ah yes, that is indeed a good question. I have no idea if that will work, will have to test it out as well.

OK, nested groups won’t work 🙁

“Group-based licensing currently does not support groups that contain other groups (nested groups).”

https://docs.microsoft.com/en-us/azure/active-directory/enterprise-users/licensing-group-advanced

Bummer, thanks for sharing!

in the azure script is a little error. The line: try { # Try to add the user to the new group Add-MsolGroupMember -GroupObjectId $groupId -GroupMemberType User -GroupMemberObjectId $user.ObjectId -ErrorAction stop

Should be: try { # Try to add the user to the new group Add-MsolGroupMember -GroupObjectId $groupId.ObjectId -GroupMemberType User -GroupMemberObjectId $user.ObjectId -ErrorAction stop

Thx for the post!

Hi, This works well but how can we prevent users do become member of two groups. For example Microsoft Business Premium and Office E1?

You can first get all the existing users with one of the licenses and check if the user isn’t present in one of the two lists.

With the code below you can get all users with a specific license # Get all users with the Office 365 E3 license $msolUsers = Get-MsolUser -EnabledFilter EnabledOnly | Where-Object {($_.licenses).AccountSkuId -eq 'lazydev:enterprisepack'} | Select DisplayName,UserPrincipalName,ObjectId

Wondering if you have tried using powershell to assign a license to a group or is it only done through the GUI

I haven’t done that. You can assign a license to a user w ith PowerShell though

We have Office 365 E3 licenses. Do you happen to know if this will work for them? The documentation says “Office 365 Enterprise E3” which I think it technically different.

This will work with every Office 365 license

Group based, when you have 9 on-prem forests syncing to one tenant,each with different particularities

You can create different license groups in Azure. To assign the users to their groups you will need to use filters to select the correct users from the Active Directory.

How would you do this when merging 10 entities, 9 on-prem and one cloud to a single tenant?

Do you mean how to assign the licenses to the users?

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Assign Microsoft 365 licenses with group-based licensing

• Updated on March 6, 2024
• Microsoft 365 , Microsoft Entra

What is an excellent way to manage and assign Microsoft 365 licenses? If you have a small organization with a few users, you can assign Microsoft 365 licenses directly to the user. If you manage a large environment and want structure, your best way is to assign Microsoft 365 licenses with group-based licensing. In this article, you will learn how to configure group-based licensing.

Table of contents

Assign microsoft 365 license directly to user, microsoft entra id group-based licensing, microsoft entra id group-based licensing requirements, 1. create security groups on-premises, 2. sync security groups to microsoft entra id, 3. verify security groups in microsoft entra id, 4. assign microsoft 365 licenses to group, 5. add user to security group, 6. verify license assignment paths.

If you don’t have many users in the organization, you can assign the Microsoft 365 license directly to the user:

• Sign in to Microsoft Entra admin center
• Expand Identity > Users > All users
• Click on the user
• Select Licenses
• Click + Assignment
• Select the License
• Check which license options you want to assign to the user

When you assign a Microsoft 365 license directly to a user, the Assignment Paths column shows that it’s Direct assigned.

A better situation is to create groups, and manage the Microsoft 365 licenses from there. How will that work? Let’s see in the next step.

Microsoft Entra ID includes group-based licensing, which allows you to assign one or more product licenses to a group. Microsoft Entra ID ensures that the licenses are assigned to all members of the group. Any new members who join the group are assigned the appropriate licenses. When they leave the group, those licenses are removed. This licensing management eliminates the need for automating license management via PowerShell to reflect changes in the organization and departmental structure on a per-user basis.

Read more: What is group-based licensing in Microsoft Entra ID?

You must have one of the following licenses to use group-based licensing:

• Paid or trial subscription for Microsoft Entra ID P1 and above
• Paid or trial edition of Microsoft 365 Business Premium or Office 365 Enterprise E3 or Office 365 A3 or Office 365 GCC G3 or Office 365 E3 for GCCH or Office 365 E3 for DOD and above

How to configure group-based licensing in Microsoft Entra ID

Go through the below steps to set up group-based licensing in Microsoft Entra ID:

We recommend you create a base group, which you will assign the must-have Microsoft 365 products. Create other groups for products that not everyone needs to use.

If you have everything in the cloud, create the security groups in Microsoft Entra ID. Suppose you have a Hybrid environment, create the groups in on-premises AD.

In this example, we will create two groups in Active Directory Users and Computers:

• M365_Licenses_E3_Base
• M365_Licenses_E3_Exchange

The security groups will look as below.

• Sign in on the Azure AD Connect server
• Start the Azure AD Connect application
• Verify in Azure AD Connect that the OU where you placed the security groups is enabled for syncing

• Wait a maximum of 30 minutes, and it will synchronize the objects or speed up the process and Force sync Azure AD Connect by running the below command

To verify that the security groups appear in Microsoft Entra ID, follow the below steps:

• Expand Identity > Groups > All groups
• Search for the on-premises security groups
• Verify that the on-premises security groups appear in the list

To assign a Microsoft 365 license to a group, follow these steps:

• Click on the group
• Click Licenses > + Assignments

In our example, it’s the group M365_Licenses_E3_Base .

• Select the license
• Check which license options you want to assign to the group

• Do the same, but this time add the group M365_License_E3_Exchange
• Select the license option Exchange Online (Plan 2)

To add the user to the security group, follow the below steps:

• Start Active Directory Users and Computers
• Add a user to the group M365_License_E3_Base

• Force sync with Microsoft Entra ID
• Click on Members and verify you see the synced user in the list

• Verify that Inherited (group name) appears in the column Assignment Paths

Note: An excellent method to check the Assignment Paths is with PowerShell. Read more in the article Check Microsoft 365 user license is direct assigned or inherited from group .

Everything looks great!

You can assign Microsoft 365 licenses in bulk by adding all the users to the security group on-premises.

In the next article, we will look at Exchange Hybrid test plan .

You learned how to assign Microsoft 365 licenses with group-based licensing. This setup will help user management and licensing for every organization significantly. There are no more challenges when assigning licenses, and everything is organized in groups.

Did you enjoy this article? You may also like the Exchange Hybrid course . Don’t forget to follow us and share this article.

ALI TAJRAN is a passionate IT Architect, IT Consultant, and Microsoft Certified Trainer. He started Information Technology at a very young age, and his goal is to teach and inspire others. Read more »

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Hi, I am looking for a similar Group based licensing, but for cloud only accounts. Can you suggest a way in which we can do that through Dynamic Grouping?

You can check below document where Dynamic grouping is explained also you need to create Security group with “Membership type” is “Dynamic user”

Docs: https://learn.microsoft.com/en-us/azure/active-directory/enterprise-users/groups-dynamic-membership

I did not had this configured. Now I do. This will help a lot. Thanks.

Your attention to detail is perfect. Great work as always.

Just what I needed. So much easier to manage. Thanks!

I ask out of curiosity .

1. I created a group “Communication_Basic” with Business Basic licenses with plan: Exchange, MS Teams and SharePoint 2. I added user to that group and after while he got Business Basic license with Exchange, Teams and SP.

And question is –

3. If I want assign another (additional) license for user – for example Whiteboard – the group assign licenses won’t override this and remove that licenses?

Greetings, Przemek

Hi Przemek,

You can’t assign the “Whiteboard” license directly to the user because the licenses section is greyed out and shows the message:

“This is inherited by group-based licensing and can’t be changed here. Manage group-based licenses in the Azure portal.”

It’s best for you to:

1. Create a new security group. For example, give it the name “Communication_Whiteboard”. 2. Assign the license “Whiteboard” to the group that you created in step 1. 3. Assign the security group to the user.

The user will have “Communication Basic” assigned licenses and “Communication_Whiteboard” assigned license. These are the licenses for Exchange, MS Teams, SharePoint, and Whiteboard.

It’s the same example as I did in the article. Only I used Exchange Online instead of Whiteboard.

Thanks for reply. Great blog by the way

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Office 365 Group-Based Licensing & License Assignment

Published: 31 October 2019 - 9 min. read

• Azure Active Directory

Dustin Dortch

Read more tutorials by Dustin Dortch!

Table of Contents

If you’re struggling with figuring out how to manage Office 365 user licensing at scale, look no further! You can now manage Office 365 user licensing by a group with Azure Active Directory (AD) group based licensing with Office 365!

Office 365 group based licensing allows you to standardize licensing applications by managing them in groups rather than by individual users. This can soon turn into a huge time-saver for admins! With a seemingly never-ending rollout of Office 365 services, you owe it to yourself to manage licenses in bulk.

Azure AD Group-based licensing is a system of implementing a licensing template that is assigned to users through group membership. Unlike manual license assignments that can be performed in the Microsoft 365 Admin Center, all portal-based tasks must be performed in the Azure AD portal .

In this article, you’re going to learn how Office 365 licensing works today and then how you can save a lot of time and management headaches with Azure group-based licensing.

Let’s get started!

Licensing Office 365 (The Hard Way)

Office 365 consists of a suite of services like Exchange Online, SharePoint Online, and Skype for Business Online, among others. Each service can be licensed individually by the user.

Related: Azure AD Premium P1 vs P2: Which One to Choose?

Individual Licenses

For example, let’s say you have purchased an Exchange Online Plan 1 license product. You’d like to allocate a user license to that product using a single Exchange Online mailbox.

In the Microsoft 365 Admin Portal , you’d click on Assign as shown below to apply the Exchange Online Plan 1 license product to the mailbox.

The above example is for one product – Exchange Online . But licensed products also come in suites with the Microsoft or Office 365 E3 license product, for instance.

Suite Licenses

When assigning a suite license, the individual services can be controlled as you can see below. Here you can apply license products to the mailbox at once.

Using PowerShell May Work But Comes with Drawbacks

At some point, an organization may then need to update user licenses. They then may turn to PowerShell. Although a PowerShell script is certainly a solution, it’s not as simple as one might expect.

Even if you know how to write PowerShell code, you’ll still be faced with a confusing list of various PowerShell modules to use like MSOnline, AzureAD, AzureADPreview, and Az. Which one do you use in which circumstance? It’s not entirely clear. All work similarly.

The hardest part is figuring out which PowerShell cmdlets in these modules map to options in the Microsoft 365 Admin Portal. Inside PowerShell, you’ll see cryptic names like Deskless for Office Online . These names are not in the Microsoft 365 Portal.

To assign and remove user licenses with PowerShell, you’d have to find license SKUs, build a list of license options by navigating those cryptic names, and more. There is no simple cmdlet (within these modules) to easily enable and disable user licenses.

Although this approach works, it will mean writing a lot of PowerShell code which comes with its own set of management challenges.

Azure AD group-based licensing removes the requirement to get into the weeds with PowerShell and simplifies the license management process.

Licensing with Office 365 Group Based Licensing

To forego the challenges of managing user licenses individually or using PowerShell, let’s dive into how to manage licenses via groups via Office 365 group based licensing.

Prerequisites

If you plan to follow along with the following demonstration, know that you will need to meet a few prerequisites. You’ll first need to ensure you’re in an organization with the following licenses (paid subscriptions or active trials):

• Azure AD Premium P1, or higher
• Office 365 E3  license (or equivalent), or higher
• Enterprise Mobility + Security E3, or higher (includes Azure AD Premium P1)
• Microsoft 365 E3, or higher (includes both Office 365 E3, or higher and Enterprise Mobility + Security, or higher)

In addition, each user that has licenses applied via Office 365 group based licensing must have licenses for the product to be assigned.

Licensing Requirements

Office 365 group based licensing is only available for organizations with the following licenses (paid subscriptions or active trials):

• Office 365 E3 license (or equivalent), or higher

In addition, each user that has licenses applied via Office 365 group based licensing must have licenses for the product to be assigned and the previously mentioned licensing to support group-based licensing.

License requirements for Office 365 group based licensing present a “chicken and egg” problem. The prerequisite licenses must be available, but without having assigned the licenses, the users do not have the required license assigned. To account for this problem, Azure AD Group-based licensing is enabled tenant-wide as soon as subscriptions that meet the licensing requirements exist.

To remain in the spirit of the license, only the number of users that will be assigned one of the required licenses should have group-based licensing applied.

If, for example, 300 Office 365 E3 licenses exist (and no Azure AD Premium licenses exist), then only 300 users should be licensed via group-based licensing. There is no control that prevents exceeding the limits, so self-auditing is recommended to ensure tenants remain in compliance.

More information on licensing requirements can be found on Microsoft’s licensing requirements page.

Azure AD Group-Based Licensing How-To Walkthrough

To implement Office 365 group based licensing, you must perform the following four rough steps:

• Create a group in Azure AD (synchronized, on-premises group, or a group only in Azure AD)
• Choose a license to apply
• Choose the license options to apply
• Select the applicable group(s) to apply the license settings

Related: How to Force Azure AD Connect to Sync [Walkthrough]

Once these steps have been done, licenses can be applied in a consistent manner to users by assigning them to the appropriate groups.

Let’s now get our hands dirty and walk through a simple example of how to implement Office 365 group based licensing!

Creating an Azure AD Group

The first task you’ll need to do is create a group. This is the group you’ll eventually use to assign licenses to members inside of the group.

The following steps are displayed in the next screenshot.

• To get started, ensure you’re logged into the Azure AD Portal .
• In the portal, navigate to Azure Active Directory —> Groups.
• Click New group .
• Assign the Group name as E3 Standard . You can choose any group name you wish.
• Click Members to add the desired members, select the desired users and click on Select .
• Click Create to confirm the creation of the group.

Assigning Office 365 License to the Azure AD Group

Once the group is created, it’s time to assign product licenses to the group. The following steps are displayed in the next screenshot.

• While still in the Azure AD portal, navigate to Azure Active Directory —> Licenses —> All products .
• Check the product to license as Microsoft 365 E3 or another product.
• Click Assign .
• To choose the assignment group, click Users and groups .
• Select E3 Standard or the name of the group created earlier.
• Click Select .
• Click Assignment options .
• Toggle the desired options.
• Click Assign as seen below.

More information can be found on the Assign licenses to users by group membership in Azure Active Director y page.

If a user is assigned to multiple groups the various SKUs and options will be added together to form to total license assignment for the user.

Direct vs. Inherited Licensing

A key concept for Office 365 group based licensing is Direct versus Inherited licensing. If a user has had licenses assigned manually, these are known as direct assignments, and Azure AD Group-based Licensing will not override these. Reviewing a member of a group that has had directly assigned and licenses inherited, you can see below.

Removing Office 365 Licenses

For Office 365 group based licensing to be effective, direct-assigned licenses should be removed such that any changes to assignment options are handled with consistency via a group assignment. Any inherited assignments will remain, so the previous redundancy works to transition the user to group-based licensing seamlessly.

When users are assigned a license both directly and via inheritance, the redundant direct license assignment must be removed. To do so, in the Azure AD Portal:

• Navigate to Users .
• Select the user to modify.
• Click Licenses .
• Click on the license to remove.
• Click Remove license .

You can see in the below screenshot what this will look like from steps five and six.

After a few moments, only the inherited license remains, as seen below.

For more information, refer to the Microsoft page on How to migrate users with individual licenses to groups for licensing .

After the direct licenses have been removed, users will be managed entirely through groups-based licensing.

Removing Groups with Group-Based Licensing

As a fail-safe mechanism, a group involved in Office 365 group based licensing cannot be removed until all licenses assigned handled by the group are removed. This is to prevent inadvertent license removal that would result in users being unable to perform work.

In order to remove a group, follow the below steps:

• In the Azure AD Portal navigate to Azure Active Directory —> Licenses —> All products .
• Check the product to license Microsoft 365 E3 .
• Check the group to remove.
• Click Yes .

You can see what steps four through six looks like below.

Now the group may be removed. Be mindful of any other potential conflicts that removing licensing from a group could create, like with dependent products.

Remediating Licensing Issues

As with direct licensing, where the admin portal displays errors in applying licenses, groups-based licensing can encounter the same circumstances which must be reconciled.

When licensing issues occur with groups-based licensing, administrators are not interactively working with the portal or PowerShell and will need to become informed of such issues. Licensing issues can be identified in the Azure AD portal under the licensing section, as seen below.

Conflicting Licenses

Some subscriptions have conflicting versions of licenses that cause a failure to occur when applying licenses. This failure happens when manually assigning licenses and using Office 365 group based licensing at the same time.

When you assign the Exchange Online Plan 1 license and there is an attempt to assign a license that includes Exchange Online Plan 2 , or SharePoint Online Plan 1 and SharePoint Online Plan 2 is a great example. The licenses will conflict with each other.

To resolve this issue, refer to the above steps on removing the direct assignment that causes the conflict or, if necessary, removing the group-based membership.

This situation can be tricky to navigate if the combination of assignments is necessary to get a complete licensing profile assigned to a user.

No Unassigned Licenses are Available

Even though you do everything right you might still end up in a situation where you simply run out of licenses to assign. As mentioned in the Prerequisites section, each license applied via groups-based licensing must be available within the tenant’s subscriptions.

If there are 30 users, for example, in a group being assigned an Office 365 E3 license but there are only 25 licenses for that SKU, there will not be enough unassigned licenses to fulfill the settings applied through groups-based licensing. You can see an example of this situation below.

Unmet Dependencies

Certain licenses depend on other licenses being applied. For instance, individual licenses for PSTN service for Skype for Business and/or Microsoft Teams require all users to have the underlying products assigned.

In this instance, if a user is not assigned options for Skype for Business or Microsoft Teams, any PSTN licenses applied will result in an unmet dependency which but be remediated prior to any PSTN functionality being available to the assigned users.

Unassigned Usage Location

Before a user can be assigned any licenses, a usage location must be selected. The usage location is used when legal or regulatory mandates exist that restrict certain products from being used. If no usage location is assigned, the tenant location will be assigned as the usage location with groups-based licensing. While this allows the user to function, it could result in legal or regulatory ramifications.

With a direct license assigned, an error would be presented rather than automatically assigning the tenant location as the usage location.

Reprocessing Users

After remediating any licensing errors, users may still not be in a proper license assignment. In such an event, it is necessary to force the reprocessing of license assignments.

To reprocess licensing for a user:

• Select the user to reprocess
• Click Reprocess .

More information can be found at the Identify and resolve license assignment problems for a group in Azure Active Director y Microsoft docs page.

Azure AD Group-based licensing can contribute to the consistent assignment and updating of product licensing within Office 365. In addition, it can be part of a mature provisioning process; such a process may begin with user creation in Active Directory, synchronization to Azure AD, provisioning an Exchange Online mailbox via the on-premises Exchange Management Shell, and assigning licenses through Office 365 group based licensing.

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• Programming
• Virtualization
• Productivity

Assign Office 365 Licenses with Active Directory Groups

In this post I will walk through the options of assigning Office 365 Licenses based on Active Directory Group membership. Microsoft recently released the new feature in Azure Active Directory which allows you to apply Azure licenses, as well as Office 365 licenses based on group membership.

To get started and make use of this feature in Azure Active Directory an Azure Active Directory Premium Plan subscription needs to be enabled.

For the purpose of this demonstration I have created a 30 Day trail of Azure AD Premium. I have also already configured Microsoft Azure Active Directory Connect to sync my groups and users to Azure AD. Tool can be downloaded here .

To get started I have created the following group in my On-premises Active Directory and this group has been synced to AZ AD.

Now connect to your Azure AD Portal  link , then navigate to Azure Active Directory.

On the right hand side under "Quick tasks" click on "Find a group" and then click on the newly created and synced group.

On the overview page of the selected group we can see that there is two users part of the newly created group.

Next lets go ahead and click on Licenses on the left hand side menu.

In the "License Assigning" menu , click "Configure required settings".

Then select the available licenses. For this post I have Office 365 Enterprise E3 licenses and I will be selecting those and then clicking select at the bottom on the Menu.

On the Assignment menu, select which options you do not want to assign to users of this group and then click OK.

Once back on the "Assign License" menu, click on "Assign" at the bottom of the menu.

Next we can see that the licenses are now available and assigned to the group.

Now that the licenses have been assigned to the Active Directory group, lets connect to Office 365 and verify that the licenses have been assigned to the two mentioned users in the group.

Connect to the Office 365 Admin Portal .

Once connected to the Admin portal, go to "Users" then "Active users" and then from the Menu on top, select "Views > Licensed users"

As you can see, the two users have been synced and the Office 365 License has been assigned to the Users.

With this option available, it makes it easy to configure and provision Office 365 mailboxes, as well as configuring different groups, which will allow users to have access to different types of online services.

Hope that these steps will be as beneficial for some as they were for me. Configuring Azure and Office 365 Licenses based on groups freed up my time to do something else.

# ThatLazyAdmin

• https://www.experts-exchange.com/articles/30750/Assign-Office-365-Licenses-with-Active-Directory-Groups.html copy
• Microsoft 365
• Active Directory

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Auto-Assign Licenses with Group-based Licensing in Microsoft 365

Dealing with the nuances of license management within Microsoft 365 has long been a challenge for administrators. The complex task of assigning and transferring licenses to each user individually can lead to inefficiencies and errors that hamper overall productivity. However, the solution lies in a game-changing approach called group-based licensing . By creating groups based on users’ roles, departments, or teams, this innovative feature provides a streamlined way to manage licenses. This task can be accomplished with the Azure portal (Entra admin center) or PowerShell. 

Let’s dive into the nitty-gritty of improved license management and 🔎 explore the possibilities of group-based licensing.

What is Group-based Licensing in Microsoft 365?

Group-based licensing allows you to assign one or more license subscriptions to a Microsoft 365 group. Licenses assigned to the group are added to everyone who is added to the group, and the licenses are removed when they are removed from the group.

Prerequisites For Group-based Licensing

Your organization must meet the following prerequisites to process the group-based licensing. 

• Microsoft 365 Business Premium 
• Office 365 Enterprise E3 
• Office 365 A3 
• Office 365 GCC G3 
• Office 365 E3 for GCCH 
• Office 365 E3 for DOD and above 

Note: You must be a license administrator, user administrator, or global administrator to utilize group-based licensing.

Set Up Group-based Licensing in Microsoft 365

Setting up group-based licensing in your Microsoft 365 environment is a straightforward process. Microsoft 365 Admins can set it up with any of the following methods.

• Create a group-based license in Azure portal  
• Assign group-based licensing using PowerShell  

Note: Admins must specify the usage location of the user, before assigning a group-based license. If not, the usage location will inherited from the location of the directory.

Create a Group-based License in Azure Portal

To create a group-based license in the Azure portal, you need to follow the below two steps. 

• Create a group in the Azure Active Directory  
• Assign licenses to groups in Azure AD  
• Verify group-based license assignment  
• Check Microsoft 365 license assignment path  

Create a Group in the Azure Active Directory

The first step for the creation of a group-based license is to create a group in the Azure Active Directory. To create a group using the Entra admin center follow the steps below. 

• Log in to the “ Azure portal ” and head to the “ Azure Active Directory ” (Entra ID). 
• Navigate to the “ Groups ” tab and select the “ New group ” option. 
• Select the respective “ Group type ” and enter the “ Group name ”. 
• Click on “ No members selected ” and go to the “ Users ” tab. 
• Select the required users to assign group-based licenses. 
• Click on the “ Select ” button and select the “ Create ” button.

Assign Licenses to Groups in Azure AD

After the creation of groups with users, you have to assign licenses. Follow the procedure below to assign licenses to Microsoft 365 groups. 

• Head to the “ Licenses ” tab in the “ Azure Active Directory ”. 
• Go to the “ All products ” tab and select (tick) the appropriate licenses to be assigned. 
• Click on the “ Assign ” option. 

• Select the “ Add users and groups ” option. 
• Choose the “ Groups ” tab and select the respective group and click on “ Select ”.

• Click the “ Next : Assignment options > ” button and toggle “ On/Off ” the services available with the selected subscription pack.

• Click “ Next: Assignment options > ”, finally review the details and select the “ Assign ” option. 

Now the licenses will assigned to the selected group.

Verify Group-based License Assignment

You can easily verify the group-based license assignment in the “ Groups ” tab of the Entra ID. To do so, follow the steps: 

• Navigate to the respective group in the “ Groups ” tab. 
• Select “ Licenses ”, there you can see a notification message displaying “ License changes have been applied to all users ”.

This message represents the confirmation of the group-based license assignment.

Check Microsoft 365 License Assignment Path

To check whether the license is assigned directly or inherited from a group, follow the steps below. 

• Go to the “ All products ” tab and click on the selective licenses to be checked. 

Group-based Licensing Using PowerShell

Though the Entra ID helps admins to manage Microsoft 365 services, many admins rely on PowerShell for its time-saving capabilities and to perform bulk operations.  

You can adhere to the following steps to configure group-based licenses using PowerShell. As Microsoft has announced the deprecation of the Azure PowerShell modules, here we are using the Graph PowerShell module. Before getting started using PowerShell, make sure to connect to the Microsoft Graph PowerShell module. 

• Create group with Microsoft Graph PowerShell  
• Add users to group using Graph PowerShell    
• Apply license to the group using MS Graph  
• Check whether the license is directly assigned or inherited

Create Group with Microsoft Graph PowerShell

To create a group using graph PowerShell, execute the cmdlet below after replacing the respective values.

Substitute ‘true’ or ‘false’ based on your group needs. The ‘GroupTypes’ parameter with the value ‘Unified’ will create a Microsoft 365 group. To create a Security group, you can simply omit the ‘GroupTypes’ parameter.

Note: Please note the “ Id” after the creation of the group for future reference.  This value will be needed for the addition of users in the groups and the license assignment.

Add Users to Group Using Graph PowerShell

To add users to a group using the graph PowerShell, you must know the ” Id ” of each user to be added to the group.  To know the “ Id ” of all the users run the comment below. 

After the execution, take note of the “Id” for each respective user who will be added to the newly created group. Save these Ids in a CSV file following the format demonstrated below.

Once you create the CSV file, execute the following cmdlet with file location and group Id to add the users to the group.

Here, replace the <GroupId> with the Id, which is noted during the creation of the group.

Apply License to the Group Using MS Graph

Before assigning a license to the group, it is essential to determine the “ SkuId ” of the specific license to be assigned. To know the “ SkuId ” of the particular license, execute the cmdlet below.

Once you have the “ SkuId ”, use the following cmdlet, replacing the <GroupId> and <SkuId> with the appropriate values, to assign the license to the group.

Note: The above method would be useful for existing users to get group-based licenses. If you want to add users to the license group in the user creation itself, create a CSV file like the below format and execute the script.

Replace <FileLocation> with the actual CSV file location and <GroupId> with the corresponding group ID for the license group.

Check Whether the License is Directly assigned or Inherited

After the assignment of licenses through groups, admins can easily check the license assignment path whether it is assigned directly or inherited from a group. The following script can help you to get the license assignment type. Here, replace the <SkuId> with the “ SkuId” of the selective subscription.

The above script provides Microsoft 365 user report with the assignment type.

Common License Assignment Errors in Group-based License

The following license assignment errors may occur when you are assigning licenses in a group-based manner. 

Conflicting Service Plans: This error may arise if one of the products listed in the group includes a service plan that conflicts with another service plan already assigned to the user by another product. To resolve this, you need to remove the user from the group.  

This error displays as “ MutuallyExclusiveViolation ” in PowerShell. 

Not Enough Licenses: This error may occur if enough licenses are not available for the products that are specified in the group. You need to either purchase more or free up unused licenses from other users. 

This error displays as “ CountViolation ” in PowerShell.

Limitations Of Group-based Licensing

Below is a list of some of the commonly known limitations regarding group-based licensing. 

• Doesn’t Support Nested Groups: Group-based licensing currently does not include the ability to add groups that contain other groups. 
• Only Suitable with Security Groups: This functionality is limited to security groups and Microsoft 365 groups with the attribute “SecurityEnabled” set to true. 
• License Assignment Type Visibility in M365 Admin Center: Group-based licensing is not currently supported in the Microsoft 365 Admin Center. Licenses assigned or inherited through a group appear as regular user licenses in Microsoft 365 admin center. 
• Affect the Performance with Directory Synchronization: Assigning or changing licenses to a large group of users (say 100,000 users) can have a negative impact on directory synchronization with Azure AD and on-premises systems. 
• Problem with Dynamic Groups: It is vital to ensure that the user is a member of a dynamic group before proceeding with the license assignment. This is necessary to facilitate proper license assignment. 
• Difficulty with High Loads: During high-load situations, there may be delays in processing license changes for groups or membership changes for groups with existing licenses. In such cases, you may need to contact Microsoft Support Services for any assistance.

Gain Enriched Microsoft 365 License Reports with AdminDroid for Completely Free!

In fact, this blog provides essential insights into group-based licensing within Microsoft 365. However, efficient management of assigned licenses in your Microsoft 365 environment is equally important. Proper license management and monitoring ensure optimal utilization of resources and adherence to license compliance. Don’t worry! Now, simplify the license management in your Microsoft 365 environment at zero cost with the assistance of AdminDroid Microsoft 365 reporting tool .

AdminDroid’s Microsoft 365 License Reporting gives unimaginable and free license reports, eliminating the need for complex PowerShell cmdlets. AdminDroid Microsoft 365 license usage reports allow admins to get reports in a few clicks. It also enables admins to get free license-related reports with three sections:

License Reports:  

• All Licensed Users Report 
• Licenses Assigned for Sign-in Disabled Users Report 
• Users by Assigned Subscriptions Report 
• Detailed License Provisioning Report 
• Unlicensed Users Report 
• Users With Free Subscriptions Report 
• Users With Trial Subscriptions Report 

License Expiry Reports:  

• Users with Soon-to-Expire Purchased Subscriptions Report 
• Purchased Subscription Expired Users Report 
• Users with Soon-to-Expire Trial Subscriptions Report 
• Trial Expired Users Report 
• Users with Suspended Subscriptions Report 

Subscription Report:  

• Subscription Usage Report 
• Expired Subscriptions Report 
• Unused Subscriptions Report 
• Purchased Subscriptions Report 
• Trial Subscriptions Report 
• Free Subscriptions Report 

Moreover, AdminDroid’s free Azure AD reporting tool provides detailed reports of user-related information, giving administrators the ability to get Microsoft 365 user details. It generates extensive insights on Microsoft 365 user activities, user passwords, group activities, licenses, and subscriptions. 

Also, admins can grab the entire visibility and track changes over Microsoft 365 accounts and groups activity through Azure Active Directory management, which offers a robust suite of 190+ reports.

Additionally, AdminDroid offers 1800+ reports and 30+ dashboards for all Microsoft 365 services such as SharePoint, Exchange Online, MS Teams, Power BI, Yammer, etc. Admins can experience all these reports in their Microsoft 365 domain free for 15 days with the premium edition.

Discover the advantages of AdminDroid by downloading it today and enjoy the benefits of a 15-day free premium edition trial .

Wrapping Up 

In conclusion, we hope that the blog has provided you with an overview of group-based licensing in Microsoft 365. Do not stop with this! Give a try to auto-claim policies , which goes beyond group-based licensing. If you have any comments or questions, please don’t hesitate to contact us. We value your feedback and welcome any inquiries you may have!

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Practical graph: report microsoft 365 licenses assigned through group-based licensing.

Table of Contents

A Quick Refresher for Group-Based Licensing

In February 2017, Paul Cunningham reviewed group-based licensing . Apart from renaming Azure AD to Entra ID, making cosmetic updates to the admin center GUI, and refreshing the documentation , not much has changed in the way the solution works.

In 2021, Microsoft said that they would remove the requirement for Entra ID Premium P1 licenses following the transition to a new license management platform and support nested groups. The transition to the new platform has happened and no trace of the requirement is in the documentation, so that’s a welcome development that might make group-based licensing a more attractive option for tenants.

Group-based licensing is a simple and effective method to assign licenses. In a nutshell, it works as follows:

• Licenses and their options (service plans) are associated with a security group.
• As users join the group, Entra ID assigns the associated licenses to their account. If a user leaves the group, Entra ID removes the license.
• The scheme works as long as licenses are available for assignment. If a license isn’t available, Entra ID can’t assign a license until the tenant either buys more licenses or removes a license from another account.
• The only other problem is conflicting service plans. This occurs when Entra ID attempts to assign a license that includes a service plan that’s already available to the account via another license. The problem was most often seen with Exchange Online because many products include an Exchange Online Plan 1 or Plan 2 service plan. The advent of license stacking for Exchange Online in early 2023 removed this problem.

For the purpose of this discussion, I created a security group called Microsoft Fabric License Assignment Group and associated it with licenses for Microsoft Fabric and Power Automate (Figure 1). Members added to the group receive these licenses and the service plans enabled by the licenses.

Group-Based License Management

This article covers the basics of license management for Entra ID accounts using the Microsoft Graph PowerShell SDK. The assignments described in the text are direct, meaning that administrators or scripts run the Set-MgUserLicense cmdlet to add or remove licenses or service plans for user accounts.

With group-based licensing in use, direct assignments are not used. Instead, you add an account to the group used to control license assignments. For example, these commands find the identifiers for the target group and the user account to add and run the New-MgGroupMember cmdlet to add the member to the group. They’re examples of the kind of processing that you might do after adding a new account.

A couple of minutes later (assuming licenses are available), the account has the licenses assigned through group membership. As you can see from Figure 2, the account has one direct assignment and two inherited from the group.

When creating new accounts, it’s important that these accounts receive licenses as soon as possible as otherwise they cannot access any services. For this reason, any interruption to normal group-based license assignments should be investigated and rectified quickly.

To remove licenses assigned through a group, remove the account from the group membership using the Remove-MgGroupMemberByRef cmdlet:

Following the removal of the account from the group membership, Entra ID removes the licenses from the account within a couple of minutes. See this article for more information about group management using the Microsoft Graph PowerShell SDK.

Reporting Group-Based Licensing

Two years ago, I discussed how to create a licensing report for a tenant with Microsoft Graph PowerShell SDK cmdlets . That version of the report only handled direct license assignments. To upgrade the report to handle group-based licensing, the script that analyzes license data checks the licenseAssignmentStates array returned by the Get-MgUser cmdlet.

When a group-based assignment exists, the array holds information about the assigning group and the product identifier. An entry in the array is present for each product license assigned through group-based licensing.

It’s possible for an account to have licenses assigned directly and via a group. This doesn’t interfere with the services enabled by the licenses but duplicate assignments are a waste of licenses.

To include the data in the report, the script extracts the group assignments and loops through the set to resolve the group display name and product “friendly” name (like Office 365 E3). This information is then formatted and put into a variable that is subsequently included in the report. Here’s the loop to extract the group-based licensing assignments:

Figure 3 shows how group-based licensing assignments show up in the output report.

As a bonus, the report tells you when it detects duplicate license assignments and highlights accounts that haven’t signed in recently. Administrators can use this information to remove duplicate licenses and consider if the licenses assigned to accounts that aren’t in active use can either be removed or replaced with a lower license. For instance, you might be able to assign an Office 365 F1 license to an account and remove its Office 365 E3 or E5 license. Finally, the report summarizes the product SKUs assigned to users within the tenant (Figure 4).

You can download the updated script from GitHub . If you’ve downloaded the script before, make sure that you have version 1.3 or later.

Update: The latest version of the script includes code to report license costs. See this article for more information.

Group-Based Licensing Worth Considering

Group-based licensing isn’t difficult to set up or manage. It’s definitely a method worth considering for license management if you’re confident that license availability won’t be a problem. If you haven’t tried group-based licensing yet, why not start with a relatively unimportant license and see whether this mechanism fits into your tenant management strategy. And when you’ve assigned some licenses with groups, remember to run the report to see if any duplicate assignments exist.

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Tony Redmond

Because we use the groups to manage the license, can I change and get the group assigned with one license and service plan?

The Real Person!

Can you change the code? Certainly. It’s just PowerShell. The question is what do you want to appear in the report…

I got an error on line 19. Try to create an index of a NULL-Array.

Es ist nicht möglich, einen Index auf ein NULL-Array anzuwenden. In C:\Temp\ReportUserAssignedLicenses-MgGraph.PS1:19 Zeichen:11 + [string]$LicenseCost = $PricingHashTable[$License] + ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + CategoryInfo : InvalidOperation: (:) [], RuntimeException + FullyQualifiedErrorId : NullArray

The license GUID pointed to in the $License variable does not exist in the $PricingHashTable. Adding cost details to the script was a recent upgrade (see https://practical365.com/report-user-license-costs/ ). Have a look at the CSV file containing subscription info and check the licenses assigned to the user being processed to find the problem license.

Is it possible to mix month-to-month and yearly licenses of the same type (Microsoft 365 standard for ex)? Does entraID differentiate those, or it’s just the license type what matters. For ex. we have 10 yearly and 10 monthly licenses, and 5 teams of 6 teams with 3 members each. When we are assigning licenses to those teams, can we just assign Standard license to each team, and EntraID will take what’s needed? Or ween need to assign monthly license to one team, and yearly to another?

AFAIK, Entra ID doesn’t distinguish monthly and yearly licenses when it comes to the license assigned to accounts, so you should be able to issue licenses via direct and group-based assignments as you want. The issue arises in the subscription renewal date. Monthly licenses obviously can expire sooner…

Thank you very much for the script, it helps me a lot. I have one more suggestion: Would it be possible to include a check to see if a user really has a license or if it was just assigned to him by a group but he didn’t get it because of missing licenses? Then it would fulfill all the requirements I need

A user has a license or they don’t. There are no phantom licenses to check…

What you could do is check for user membership in groups used to assign licenses and then against the set of assigned licenses held by the account. If the licenses differ, you know you’ve got a problem with group-based licensing.

Any idea what could generate this error and how I can resolve it? Cannot convert value “27-Dec-2023 15:41:01” to type “System.Int32”. Error: “The input string ’27-Dec-2023 15:41:01′ was not in a correct format.”

That’s an odd error because it indicates an attempt to convert a date into an integer. When in the script does this occur?

Cannot convert value “05-Jan-2024 12:32:49” to type “System.Int32”. Error: “Input string was not in a correct format.” At C:\Users\OneDrive\_PowerShell\ReportUserAssignedLicenses-MgGraph\ReportUserAssignedLicenses-MgGraph.PS1:101 char:7 + $DaysSinceLastSignIn = ($RunDate – $LastSignInDate).Days + ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + CategoryInfo : InvalidArgument: (:) [], RuntimeException + FullyQualifiedErrorId : InvalidCastFromStringToInteger

I’m in the netherlands, could it be a time zone/locality thingy?

I suspect it’s a local configuration setting for PowerShell. The date looks fine in terms of being in an English format. This format might be unacceptable for PowerShell configured to use the Dutch locale. See https://devblogs.microsoft.com/scripting/use-culture-information-in-powershell-to-format-dates/ and https://devblogs.microsoft.com/scripting/formatting-date-strings-with-powershell/

Replacing [string] with [datetime] in line 11 solved the problem for me!

Looking at this again, the string assignment

[string]$RunDate = Get-Date -format “dd-MMM-yyyy HH:mm:ss”

Might not work in non-English locales. Changing it to an explicit date/time would make it work. The variable is only used in report output, so it can be in whatever format you want…

In my tenant, almost everything is reported as duplicated. I think this is because skus assigned by a group pop up in $User.AssignedLicenses

I found some bugs that I fixed in version 1.4. Please download from GitHub and give the code a try out.

First and foremost, I’d like to express my gratitude for your continuous contributions to the community. Your work has been instrumental in aiding many individuals and organizations in managing their IT resources more effectively. I downloaded Version 1.3 today and wanted your thoughts regarding a challenge I encountered while utilizing your ReportUserAssignedLicenses-MgGraph.PS1 script. Specifically, I was testing the script and noticed an issue with the output data in the Microsoft365LicensesReport.CSV (and .HTML). It appears that the license value is present in the “Direct assigned licenses” column for all users (which I know is not accurate in my tenant), and I was hoping to understand whether this is the expected behavior or point me in the direction to get this resolved?

I think I need some more information from you to fully understand what issue you’re encountering. The value in the Direct assigned licenses column in the set of licenses directly assigned (by admins) to a user account. I see the correct licenses for the users shown for my tenant. You seem to be saying that you see an incorrect value. If so, can you run the Get-MgUserLicenseDetail cmdlet for one of the affected accounts and report the output here.

PS C:\Windows\system32> get-mguserlicenseDetail -UserId “Edward#######” | ft Id SkuId SkuPartNumber — —– ————- hr6frJHNBUGIN57CVSj4Su7E6wa1G91HgSARMkvFTgY 06ebc4ee-1bb5-47dd-8120-11324bc54e06 SPE_E5

Try Version 1.4 that’s now in GitHub.

For instance, if you look at the Direct assigned licenses column shown in Figure 1 in the article, you see that different licenses are reported for different accounts. These values come from Get-MgLicenseDetail.

Hi Tony! I was reading the document https://learn.microsoft.com/en-us/azure/active-directory/fundamentals/concept-group-based-licensing and unfortunately it is a requirement to still have Microsoft Entra ID P1 and above or Microsoft licenses 365 Business Premium or Office 365 Enterprise E3 or Office 365 A3 or Office 365 GCC G3 or Office 365 E3 for GCCH or Office 365 E3 for DOD and above.

Yes, that’s the current position. But it’s also true that Microsoft made a commitment to remove the Premium P1 requirement when they migrate Entra ID to a new licensing platform. According to Alex Simons, VP for Marketing in Entra ID, that work is still progressing, but it will conclude sometime. The only question is when.

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Office 365 license management: assigning licenses by ad group.

Nathan O'Bryan MCSM

Since the dawn of time (if the dawn of time was in 2011), assigning Office 365 licenses has been a pain. It has never been complicated, but it has also never been a pleasant experience.

You've always had two options to either manually assign licenses to users from the Office 365 Admin portal or use PowerShell to bulk assign the license to large numbers of users. In the first couple of years of Office 365 when most of the customers were small, I primarily just manually assigned licenses in the portal. As larger customers started moving into Office 365, I relied more heavily on PowerShell scripts to assign licenses to Office 365 users en masse.

Microsoft has added a third option to assign the license to users in Office 365 based on group membership. In this blog post, I'm going to walk you through the process of setting up automatic license assignment based on group membership to simplify your Office 365 license management process. 

Usage Location

The first hurdle we need to get over is the usage location. Since Office 365 is a worldwide service, and Microsoft does not have legal rights to sell some of those services in some countries, Microsoft needs to ensure that users are in a location where the services are legal before they can allow a license to be assigned to a specific user.

This is not an issue for US based organizations, but in countries, some of the cloud based telephone services in Office 365 are not legal.

When you are assigning licenses manually or via PowerShell you have to assign a usage location to each user before you can assign a license. The good news is that when assigning license via group membership, users who do not have a usage location specifically assigned will inherit the default usage location from the directory.

Assigning Licenses to a Group

The process of assigning a license to a group is done in the Azure AD portal. Go to the Azure AD blade and select "Licenses."

Next, select "All products" under manage and you'll see a listing of the licenses available within your tenant.

Select the license you want to work with (for this example, I selected E3) and then select "Assign" from the top of the menu.

On the next screen, choose "Select users and/or groups" then choose the group to which you want to assign this license.

Under "Assignment options," you can turn off individual parts of the license that you don't want users to get. For example, I tend to turn off Yammer to protect users from being exposed to that mess. Your mileage may vary.

After the license is assigned, you'll get a notification that the assignment was made.

Currently, there is no indication within the portal showing you what previous license assignments have been made. Hopefully, as this feature matures, Microsoft will add that functionality. I do see this feature referenced in the documentation on TechNet, but I don't see previous license assignments in my tenant.

Troubleshooting Issues

There can be a number of different reasons why a Office 365 license assignment might fail. The most straightforward for a license assignment to fail would be not having enough licenses available in your tenant. The problem with assigning licenses via group membership is that license assignment does not happen right away, so there isn't an error to report immediately.

If you add a user to an on-premises AD group, and that group membership change takes 30 minutes to sync to Azure AD, then the license assignment process behind the scenes takes another 15 minutes (about the average based on my testing in my tenant), it can be difficult to figure out why an assignment failed.

In the Azure AD portal, there is a troubleshooting wizard that you can use to assist with figuring out these issues.

The "Troubleshoot" link on the left takes you to a wizard that will step you through a few issues that may occur. I didn't find it to be super helpful with any of the things I broke in my tenant.

What I do think is most helpful is the audit logs. Below you can see where I assigned the E3 license to the "Executives" group, and where I added a test user to that group and he received an E3 license.

I've found that going through the audit logs  has  given me the information I was looking for on all the problems I created in my license assignments.

Additional Scenarios

Here are a few additional scenarios I found while playing with this feature in my tenant.

You cannot directly remove a license that was assigned by group membership. Trying to do so will result in the following error:

You can manually assign another license to that user. If your new license assignment adds services that user already has (you manually assign an E3 license to a user that already has an E5 license) you won't see an error. This can cause considerable waste, but it does not prevent the user from accessing anything.

As Microsoft adds new services to a license, that new service will automatically be turned on. For example, when Yammer was added to the E3 license that service was just turned on for all users who have E3 licenses assigned. If you want to save users from having to deal with Yammer, you'll need to manually go into Azure AD and change the services that are enabled under that license assignment.

The Wrap-Up

The ability to manage licenses via group membership is a big plus for Office 365 tenants, helping IT Pros with Office 365 license management .  There is clearly some additional work that needs to be done before this feature is fully ready. Hopefully, Microsoft will continue to work out the rough spots and give us a great solution for Office 365 license management.

Either way, the ability to manage license assignment via group membership is a feature I have used with several customers now. Overall, it's a great feature for Office 365.

Office 365 License Management

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Nathan is a five time former Microsoft MVP and he specializes in Exchange, Microsoft 365, Active Directory, and cloud identity and security.

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Assign Microsoft 365 licenses with group-based licensing

• Updated on February 12, 2024
• Microsoft 365

There is no need to manually assign or remove licenses for each user in the Microsoft 365 admin center. Instead, an easier way to assign licenses for multiple users is with groups. In this article, you will learn how to assign Microsoft 365 licenses using group-based licensing in Microsoft Entra admin center.

Table of contents

Group-based licensing requirements, create new group with members in microsoft entra id, assign microsoft 365 licenses to group in microsoft entra id, verify group-based licensing in microsoft entra id, group-based licensing in microsoft entra id.

Once you create a group with users in Microsoft Entra ID, you can assign one or more product licenses. All the members of the group will have the same licenses assigned. Microsoft Entra ID applies the same licenses when you add new members to a group. And when a member leaves a group, their licenses are automatically removed.

This licensing method eliminates using PowerShell to manage licenses for individual users based on organizational or department structure changes. It makes the process of assigning and removing licenses for multiple users at once more efficient.

Note: If you want to assign Microsoft 365 licenses to users directly, read the article How to Assign Microsoft 365 licenses with PowerShell .

To use group-based licensing, every user must have one of the following licensing:

• Paid or trial subscription for Microsoft Entra ID P1 and above.
• Paid or trial edition of Microsoft 365 Business Premium, Office 365 Enterprise E3 or Office 365 A3 or Office 365 GCC G3, Office 365 E3 for GCCH, or Office 365 E3 for DOD and above.

We will create a group to assign the default Microsoft 365 licenses to all users. Then, we will create another group to add paid Microsoft 365 licenses (e.g., Power BI or Visio) for certain users.

Follow the steps to create a new group, including members in Microsoft Entra admin center:

• Sign in to Microsoft Entra admin center
• Expand Identity > Groups > All groups
• Click New Group

• Select Security
• Enter the group name > M365_E5_Default

You can add members before and after you create the group. In our example, we will add members before creating the group.

• Click No members selected
• Search for the user
• Click the tab Users
• Select the user to add a member
• Click Select

• Click Create

Note: You need to refresh the page to see the new group you created in the list.

Now, we will create a new group to assign other (paid) licenses to a few members. Follow the same steps as shown above to create a new group.

In our example, we named the group M365_E5_EXO_P2 and selected 5 members.

Go to Identity > Groups > All groups to find the two security groups you created. The next step is to assign licenses to each group in Microsoft Entra admin center.

Time needed:  10 minutes

We will show you how to assign Microsoft 365 licenses to a group in Microsoft Entra ID.

Sign in to Microsoft Entra with your admin credentials.

There is another way to assign licenses to a group. You can follow the same steps we showed above or learn another way.

Follow the steps to assign licenses to the other group we created:

• Go to Microsoft Entra admin center
• Expand Identity > (Show more) > Billing > Licenses
• Click All products
• Select the checkbox Microsoft 365 E5 Developer
• Click Assign

• Click Add users and groups
• Search for the group
• Click the tab Groups
• Select the group M365_E5_EXO_P2

• Click on the tab Assignment options or below Next: Assignment options >

• Select the assignment options you want to include
• Click Next: Review + assign >

Note: For the other group, you can only include paid licenses such as Microsoft Power BI or Microsoft Visio .

You will get a notification that the licenses are assigned to the group.

Verify you created a security group type with licensed users in Microsoft Entra ID.

Follow the below steps to find the group-based licensing:

• Expand Identity > Billing > Licenses
• Click on the license Microsoft 365 E5 Developer

You can see that 15 members with the license Microsoft 365 E5 Developer are assigned. In our example, 10 members of the group M365_E5_Default have all the license options, and 5 members from the group M365_E5_EXO_P2 have 1 license option (Exchange Online Plan 2) assigned.

• Click on Licensed users

You will find a list of all the users with the Microsoft 365 E5 Developer license. Some users can have multiple licenses assigned, as you can see in the below picture.

Note: Some users have assigned the Microsoft 365 E5 Developer license manually (Direct), and some through the group-based licensing (Inherited).

Note: You can remove the direct license assignment from each user. To remove the inherited license, you must remove the user from the group.

• Click on Licensed groups

It shows that the State is Active for both groups. The Enabled Services show how many services of the license (66/66) you assigned. For the group M365_E5_EXO_P2 , we have only assigned the Exchange Online Plan 2 license (1/66).

You successfully assigned Microsoft 365 licenses with group-based licensing in the Microsoft Entra admin center!

Read more: Configure Certificate-Based Authentication to run automated PowerShell scripts »

You learned how to assign Microsoft 365 licenses with group-based licensing in Microsoft Entra ID. It’s easier to bulk assign Microsoft 365 licenses to all users when creating groups in Microsoft Entra ID. This way, you can find and manage your users’ licenses.

Did you enjoy this article? You may also like Export Microsoft 365 users licenses . Don’t forget to follow us and share this article.

o365info Team

This article was written by our team of experienced IT architects, consultants, and engineers.

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Assign or unassign licenses for users in the Microsoft 365 admin center

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Check out all of our small business content on Small business help & learning .

You can assign or unassign licenses for users in the Microsoft 365 admin center on either the Active users page, or on the Licenses page. The method you use depends on whether you want to assign or unassign licenses for specific users, or assign or unassign users for a specific product. You can also add a user and assign a license at the same time .

• As an admin, you can't assign or unassign licenses for a self-service purchase subscription bought by a user in your organization. You can take over a purchase or trial subscription , and then assign or unassign licenses.
• For some subscriptions, you can only cancel during a limited window of time after you buy or renew your subscription. If the cancellation window has passed, turn off recurring billing to cancel the subscription at the end of its term.

If you need help with the steps in this topic, consider working with a Microsoft small business specialist . With Business Assist, you and your employees get around-the-clock access to small business specialists as you grow your business, from onboarding to everyday use.

Before you begin

• You must be at least a License or User Administrator to assign licenses. For more information, see About Microsoft 365 admin roles .
• In addition to the steps described in this article, you can also use the Microsoft Graph PowerShell SDK to assign Microsoft 365 licenses to user accounts with PowerShell or remove Microsoft 365 licenses from user accounts with PowerShell .
• To use group-based licensing, see Assign licenses to users by group membership in Microsoft Entra ID
• Some services, like Sway, are automatically assigned to users, and don't need to be assigned individually.
• You can also delete user accounts that were assigned a license to make their license available to other users. When you delete a user account, their license is immediately available to assign to someone else.
• If you're a Cloud Solution Provider (CSP) and you bought products on behalf of a customer, you can't use the Your products page to assign or unassign licenses for certain products, like perpetual software. To assign or unassign licenses for those products, use the Licenses page .

Use the Licenses page to assign or unassign licenses

The Licenses page lets you assign or unassign licenses for up to 20 users at a time. The page shows the products you own, the number of available licenses for each product, and the number of assigned licenses out of the total licenses available.

The Licenses page shows an aggregate total of licenses for all subscriptions for the same product name. For example, you might have one subscription for Microsoft 365 Business Premium that has five licenses, and another subscription that has eight licenses for the same product. The Licenses page shows that you have a total of 13 licenses for Microsoft 365 Business Premium across all your subscriptions. This number is different from what you see on the Your products page, which displays a row for each subscription you own, even if they are for the same product.

If you want to assign a license to a guest user, follow the steps in Assign a license to a guest user .

Assign licenses by using the Licenses page

• In the admin center, go to the Billing > Licenses page.
• Select a product.
• On the product details page, select Assign licenses .
• In the Assign licenses to users pane, begin typing a name, and then choose it from the results to add it to the list. You can add up to 20 users at a time.
• Select Turn apps and services on or off to assign or remove access to specific items.
• When you're finished, select Assign , then close the right pane.

If there's a conflict, you see a message that tells you what the problem is, and how to fix it. For example, if you select licenses that contain conflicting services, the error message says to review the services included with each license and try again.

Change the apps and services a user has access to

• On the Licenses page, select the row for a specific user.
• In the details pane, select or deselect the apps and services that you want to give access to or remove access from.
• When you're finished, select Save , then select Close .

Unassign licenses by using the Licenses page

• Select the check boxes of the users for whom you want to unassign licenses.
• Select Unassign licenses .
• In the Unassign licenses box, select Unassign .

Use the Active users page to assign or unassign licenses

When you use the Active users page to assign or unassign licenses, you assign or unassign users licenses to products.

Assign licenses to one user

• In the admin center, go to the Users > Active users page.
• Select the row of the user that you want to assign a license to.
• In the right pane, select Licenses and Apps .
• Expand the Licenses section, select the boxes for the licenses that you want to assign, then select Save changes .

Assign licenses to multiple users

Select the circles next to the names of the users that you want to assign licenses to.

• At the top, select Manage product licenses .

In the Manage product licenses pane, select Assign more: Keep the existing licenses and assign more > Next .

Under Licenses , select the box for the license(s) that you want the selected users to have.

By default, all services associated with those licenses are automatically assigned to the users. You can limit which services are available to the users. Deselect the boxes for the services that you don't want the users to have.

At the bottom of the pane, select Save changes .

You might have to buy more licenses if you don't have enough licenses for everyone.

If you want to assign licenses for a large number of users, use Assign licenses to users by group membership in Microsoft Entra ID .

Assign a license to a guest user

You can invite guest users to collaborate with your organization in the Microsoft Entra admin center . To learn about guest users, see B2B collaboration overview . If you don't have any guest users, see Quickstart: Add a guest user and send an invitation .

You must be a Global Administrator to do these steps.

Global Administrators have almost unlimited access to your organization's settings and most of its data. To help keep your organization secure, we recommend that you limit the number of Global Administrators as much as possible.

• Go to the Microsoft Entra admin center .
• In the navigation pane, select Users > All Users .
• On the Users page, next to the search box, select Add filters .
• In the Add filter drop-down list, select User type .
• Select the Value drop-down list, select Guest , then select Apply .
• In the list of results, select the name of the user who needs a license.
• In the navigation pane, under Manage , select Licenses .
• Select Assignments .
• Under Select licenses , select the products you want to assign licenses for.
• Under Review license options , clear the check boxes for any services you don't want the guest user to have access to.
• At the bottom of the page, select Save .

Use the Active users page to unassign licenses

When you use the Active users page to unassign licenses, you remove product licenses from users.

Unassign licenses from one user

• Select the row of the user that you want to unassign a license for.
• Expand the Licenses section, clear the boxes for the licenses that you want to unassign, then select Save changes .

Unassign licenses from multiple users

• Select the circles next to the names of the users who you want to unassign licenses for.
• In the Manage product licenses pane, select Unassign all > Save changes .
• At the bottom of the pane, select Done .

What happens to a user's data when you remove their license?

• When a license is removed from a user, Exchange Online data that is associated with that account is held for 30 days. After the 30-day grace period, the data is deleted and can't be recovered. However, it's linked to the retention policy, and the content that matches retention labels is retained for discovery.
• Files saved in OneDrive for Business aren't deleted unless the user is deleted from the Microsoft 365 admin center or is removed through Active Directory synchronization. For more information, see OneDrive retention and deletion .
• When the license is removed, the user's mailbox is no longer searchable by using an eDiscovery tool such as Content Search or eDiscovery (Premium).
• If you have an Enterprise subscription, like Office 365 Enterprise E3, Exchange Online lets you preserve the mailbox data of a deleted user account by using inactive mailboxes . For more information, see Create and manage inactive mailboxes in Exchange Online .
• To learn how to block a user's access to Microsoft 365 data after their license is removed, and how to get access to the data afterwards, see Overview: Remove a former employee and secure data .
• If you remove a user's license and they still have Microsoft 365 productivity apps installed, they see Unlicensed Product and activation errors in Office when they use Microsoft 365 productivity apps.

If you assigned licenses and your users don't have Microsoft 365 productivity apps installed, you can share the Employee quick setup in Microsoft 365 for business with your users to set up things like Download and install or reinstall Microsoft 365 or Office 2021 on a PC or Mac and Set up Microsoft 365 apps and email on a mobile device .

If you unassigned licenses and you don't plan to reassign the unused licenses to other users, consider removing the licenses from your subscription so that you're not paying for more licenses than you need.

Related content

Understand subscriptions and licenses in Microsoft 365 for business (article) Buy or remove licenses for a Microsoft business subscription (article)

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