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Demo 1 - Configure Azure AD Group Based Licensing

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1h 10m

Microsoft 365 represents a combination of Office 365, Windows 10 and Enterprise Mobility offerings – providing the most complete set of SaaS technologies that Microsoft has to offer. With Microsoft 365, organizations can deploy a complete solution encompassing both devices and applications, along with applying security and compliance policies to protect the entire suite.

This course will help you as you plan your migration of users and data to Microsoft 365, including planning your identity and authentication solution, and the on-premises infrastructure needed to support your migration. We’ll also help you understand and identify your business requirements and use cases, to help drive your decision-making process when planning to transition your infrastructure to the Microsoft cloud. We’ll spend some time focusing on networking and discuss some of the networking decisions that need to be made to ensure an optimal migration experience, as well as the best experience for your users after migration.

This course will also help you to identify which data needs to be migrated to the cloud, and what the best migration method will be based on your scenario – we’re also going to cover the different types of user identities, how your users will authenticate, and how that’s going to affect your migration planning.

In addition to talking about these different components, we’re also going to run through a few demos – showing you some of the practical steps involved, along with some tips and tricks we’ve picked up along the way. 

Learning Objectives

By the end of this course, you should be able to:

  • Plan a Microsoft 365 Implementation, including the supporting infrastructure
  • Plan your identity and authentication solution, both on-premises and in the cloud
  • Identify your users, data, and mailboxes to be migrated to Microsoft 365
  • Plan the migration of your groups and user data to Microsoft 365

Intended Audience

This course is intended for people who:

  • Want to become a Microsoft 365 administrator
  • Are preparing to take the Microsoft’s MS-100 exam 


To get the most from this course, you should have a general understanding of networking & server administration as well as IT fundamentals such as DNS, Active Directory and PowerShell.


Azure AD Group-Based Licensing is one of the coolest things that they've added to Azure AD Premium, as it is very flexible and easy to configure. Let's walk through the process now and show you what it looks like. 

We're gonna go to the Azure active directory admin center, and then click on groups. Under all groups, we're gonna go ahead and create a new group. This one is gonna be a security group and we're gonna call it M 365 Business, and we're gonna call this one Full Stack because this is full Microsoft 365 licenses. Membership type is going to be assigned. We'll create. 

Now we're gonna go back into our group and click on licenses. And then assign the licenses that we want. In this case we're going to use the Microsoft 365 Business licenses, and we're just gonna leave everything selected 'cause this one's full stack. So we're gonna say okay, and then assign. And license assignment has been scheduled. Now we're gonna go in and add a couple users, and we're going to add the Cools to this one. Select. And refresh. So if we go to licenses now, we can see that license changes are pending. It's gonna go through and it's going to find our two users, and it's going to assign their licenses. While we're waiting for that we're gonna go back to all groups, and we're gonna create a new group. And again, it's a security, and this one is gonna be M365 Business. Email and teams only. Now we'll leave the description out 'cause that's pretty straightforward. Membership type is assigned. Gonna go create. 

All right, so email and teams, just like you might think, we're gonna go into licenses and we're going to assign the M 365 Business licenses. Except this time we're going to uncheck, well we're just gonna check everything, actually. Then we'll go through and put the things on that we want, and only the things that we want. We do not want Windows 10, SharePoint, Office. We want Teams, and we want Exchange Online . Now this might be a bit excessive. This might not necessarily match an actual scenario. We're just showing you some of the ideas here of what's possible. So we're gonna go ahead and assign those, and let's go back in and we're gonna add our test users. We'll add Lester Tester. And let's add Johnny Test. 

Let's go back and check on our license assignments. License changes have been applied to all users, and so now what we're gonna do is we're gonna click on members, and we're gonna see what the license assignment looks like. Go check out Joel Cool, go to his licenses. See that he has two assignment paths in place, which means that he has both direct and inherited. So what we're gonna do is we're gonna remove the direct licensing by clicking on his account, licenses and apps, and we're just gonna uncheck Microsoft 365 Business. 

Now normally if you make these kind of license changes your user's mailbox will drop. You can cause an outage in the user. So typically you wanna make these changes before you start getting users provision in Office 365, however, because we already have the licensed assigned twice, we're gonna save changes and close it down. We already get an error that says that one or more licenses cannot be modified because they're inherited from a group membership. 

So we're just gonna close, and refresh. And we can see that he is licensed again. Now we can do the same thing for our other users. Do it for Jane. Gonna click on her. Same thing, two licenses applied, so we're gonna go into Jane Cool. And clear the Microsoft 365 Business license. Close it down. And refresh. Now if we go back into directory and refresh, we should see that, one more time. I'll go back to Joe here. Licenses, only inherited, good. So that's updated. Let's check out Jane. Go to licenses. Again, only inherited. If you come back into the Office 365 admin center we can see that everything is still checked and good to go. So let's just do the same thing for one of our other users and let's take, who else, Johnny Test. 

Go to licenses and apps, and right now Johnny Test has all licenses assigned because he has both the direct and the inherited licenses. So we're gonna do the same process, save changes. Get that little error. Say okay, and refresh. Come back. And now we can see that all of the other options have been disabled, just like we configured. So you can see that you can still use this process to update your existing user accounts. Just make sure that you have the licenses assigned through the group permissions before you come back and remove them here, otherwise your user might lose access to their mailbox for a short period of time until everything gets restored, but as long as you have the group-based licensing in place before you come and remove their license in the Office 365 portal, everything will be okay.

About the Author

Jeremy Dahl is a Senior Technology Consultant who has spent the last 8 years focusing on Microsoft 365 technologies and has been an Office 365 MVP for the last 6 years. Jeremy is a self-proclaimed cloud addict who architects technology solutions that combine cloud technologies with on-premises solutions, allowing organizations to make the most of their existing infrastructure while still taking full advantage of the agility and scalability of what the cloud has to offer.

Jeremy can be found blogging about Microsoft 365 technologies on his website, masterandcmdr.com, and evangelizing the Microsoft cloud on Twitter.