Why Microsoft Entra ID P2 Is Critical Now

For many organisations, usernames and passwords have become the new security perimeter.

Employees now access Microsoft 365, cloud applications and company data from different offices, home networks, mobile devices and locations around the world. While this flexibility has transformed how businesses operate, it has also made identity on one of the most attractive targets for cybercriminals.

Multi-factor authentication and standard Conditional Access policies remain essential, but they may not provide enough protection against modern identity-based threats. Businesses increasingly need security controls that can identify unusual behaviour, respond to risk automatically and tightly control privileged administrator access.

This is where Microsoft Entra ID P2 becomes particularly valuable.

What Is Microsoft Entra ID P2?

Microsoft Entra ID, previously known as Azure Active Directory, is Microsoft’s cloud-based identity and access management platform. It controls how users sign in and what applications, systems and information they are permitted to access.

Microsoft Entra ID P1 provides important capabilities such as Conditional Access, dynamic groups and self-service password reset. It is included with several Microsoft subscriptions, including Microsoft 365 Business Premium.

Entra ID P2 builds on these controls by introducing more advanced identity security and privileged access capabilities. Its most important features include:

• Microsoft Entra ID Protection
• Risk-based Conditional Access
• Privileged Identity Management
• More advanced access reviews
• Identity risk investigation and remediation
• Enhanced governance over privileged roles

Microsoft confirms that risk-based Conditional Access policies require Microsoft Entra ID Protection, which is an Entra ID P2 feature. (Microsoft Learn⁠)

Why Identity Security Has Become So Important

Traditional cyber security was heavily focused on protecting the company network. Businesses installed firewalls, secured their offices and attempted to keep attackers outside their physical perimeter.

That perimeter has now changed.

A cybercriminal who obtains a legitimate employee’s credentials may not need to bypass the firewall. They can attempt to sign in through the same Microsoft 365 portals and cloud applications used by genuine employees.

To basic security systems, a stolen account can initially look like a legitimate user. The challenge is therefore no longer simply determining whether the correct password has been entered. Businesses must also consider:

• Where the user is signing in from
• Whether the device is trusted
• Whether the sign-in behaviour is unusual
• Whether the credentials are believed to be compromised
• What level of access the user is requesting
• Whether additional verification should be required
• Whether access should be blocked entirely

Microsoft describes Conditional Access as its Zero Trust policy engine because it combines identity, device, location, application and risk signals before making an access decision. (Microsoft Learn⁠)

Entra ID P2 extends this approach by allowing actual identity risk to influence that decision.

1. It Can Identify Risky Users and Sign-Ins

One of the most significant benefits of Entra ID P2 is Microsoft Entra ID Protection.

Identity Protection uses Microsoft’s threat intelligence and automated detection capabilities to identify potentially suspicious activity. This can include sign-ins associated with unusual behaviour, anonymous infrastructure, leaked credentials or other indicators of account compromise.

Administrators can investigate these risks rather than relying solely on users to report suspicious activity.

Microsoft explains that Identity Protection detects identity-based risks, allows administrators to investigate and remediate them, and can feed risk information into Conditional Access or security monitoring platforms. (Microsoft Learn⁠)

This matters because compromised accounts are not always obvious. An attacker may deliberately behave cautiously, accessing email, searching SharePoint or monitoring conversations before launching a larger attack.

Earlier identification can help a business respond before significant damage is done.

2. It Enables Risk-Based Conditional Access

Conditional Access is already an important security tool, but Entra ID P2 makes it more responsive.

With risk-based Conditional Access, organisations can create policies that react to the level of risk associated with a user or sign-in.

For example, a business could configure Microsoft Entra to:

• Allow a normal, low-risk sign-in
• Require multi-factor authentication when sign-in risk increases
• Require a secure password change when a user is considered at risk
• Block access when the risk is too high
• Prevent sensitive applications from being accessed under suspicious conditions

This provides a more proportionate response than applying the same rule to every situation.

A legitimate employee using their usual managed laptop in the UK may be treated differently from an attempted sign-in using unusual infrastructure from another country.

The objective is not to make access unnecessarily difficult. It is to introduce stronger controls precisely when they are needed.

3. It Protects Privileged Administrator Accounts

Administrator accounts are especially attractive to attackers because they can provide access to users, security policies, devices, applications and company data.

In many organisations, administrators are permanently assigned powerful roles. This means elevated access remains available even when it is not being actively used.

Microsoft Entra Privileged Identity Management, commonly known as PIM, helps businesses replace permanent administrative access with controlled, time-limited access.

With PIM, an administrator can be made eligible for a role without having that role active continuously. When elevated permissions are required, the administrator activates the role and may be required to:

• Complete multi-factor authentication
• Provide a justification
• Obtain approval
• Use the role for a limited period
• Work within defined activation conditions

Microsoft describes PIM as a service for managing, controlling and monitoring access to important resources across Entra ID, Azure, Microsoft 365 and Microsoft Intune. (Microsoft Learn⁠)

This approach follows the principle of least privilege: users should receive only the access they need, for only as long as they need it.

4. It Reduces the Impact of a Compromised Admin Account

A compromised standard user account is serious. A compromised Global Administrator account can be catastrophic.

An attacker with permanent administrative privileges may be able to:

• Create additional administrator accounts
• Change security settings
• Disable protective policies
• Access sensitive information
• Register malicious applications
• Modify authentication methods
• Interfere with logging and monitoring
• Establish long-term access to the environment

PIM does not make administrator compromise impossible, but it can significantly reduce the amount of permanently available privilege.

When privileged roles must be activated for a limited period, attackers have fewer opportunities to exploit dormant administrative permissions. Activation records also create greater visibility over who requested access, when it was activated and why it was required.

5. It Supports a Zero Trust Security Strategy

Zero Trust is based on a straightforward principle: never automatically trust a request simply because it comes from inside the network or uses a valid password.

Every access request should be evaluated using the available context.

Entra ID P2 helps organisations apply this principle to identity by considering factors such as:

• User risk
• Sign-in risk
• Authentication strength
• Device compliance
• Application sensitivity
• User role
• Location
• Privilege level

This allows security decisions to be based on current conditions rather than static assumptions.

A user who signed in safely yesterday should not automatically be trusted today if Microsoft has since detected leaked credentials or suspicious activity associated with the account.

6. It Improves Access Governance

Access tends to accumulate over time.

Employees change departments, take on temporary projects, cover for colleagues and receive access to additional systems. Unless permissions are regularly reviewed, users can retain access long after there is a legitimate business need.

This is often referred to as privilege creep.

Entra ID P2 supports access reviews that can help organisations periodically confirm whether users still need membership of groups, access to applications or assignment to certain roles.

Reviews can be configured to run at regular intervals, including weekly, monthly, quarterly or annually. Reviewers can approve or deny continued access, supported by recommendations within the platform. (Microsoft Learn⁠)

This can be particularly valuable for:

• Privileged administrator roles
• Finance and payroll systems
• HR information
• Sensitive SharePoint sites
• External guest accounts
• Project-based access
• Third-party suppliers and contractors

Regular reviews reduce unnecessary access and make it easier to demonstrate that permissions are being actively governed.

7. It Helps Secure Guest and Third-Party Access

Modern businesses rarely operate in isolation. Contractors, suppliers, consultants and customers may all require access to shared Microsoft Teams, applications or documents.

External collaboration is useful, but guest accounts can easily be forgotten once a project ends.

A guest who no longer works with the organisation may continue to have access unless there is a process for reviewing and removing it.

Access reviews and identity governance controls can help businesses determine whether external users still require access. This creates a more structured process for managing third parties instead of allowing guest accounts to remain indefinitely.

8. It Can Improve Incident Response

When a suspicious sign-in occurs, speed matters.

Without appropriate identity monitoring, an IT team may need to manually examine audit logs, user reports, locations and authentication events before deciding what action to take.

Entra ID P2 can provide clearer identity risk information and automate parts of the response.

Depending on the policies configured, the platform can challenge a user with MFA, require a secure password reset or block access before an administrator becomes involved.

This does not remove the need for security monitoring or expert investigation. It can, however, reduce the period during which a potentially compromised account remains active.

9. It Supports Compliance and Cyber Insurance Requirements

Businesses are increasingly expected to demonstrate that access to sensitive systems is properly controlled.

Customers, insurers, auditors and regulators may ask how an organisation:

• Protects administrator accounts
• Reviews user permissions
• Detects compromised identities
• Removes unnecessary access
• Records privileged activity
• Responds to suspicious sign-ins
• Enforces least-privilege access

Entra ID P2 can support these requirements by providing stronger controls and clearer evidence of identity governance.

Technology alone does not guarantee compliance, but properly implemented identity controls can make security processes easier to document, monitor and demonstrate.

Does Microsoft 365 Business Premium Include Entra ID P2?

This is an important licensing distinction.

Microsoft 365 Business Premium includes Microsoft Entra ID P1, not the complete Entra ID P2 feature set. Business Premium therefore provides valuable security capabilities, including standard Conditional Access, but it does not automatically provide all P2 features such as full Identity Protection, risk-based policies and Privileged Identity Management.

Businesses may obtain P2 capabilities through a standalone Entra ID P2 licence or through certain higher-level Microsoft licensing packages.

Licensing should always be reviewed carefully because users benefiting from a licensed feature must be covered appropriately. Simply purchasing one licence to activate a tenant-wide feature does not necessarily make the organisation properly licensed.

Is Entra ID P2 Necessary for Every User?

The right licensing model depends on how the organisation intends to use the features.

Some businesses initially focus P2 licensing on users with privileged roles or access to highly sensitive information. Others deploy risk-based identity protection across the workforce because any compromised account could be used as an entry point.

Important groups to consider include:

• Global Administrators
• IT support and security teams
• Finance employees
• Directors and senior leadership
• HR personnel
• Users with access to sensitive customer data
• Employees authorised to approve payments
• Users who manage applications or infrastructure

However, the decision should be based on risk and licensing compliance rather than job title alone. A seemingly ordinary account can still be exploited to send convincing phishing messages, access shared data or move further through the organisation.

Entra ID P2 Must Be Configured Properly

Purchasing Entra ID P2 does not automatically secure the business.

Its value depends on how effectively it is configured and managed. A suitable implementation may include:

1. Reviewing current administrator roles.
2. Removing unnecessary permanent privilege.
3. Introducing PIM for eligible administrative access.
4. Configuring user-risk and sign-in-risk policies.
5. Testing Conditional Access policies in report-only mode.
6. Defining emergency access arrangements.
7. Introducing recurring access reviews.
8. Integrating identity alerts with security monitoring.
9. Documenting incident response procedures.
10. Regularly reviewing exclusions, guest users and policy performance.

Poorly planned policies can interrupt legitimate access, while overly broad exclusions can create serious security gaps. Deployment should therefore be carefully designed, tested and monitored.

Why Entra ID P2 Is Critical Now

Entra ID P2 is becoming increasingly important because identity security can no longer be treated as a basic login function.

Businesses need to know more than whether a user entered the correct password. They need to understand whether the sign-in is risky, whether the account may be compromised, whether elevated access is genuinely required and whether existing permissions remain appropriate.

Entra ID P2 helps organisations move from static access control to intelligent, risk-based identity protection.

It can help businesses:

• Detect suspicious identity activity earlier
• Respond automatically to risky sign-ins
• Reduce permanent administrator privileges
• Enforce least-privilege access
• Review permissions regularly
• Strengthen guest-user governance
• Improve auditability
• Support a practical Zero Trust strategy

For organisations that depend heavily on Microsoft 365 and cloud applications, identity is now one of the most important areas of cyber security. Entra ID P2 provides the advanced controls needed to protect that identity layer more effectively.

How Hamilton Group Can Help

Hamilton Group can review your Microsoft 365 and Entra ID environment, identify identity security gaps and determine whether Entra ID P2 is appropriate for your organisation.

Our team can help with licensing assessments, Conditional Access, Identity Protection, Privileged Identity Management, access reviews, administrator security and wider Zero Trust planning.

We can also ensure that these controls are introduced carefully, reducing risk without creating unnecessary disruption for your employees.

To discuss strengthening your Microsoft identity security, contact Hamilton Group on 0330 043 0069 and arrange a review with our experts.