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Executive Summary

Microsoft Entra ID P2 Entitlement Management is an advanced identity governance feature designed for managing identity and access lifecycle at scale [1]. Whilst powerful for large enterprises, the reality for SMBs is more nuanced. This report provides a candid assessment based on current market analysis and practical considerations for small businesses with 50-300 employees.

The bottom line: For most SMBs, the £32,400 annual investment (for 300 users) in Entra ID P2 solely for entitlement management features represents poor value when compared to alternatives like Microsoft 365 Business Premium (which includes Entra ID P1) or competing solutions from vendors like Okta and JumpCloud.

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What is Entitlement Management?

Core Capabilities

Entitlement management introduces the concept of access packages – bundles of all resources with the access a user needs to work on a project or perform their task [1]. Key features include:

• Multi-stage approval workflows for access requests [1]
• Time-limited assignments that automatically expire [1]
• Automatic user provisioning based on properties like department or cost centre [1]
• External user management for partners and vendors [1]
• Access reviews to ensure users don’t retain unnecessary access [1]
• Delegated administration allowing non-IT staff to manage access for their departments [1]

Use Cases Microsoft Highlights

The platform addresses scenarios such as:

• Users might not know what access they should have [1]
• Users holding onto access longer than required for business purposes [1]
• Managing external users from supply chain organisations or business partners [1]
• Departments managing their own access policies without IT involvement [1]

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Cost Analysis for SMBs

Entra ID P2 Pricing

£9/user/month

£108 per user annually

300-User Organisation

£32,400/year

Just for identity governance

Business Premium

£22/user/month

Includes productivity + security + Entra P1

Licensing Breakdown

According to Microsoft’s official pricing [2][3]:

	Monthly Cost	Annual Cost (300 users)	What’s Included
Entra ID P2 standalone	£9/user	£32,400	Identity governance, PIM, advanced protection
Entra ID Governance add-on	£7/user (requires P1/P2)	£25,200	Entitlement management features only
M365 Business Premium	£22/user	£79,200	Full productivity suite + Entra P1 + Defender
Business Standard + Entra P1	£18.50/user	£66,600	Productivity + basic identity management

Hidden Costs Often Overlooked

Beyond licensing, SMBs must consider:

1. Implementation complexity: Initial setup can require significant IT resources or consultant fees [3]
2. Training requirements: Staff need education on managing access packages and policies
   

• Ongoing administration: Someone must regularly review and update access packages
  
• Integration effort: Connecting all applications and resources to the system
• • Includes essential security: Defender for Business, Safe Links, Safe Attachments
    
  • Provides device management: Intune for policy enforcement across all devices
    
  • Offers data protection: Azure Information Protection for sensitive files
    
  • Simplifies licensing: One license for all users eliminates confusion
    
  • Enables cloud-first operations: Critical for businesses without on-premises servers [4]The reality: The cost of Microsoft Entra ID can escalate significantly, especially with the need for advanced features or for companies managing a large user base [3][3].
    

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    Implementation Guide for SMBs

    • Phase 1: Prerequisites (Week 1-2)

      Ensure Entra ID P2 licensing and admin access

    • Phase 2: Catalog Creation (Week 3)

      Set up resource catalogs and define owners

    • Phase 3: Access Packages (Week 4-5)

      Create packages bundling resources for common roles

    • Phase 4: Policy Definition (Week 6-7)

      Configure approval workflows and time limits

    • Phase 5: Testing & Rollout (Week 8-10)

      Pilot with select departments before full deployment

    Step-by-Step Setup Process

    1. Enable Entitlement Management

    • Navigate to Microsoft Entra admin centre
      
    • Enable the entitlement management feature
      
    • Assign initial administrators

    2. Create Catalogs [1]

    • Establish containers for related resources
      
    • Designate catalog owners from business units
      
    • Define delegation permissions

    3. Add Resources to Catalogs

    • Microsoft Entra security groups [1]
    • Microsoft 365 Groups and Teams [1]
    • Enterprise applications (SaaS and custom) [1]
    • SharePoint Online sites [1]

    4. Design Access Packages [1]

    • Bundle resources needed for specific job functions
      
    • Create packages for common scenarios (new employee, contractor, project team)
      
    • Define resource roles within each package

    5. Configure Policies [1]

    • Set eligible requestors (internal users or partner organisations)
      
    • Define approval processes and approvers
      
    • Establish access duration and renewal requirements
      
    • Configure automatic assignment rules based on user attributes

    6. Test and Deploy

    • Run pilot with IT department
      
    • Gather feedback and refine packages
      
    • Roll out department by department
      
    • Monitor usage and adjust as needed

    Time and Resource Requirements

    For a 100-person SMB, expect:

    • Initial setup: 4-6 weeks with dedicated IT resource
      
    • Ongoing maintenance: 5-10 hours monthly
      
    • User training: 2-4 hours per department

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    The Honest Truth: Is It Worth It for SMBs?

    ✅ When It Makes Sense

    Heavy compliance requirements, complex partner ecosystems, frequent staff changes, or multi-organisation collaboration needs

    ❌ When It’s Overkill

    Stable workforce, simple org structure, limited external collaboration, or existing solutions working well

    Where Entitlement Management Adds Value

    Legitimate use cases for SMBs include:

    1. Heavily regulated industries (healthcare, finance) requiring detailed access audit trails [1]
    2. High staff turnover scenarios where automation saves significant time
       
    3. Complex partner relationships with multiple external organisations needing controlled access [1]
    4. Project-based businesses with frequently changing team compositions [1]
    5. Compliance requirements demanding regular access reviews and certifications

    Where It’s Unnecessary Complexity

    For most SMBs, entitlement management is overkill because:

    1. Microsoft 365 Business Premium is sufficient: At £22/user/month, it includes Entra ID P1 with Conditional Access, MFA, and basic identity management – enough for most SMBs [4][4]
    2. Simpler alternatives exist: Solutions like JumpCloud offer all-in-one platforms for SSO, directory services, and device management at more SMB-friendly price points [5][5]
    3. Limited IT resources: Small businesses often lack dedicated identity governance teams. The initial setup learning curve can be steep [3]
    4. Manual processes work fine: For organisations under 150 users, manual access management with good documentation often suffices
    5. Business Premium provides essential security: Including Safe Links, Safe Attachments, Azure Information Protection, and Intune device management [4]

    Real-World Perspective

    According to recent market analysis, mid-sized companies (100-750 employees) with hybrid workforces often find better value in unified platforms like JumpCloud that combine identity and device management [5]. Even Okta, whilst potentially expensive at scale, offers 7,000+ pre-built app integrations with faster deployment than complex governance systems [5][5].

    The harsh reality: Microsoft Entra ID documentation can occasionally lag behind the rapid pace of feature updates, making implementation challenging for resource-constrained IT teams [3].

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    Alternative Solutions Comparison

    Detailed Comparison Table

    Solution	Best For	Monthly Cost (100 users)	Key Advantages	Main Limitations
    M365 Business Premium	Microsoft-centric SMBs	£2,200	Integrated suite, includes productivity tools, Defender for Business	Limited to 300 users
    JumpCloud	Hybrid IT environments	£800-1,200	Cross-platform support, device + identity management	Lacks deeper governance features
    Okta	SaaS-heavy organisations	£1,200-1,800	7,000+ integrations, fast deployment	Can get expensive at scale
    OneLogin	Cloud-first SMBs	£900-1,500	SmartFactor Authentication, AI-driven security	Limited device management

    Why Business Premium Usually Wins

    For SMBs already in the Microsoft ecosystem, Business Premium at £22/user/month delivers better value than standalone Entra P2 because [4]:

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  Recommendations by Business Size

  Decision Framework

  Ask these questions before investing in Entra P2:

  1. Do you have dedicated IT staff for identity governance? If no, the complexity isn’t worth it.
     
  2. Are you in a heavily regulated industry? If yes, the audit and compliance features may justify the cost.
     
  3. Do you frequently onboard/offboard contractors or partners? If yes, automation could save significant time.
     
  4. Is your organisation structure simple and stable? If yes, manual processes with Business Premium suffice.
     
  5. Are you already struggling with your current identity management? If no, don’t add complexity for complexity’s sake.

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  Final Verdict

  The Bottom Line

  Microsoft Entra ID P2 Entitlement Management is a powerful tool solving real problems – just not problems most SMBs actually have. The complexity, cost, and administrative overhead rarely justify the investment for organisations under 300 users.

  For 95% of SMBs, the path forward is clear:

  1. Start with Microsoft 365 Business Premium (£22/user/month) for integrated security and productivity
     
  2. Implement the basics well: MFA, Conditional Access, device management via Intune
     
  3. Use simple processes: Document access procedures, regular reviews, clear onboarding/offboarding
     
  4. Reassess at growth milestones: Consider advanced governance only when complexity genuinely demands it

  Remember: Adding complexity doesn’t automatically mean adding security. A well-implemented, simple identity management system beats a poorly maintained complex one every time. For most SMBs, Business Premium provides the right balance of security, usability, and value [4].

  When to Reconsider

  Revisit the Entra P2 decision when:

  • Your organisation exceeds 300 users
    
  • You enter heavily regulated markets
    
  • External collaboration becomes core to your business
    
  • Manual processes consume more than 20 hours monthly
    
  • Audit failures highlight governance gaps

  Until then, invest in getting the basics right rather than adding advanced features you won’t fully utilise. Your budget, IT team, and users will thank you.

  References

  [1] What is entitlement management? – Microsoft Entra ID Governance | Microsoft Learn

  [2] Microsoft Entra Plans and Pricing | Microsoft Security

  [3] Microsoft Entra ID Review 2025: Key Features, Pricing & Alternatives

  [4] 365 Business Premium vs Business Standard & Entra ID P1

  [5] Top 10 IAM Solutions for Mid-size Companies (2025)