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Azure account management Safely Manage External Users Azure AD B2B

SoftwareOne blog editorial team
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As consultants working with many different clients, we often need access to the client's environment in order to get work done – things like deploying resources or checking existing configurations.We see this all the time: Getting full external guest access which somehow never gets revoked. Managing guests and temporary access accounts are something faced by every company, and yet we fail miserably to manage them well.We have come a long way as an industry over the past 20 years, which have put us in the public cloud, and yet this still remains an issue. Why?

What's the problem with guest access?

The problem is not in creating a new account and granting access. This is easy and we have been doing it for years.It has gotten even easier with cloud access.Need an account? Sure – no problem, do you have your Microsoft Account (or LiveID as we know it)? We will grant you access to our Azure subscription!Access problem?Not really – you get assigned as a global admin, and it is solved (based on real-life situations, you'll be surprised to learn how many external people are granted domain admin and global admin privileges in organisations).

Here lies the issue:

  • Managing the lifecycle of these accounts. Do we still need it? Is this person still with us or even working for the same company?
  • Controlling access to resources and applications. Granting admin accounts is not a solution. It is a way to get into trouble.
  • Monitoring account activities and granting access privileges.

It is a broad subject, so let's focus on the first task.How to effectively manage external accounts in an organisation for Azure cloud access?

Keys to the kingdom

First: Understand how access to your Azure subscription is being secured and controlled

The 411 on access:

  • Azure Active Directory (Microsoft Entra ID) tenant controls access to every resource in the Azure cloud.
  • When you start a new Azure subscription using your Microsoft Account, you are in fact creating a small Azure AD tenant where your subscription is rooted.
  • Azure AD is where all authentication and access control happens, that's why it needs to be created first, followed by assigning the Azure subscription to it.
  • It is also the place where you manage all the accounts that have access to your subscriptions.

"But I have an Azure AD tenant already. Can I use it?"

Fair question! Yes, of course, you can. This is actually the first step to get your access under control.Do not use multiple Azure AD tenants to manage your organisation's resources – unless you need to provide strict separation between services. Get them under a single Azure Active Directory. For existing Azure subscriptions you can do this by changing the default directory for the subscription.Tip #1: Bring all your Azure subscriptions under the management of a single Azure Active Directory tenant.It will make your life much easier… Make it the second step in your operations after creating the Azure subscription. 

Second: Grant your guests or contractors access to it

To do this, you'll need to provide them with an account or allow them to use their existing account to access your resources.Which approach is better? Before we answer that, let's start with the types of accounts available. Your choices are:

1. Azure AD account for your tenant

You create a dedicated account in your Azure AD tenant with a local username and password. It is similar to any other user in your tenant; you have to manage it and provide a username and password to your guest.

  • Pros: Easy to start with, just create one and you are done.
  • Cons: You need to manage it in terms of password and lifecycle. It is also the same as any other user account in your tenant. It will grant access to whatever your users have access to.

2. Azure AD account in another tenant

Your guest might already have an Azure AD account from a different organisation. Or you can create one in a dedicated tenant which might be invited to join your tenant.

  • Pros: In the case of an existing account you don't force people to remember a new username and password. That is always good.
  • Cons: If you use your dedicated tenant for this purpose you will still need to manage the user lifecycle and, depending on the required functionality, some additional licensing might apply.

3. A consumer grade Microsoft Account

You can invite a user with a Microsoft Account to join your Azure AD tenant. These are consumer accounts, so use it as a last resort only.

  • Pros: Easy to use, usually they will have one, and they are familiar with it.
  • Cons: A consumer account is beyond your control and that of the organisation to which this user belongs. No one will shut it down, because an employee can leave the organisation and you won't know what policies are applied to it. Not to mention, ""Funny Bear 13"" could appear in your directory.

Clearly, the best choice is always to use the option where you have the most control over accounts.Tip #2: Always use organisational, Azure AD accounts to grant access to your Azure subscription and don't use a consumer grade Microsoft Account. By doing it this way, you have more control over the accounts which are getting access to your Azure resources.

Third: Managing organisational accounts

So, we've eliminated option three. You will only use organisational accounts to grant access to your Azure subscription (good decision!).But now the question is, should you use a dedicated Azure AD tenant or invite users with their existing accounts? To answer that, we give you the following decision tree:

  1. The user has an existing Azure AD account in their organisation – use it and invite it to your Azure AD.
  2. This person doesn't have an Azure AD account – create one in your dedicated Azure AD tenant.
  3. If you decide not to use a dedicated tenant for one reason or another, create one in your tenant.

Why this order?

Simple. If the user has an existing Azure AD account, it means it's managed by another organisation. This includes password policies, access methods, lifecycle etc.

  1. It allows a user to access that organisation's resources, so there is a chance that if needed, it will be closed by the first organisation and you will not have to worry about this.
  2. It also lets the user use the same access credentials – fewer passwords are better for security.
  3. Creating an account puts the headache of managing this account. Do you need it?

Dedicated tenant vs your current Azure AD

You might have noticed that we mentioned a dedicated Azure AD tenant a few times here.If you remember the separated forests in your on-premises environment for managing accounts of external users, then this is basically the same concept.You can establish a dedicated tenant for managing external accounts – let's call it – through the standard tenant handling your enterprise users for a domain like

Why do it this way?

Separating your guest users from your production tenant gives you an additional layer of control and a security boundary. These users will not get the same access level as the standard users in your organisation. You will have to invite them and assign access.A little more admin overhead formore control. A good tradeoff, if you ask me.

Inviting guests

At the dawn of Azure AD and while using the classic portal for managing Azure there was (and still is) an option available to invite guests in the account creation process.Go to the classic Azure portal, Azure AD management, and start a new user creation process. The first step is to select the type of user or, better said, the source of authority. Your choices are:

  • New user in your organisation – self-explanatory, you are creating a user in your tenant.
  • A user with an existing Microsoft Account – you are inviting a Microsoft Account to join your organisation. You don't want to do this at scale.
  • A user in another Microsoft Azure AD directory – adding a user from another Azure AD (we will cover this in a moment).
  • A user at a partner company – this is inviting a guest user with an existing Azure AD account.

What is the difference between the last two options? They look pretty similar.

  • A user in another Microsoft Azure AD directory – using this option is the same as directly adding a user over a trust to your tenant. It requires admin rights in both tenants. You're basically working in your tenant, then logging on to another tenant, picking up a user, getting back to your original tenant and creating a ""reference"" to the user you have picked up.

Sounds simple, but the key problem here is to have admin credentials to both tenants. This is rarely the case.

  • A user at a partner company – the second option opens a different world for you. You can invite the user to join your tenant without having any access to it. It is using Azure AD B2B feature of the directory. If you pick it, you are provided with the helpful option of uploading a CSV file (right?).

It is 2023, do we need to use the CSV file? Is this the best we can do? Luckily for us – no! We can do better than this.

Azure AD B2B 101

What is Azure AD B2B? Is it a separate type of directory? No, it is a function of Microsoft Entra built to allow one organisation to invite a user from another to work on the same applications and resources.

Benefits of using Azure AD B2B (or Microsoft Entra External ID):

  • When you invite users from other organisations, they are created as objects in your directory. However, all account management stays with the original tenant.
  • You can granularly control which resources this account has access to in your tenant.
  • There is the possibility to enforce your policies on it. If MFA is required to access your resources and it was not done in the original tenant, you can do it on your side.
  • You also have an option to use conditional access to manage these accounts' access to your resources.

You are allowing the user access to your resources and applying your policies, while leaving the responsibility for managing the account lifecycle in its original organisation.Tip #3: Use Azure AD B2B as a way to invite users into your organisation and Azure AD tenant for granting them access to your resources and applications.

Managing users in Azure AD B2B

In the new Azure portal, you can use Azure AD B2B directly from user management.Getting back to this CSV file – do we have to use it? As you can see – no. CSV, however, allows us to add users in bulk.In the final version of Azure AD B2B you can still do this, but through an invitation API rather than a CSV file. You can also integrate it into your onboarding process.What? API? That means we need to write code! Don't worry, for those who are not developers, use PowerShell cmdlet.Tip #4: Build your procedures around inviting guests.Use an invitation API and PowerShell to automate this task so you don't have to rely on the manual actions from administrators.

Wrapping it up – a real-world use case

This scenario is not a theoretical one. It is what we use and practice on a daily basis at SoftwareOne.Here's the lowdown on the project we are working on for a manufacturing company:

  • Our consultants are working on the delivery of the project which combines Azure services with IoT, Dynamics CRM, and data analytics.
  • To work on a project, they need access to the customer's Azure subscription, SharePoint files hosted on Office 365 and Visual Studio Team services for work items and source code control.


Instead of creating a new set of accounts for them, they were invited to the target directory with SoftwareOne accounts using Azure AD B2B and were granted access to the necessary resources. Bam!With Azure AD B2B they don't have to maintain separate accounts, and they get the benefit of full SSO to target resources.Ok, time to wrap up this post. It does not cover the entire area of managing access on the Azure platform – there is still lots to cover like role management, auditing and monitoring.


SoftwareOne blog editorial team

Blog Editorial Team

We analyse the latest IT trends and industry-relevant innovations to keep you up-to-date with the latest technology.