Azure Active Directory (Azure AD) tenant management is the process of managing your organization's identity and access management (IAM) needs using Azure AD.
A tenant in Azure AD is a dedicated instance that's created automatically when your organization signs up for a Microsoft cloud service subscription, such as Microsoft 365, Office 365, or Azure. Depending on the needs of your organization, you may have one or multiple tenants set up in Azure AD.
The task of managing your tenant architecture in Azure AD is usually handled by your organization's IT team. A few key responsibilities include:
In this article, we walk through a step-by-step list of best practices for setting up, configuring, managing, securing, and monitoring your Azure AD tenant architecture in Microsoft 365. Topics include tenant hierarchy, user access control, licensing requirements, security configurations, auditing, and more. We also share tips for cost efficiency and tools to automate mundane tasks.
This article covers:
Managing Entra ID (formerly Azure AD) tenant environments comes with unique operational and security challenges. This article outlines actionable best practices for managing multiple tenants and their architecture—highlighting automation, delegation, policy standardization, and visibility across environments. It emphasizes how to reduce manual errors, enforce consistent baselines, and streamline cross-tenant operations without compromising governance. A must-read for organizations building scalable Microsoft 365 management services.
A "tenant architecture" in Azure AD doesn't exist in the way you might think. Azure AD doesn't inherently support a hierarchical architecture for tenants (like parent/child relationships). Each tenant is a standalone entity.
However, the term "tenant architecture" informally describes how organizations choose to structure multiple Azure AD tenants. For example, a large multinational corporation might have separate tenants for each subsidiary or region.
If you're setting up Azure AD for the first time, you’ll need to decide on a tenant hierarchy that works for your organization, assign permissions based on roles, and create access policies so everyone can manage the resources they need.
Start by understanding your organization's structure and needs. Consider factors like size, number of departments, and required autonomy.
The decision made at this stage is crucial, as changing tenant hierarchy later is difficult.
Ensure users have only the permissions they need—the principle of least privilege.
Control who has access to resources and under what conditions, balancing security and usability.
Azure AD is a comprehensive identity and access management service that offers many features for managing user access and licenses, essential for both single and multi-tenant architectures.
Understand the available licensing options—from basic to premium tiers (P1, P2). Choose licensing to match your organization’s needs and budget.
Managing security and compliance involves proactive, ongoing monitoring and responsive action.
Develop a holistic strategy to protect your data and resources, including:
Ensure your organization meets all regulatory and policy requirements:
Large-scale environments, with thousands of users and numerous permissions, quickly become complex. Key approaches include:
Automate repetitive tasks (like bulk user creation, license assignments, settings) to save time and reduce manual errors.
Third-party tools provide enhanced usability and advancement, with features like single sign-on, identity governance, and privileged access management.
CoreView Configuration Manager is a comprehensive tool designed to automate and streamline your Microsoft 365 configurations, including Azure AD.
With CoreView Configuration Manager, you can template ideal configurations and deploy them consistently across multiple tenants. Organizations worldwide use it to run configuration health checks and maintain resilient, backed-up configurations.
CoreView Configuration Manager allows you to enjoy complete control over your tenants' configurations. Ready to give Configuration Manager a try? Request a demo to get started!