Automated Groups in Microsoft Entra ID: Practice, Licensing, and Limitations
Automated Groups simplify the management of user accounts and devices in hybrid IT environments. They reduce manual effort, minimize error sources, and save time. Microsoft Entra ID offers dynamic groups as an effective way to automate the management of access rights, license assignments, and policies.
Thanks to real-time reaction to attribute changes, group memberships always remain up to date. This enables more efficient processes – in Microsoft 365, Azure services, and even in connection with on-premises structures. Nevertheless, automated groups encounter technical and organizational limits in practice.
🔁 Synchronize groups and filter members – automated, scheduled, and without a P2 license:
With the software solution DynamicSync from FirstAttribute, you can manage groups in Microsoft Entra ID flexibly and efficiently – perfect for hybrid environments.
Index
What automated Groups in Entra ID can do – and why they are so useful
How Automated Groups Work and Their Benefits
Automated groups in Entra ID are based on rules that automatically categorize users or devices into groups according to attributes such as department, location, or job title. Administrators define these rules in the Entra Admin Center or via PowerShell. Once an attribute changes, group membership is automatically adjusted. For each rule, a preview function is available to verify if the intended members are correctly selected — a feature introduced in the portal at the end of 2024. Validation is limited to a maximum of 20 users or devices per operation.
The benefits are especially clear in hybrid networks. Using Entra Cloud Sync, groups can be synchronized bidirectionally between on-premises Active Directory and Entra ID. Attributes like “Manager” or “Department” can be centrally maintained and mirrored to the cloud. This creates a seamless attribute-based access control system, regardless of whether applications are delivered on-premises or in the cloud.
Using dynamic user assignments for groups in Entra ID
Licensing and Limitations of Dynamic Groups
Automated groups in Entra ID require P1 or P2 licenses, which must be considered during planning. The use of dynamic groups in Entra ID is tied to a specific license level. For every unique person who is a member of at least one dynamic group, a Microsoft Entra ID Premium P1 license must be available in the tenant. This rule applies even if the license is not assigned directly.
Attention! Despite automation, dynamic groups may not always be the best choice. In small businesses with infrequent changes or in highly sensitive security groups, manual management can be more controlled and secure. Static groups offer more control where role-based assignments are deliberately restricted.
For advanced features such as Access Reviews, lifecycle workflows, or the use of Access Packages for governance, an Entra ID Premium P2 license is additionally required. Companies should coordinate their license planning early with the group structure and desired automation functions. There are no license requirements for device-only groups.
👉 For those who can forego complex dynamic group scenarios but still need automated group assignments, our solution DynamicSync offers a license-friendly alternative.
Practical Use Cases for Automated Groups
A typical use case is license assignment. New employees whose user object has the attribute “Department = HR” automatically receive the appropriate Microsoft 365 licenses. If the attribute is removed or changed, the licenses are revoked. This automation reduces errors, prevents over-licensing, and eases the burden on IT.
Practical scenarios from IT daily life – Assign licenses dynamically
Another example concerns Microsoft Teams. All employees with the attribute “Region = EMEA” can be automatically assigned to a regional team structure, including access to SharePoint libraries, channels, and Outlook groups. In cross-department projects, the rule user.jobTitle -match 'Legal Advisor' ensures that employees in the legal department get temporary access to HR resources without manual group assignment.
Advanced scenarios are possible with multi-valued properties and operators like -any, -all, or -in. For example, all users whose assignedPlans contain a specific service plan or whose proxyAddresses start with a certain domain can be grouped together. Null values or dynamic time comparisons, such as using system.now, can also be included in rule definitions. For these complex rules, Entra ID supports direct text input with a maximum rule size of 3,072 characters.
Administrative control is provided by the validation function. It shows for each evaluated user whether and why they are part of the group. This allows early detection of rule conflicts.
Technical Limitations and Strategic Risks of Automated Groups
Object Types: Limited to Users or Devices
Automated groups are powerful but not infinitely flexible. A group may contain either users or devices, but not both at the same time. While security groups support both object types, M365 groups are designed exclusively for users. Nesting is not directly possible. Although the isMember criterion can be used to check membership in other groups, true group nesting is not supported.
Delays in Rule Processing
Rule processing does not happen in real time. Depending on volume and system load, it can take up to 24 hours for changes to take effect. In practice, update times are usually under an hour. When many objects are changed at once, for example during bulk updates in the HR system, it is recommended to temporarily pause non-critical groups in the admin center to better manage compute resources.
Limits on Number of Groups and Rules
A single Entra ID tenant can contain a maximum of 15,000 dynamic groups. This limit becomes relevant in highly fragmented structures or multi-tenant environments. Managing complex groups is further limited by the rule generator constraint, which allows a maximum of five expressions. For more extensive rules, the use of the text input field is required.
Risks When Converting Groups
Caution is also advised when converting groups. When an existing static group is converted into a dynamic group, it temporarily loses all members until rule processing is complete. These processes can be managed via PowerShell with functions like ConvertStaticGroupToDynamic or ConvertDynamicGroupToStatic. The properties GroupTypes and MembershipRuleProcessingState play a key role in this.
Performance and Rule Optimization
The complexity of rule processing makes performance optimization essential. Microsoft recommends largely avoiding inefficient operators like -match or -contains. Instead, -eq, -startswith, and -in offer significantly better execution speed. Redundant criteria, such as combinations of -eq and -startswith, should also be avoided.
Recognizing and Controlling Security Risks
Automation also increases the attack surface. If user attribute management is not sufficiently protected, manipulated values can enable unwanted group access. An attacker who compromises a user account and changes the job title to “Administrator” can thereby gain access to privileged groups, such as databases, license structures, or administrative applications.
The responsibility lies with attribute maintenance. Permissions to edit attributes should be strictly limited. Access reviews help regularly verify unwanted group memberships. Lifecycle workflows ensure group memberships are correctly updated when employees change departments or leave.
Managing Entra ID Groups with DynamicSync
With DynamicSync, you can manage groups in Microsoft Entra ID automatically and flexibly—without a Premium P2 license. Whether M365, security, or distribution groups: DynamicSync saves time, prevents errors, and significantly reduces manual effort.
The cloud-based service offers:
🔁 Automatic synchronization of groups in Entra ID
🔄 Member transfer from AD groups to M365 groups
🧩 Filtering by attributes such as department, location, or license
🕒 Scheduled updates — daily, weekly, or customized
💬 Full control in Teams: No automatic re-adding of deleted members
🔒 Improved visibility and security for M365 permissions
✅ Include/exclude lists for fine-grained control
Whether you continue using static groups or want to complement them with dynamic logic, DynamicSync adapts to your needs and delivers greater efficiency in group management.
Conclusion
Dynamic groups in Entra ID are an effective tool for automating access rights, license assignments, and device management—especially in hybrid networks and growing user bases. They increase efficiency and security but require solid understanding of rule mechanisms, technical limitations, and licensing dependencies.
Those who combine the advantages of dynamic groups with complementary tools like DynamicSync and robust governance create a future-proof, low-maintenance, and compliant identity management system.
Dynamic groups in Entra ID – Find out more
DynamicSync is an automation software for cloud groups from FirstAttribute AG. As a pure cloud service (SaaS), DynamicSync specializes in dynamic and automatic group synchronization in
Entra ID.
In addition to the free online demo, our friendly staff are also available to answer your questions by phone. Call us on +49 81 969 984 330.