License Management
MS-102 Exam Alignment
MS-102
Objective 1.3 — Manage Microsoft 365 subscriptions and licences: assign and remove licences, manage service plans within a licence, configure group-based licensing, and use PowerShell to manage licence assignments at scale.
- Know that Usage Location must be set before a licence can be assigned
- Assign licences per-user via Licenses and apps tab, or in bulk via Billing → Licences
- Disable individual service plans within a licence (e.g. disable Intune but keep Exchange)
- Configure group-based licensing — requires Entra ID P1; nested groups are not supported
- Use Get-MgSubscribedSku to check available seats via PowerShell
📋 Understanding Your License Subscriptions
💡 What Is a License?
A Microsoft 365 license is a subscription entitlement that grants a user access to a bundle of services. For example, a Microsoft 365 E3 license includes Exchange Online, Teams, SharePoint, OneDrive, Microsoft 365 Apps for Enterprise, Intune, and Entra ID P1. Licenses are purchased per user per month and tracked at the tenant level in Billing → Licenses.
M365 Admin Center › Billing › Licenses
👤 Method 1 — Assigning via User Properties
M365 Admin Center › Users › Active users › [Select user] › Licenses and apps
- 1 Go to Users → Active users and click the name of the user you want to modify.
- 2 In the user panel that slides in from the right, select the Licenses and apps tab.
- 3 Under Select location, choose the user's country. This is mandatory — licenses are region-controlled and a user without a Usage Location set cannot be assigned a license.
- 4 Check the box next to the license you want to assign. Expand the license to enable or disable individual service plans if needed.
- 5 Click Save changes. The license is provisioned within a few minutes.
🏷️ Method 2 — Assigning via Billing > Licenses
- 1 Go to Billing → Licenses and click the subscription name (e.g. Microsoft 365 E3).
- 2 Click Assign licenses at the top of the page.
- 3 In the search box, type the name or email of each user to assign. You can add multiple users at once.
- 4 Review the service plans that will be enabled. Toggle off any services the user should not have access to.
- 5 Click Assign to confirm.
⚠️ Usage Location Is Required
Microsoft requires a Usage Location (country) to be set on a user account before any license can be assigned. This is because some services are not available in all countries for regulatory reasons. If you try to assign a license to a user without a Usage Location, the assignment will fail. Always set Usage Location first — either during user creation or via the user's profile settings.
🔧 Service Plans Within a License
Every Microsoft 365 license is actually a bundle of individual service plans. When you assign a license, all service plans are enabled by default — but you can disable specific ones on a per-user basis.
| Service Plan (in M365 E3) | What It Provides | Disable When? |
|---|---|---|
| Exchange Online (Plan 2) | Mailbox, calendar, email access | User only needs Teams/SharePoint access |
| Microsoft Teams | Chat, meetings, calling, collaboration | External contractors without Teams access |
| SharePoint Online (Plan 2) | Sites, document libraries, OneDrive | Users who should not access SharePoint |
| Microsoft 365 Apps | Word, Excel, PowerPoint, Outlook desktop | Users accessing Office Online only (web apps) |
| Microsoft Intune Plan 1 | Device enrolment and management | Devices managed via third-party MDM |
| Microsoft Entra ID P1 | Conditional Access, SSPR, PIM | Rarely — most tenants need this enabled |
👥 Group-Based Licensing
Manually assigning licenses one by one does not scale. Group-based licensing lets you assign a license to a security group, and every member of that group automatically receives the license.
⚠️ Prerequisite — Microsoft Entra ID P1
Group-based licensing requires Microsoft Entra ID P1 (included in M365 E3 and E5, or available as an add-on). Tenants on Business Basic or Business Standard do not have Entra ID P1 and cannot use group-based licensing without purchasing an add-on.
- 1 Go to Billing → Licenses and click the subscription you want to assign.
- 2 Click Groups tab at the top of the subscription page.
- 3 Click + Assign and search for a Security Group or M365 Group.
- 4 Select the group, review service plans, and click Assign. All current and future members will automatically receive the license.
- Automatic provisioning — Adding a user to the group provisions their license within minutes. No manual action required from the admin.
- Automatic de-provisioning — Removing a user from the group removes their license seat automatically, freeing it for reuse.
- Conflict detection — If a group license assignment fails (e.g. no seats available), the admin center flags the error on the group's licence assignment status page.
- Nested groups not supported — Group-based licensing does not follow nested group membership. Only direct members of the assigned group receive the license.
⚡ PowerShell: License Management
Connect-MgGraph -Scopes "Directory.Read.All" # View all license subscriptions and available seats Get-MgSubscribedSku | Select-Object SkuPartNumber, ConsumedUnits, @{N="Total";E={$_.PrepaidUnits.Enabled}}, @{N="Available";E={$_.PrepaidUnits.Enabled - $_.ConsumedUnits}} # View service plans within E3 (SkuPartNumber = SPE_E3) $sku = Get-MgSubscribedSku | Where-Object {$_.SkuPartNumber -eq "SPE_E3"} $sku.ServicePlans | Select-Object ServicePlanName, ProvisioningStatus
🎓 Interview Q&A
An administrator tries to assign a Microsoft 365 E3 licence to a new user but receives an error. The Billing → Licences page shows 50 available E3 seats. What is the most likely cause?
You want all users in the Marketing Security Group to automatically receive an M365 E3 licence when they join the group, and lose it when they leave. What is the most efficient solution?
An administrator wants to prevent a specific user from using Microsoft Intune device management while keeping all other M365 E3 services active. What is the correct approach?
Your organisation has 300 E3 licences with 298 currently assigned. 15 new employees are joining next week. What must you do before their accounts can be fully provisioned?
Which PowerShell cmdlet retrieves the available licence count and consumed units for all subscriptions in a Microsoft 365 tenant?