# Microsoft Agent 365: what it does, how it is licensed and who needs a license

> What Microsoft Agent 365 does, how its per-user license works, who must hold one, the prerequisites, and why Entra, Purview and Defender stay separate.

Canonical: https://o365hq.com/blog/microsoft-agent-365-what-it-does-licensing-and-who-needs-a-license
Provider: IT Partner LLC — US Microsoft partner since 2006. Book: https://o365hq.com/book

Published: 2026-11-11 · IT Partner

Microsoft Agent 365 is Microsoft's control plane for AI agents: a registry of the agents in your tenant, plus observability, governance and security for them, generally available since 1 May 2026. It is one per-user license, $15.00 per user per month standalone or included in Microsoft 365 E7 at $99.00 (November 2026 price list). Agents are never licensed; the people who use, own, sponsor or manage them are. It does not replace Microsoft Entra, Microsoft Purview or Microsoft Defender. It extends them to agents, and Microsoft's Product Terms require a qualifying base license underneath it.

## What Agent 365 is, in Microsoft's words

Microsoft's product page calls Agent 365 "the control plane to observe, secure, and govern AI agents". The Microsoft Security Blog announced general availability for commercial customers on 1 May 2026.

Its capabilities fall into three areas:

- **Observability:** the agent registry, an agents map of how agents connect to tools and to each other, and agent analytics.
- **Governance:** onboarding through an IT-controlled approval flow, control of which users, data, tools and MCP servers an agent may use, lifecycle rules, and audit logging.
- **Security:** Conditional Access for agent identities, data security for what agents read and create, and threat protection.

It is not a place to build agents; [Copilot Studio and Microsoft Foundry](/blog/copilot-studio-vs-azure-ai-foundry-which-agent-platform-what-it-costs-and-when-to-bring-us-in) are. Agent 365 is worked through the Microsoft 365 admin center, Entra, Purview, Defender and Intune, and our [agent governance](/blog/agent-governance-microsoft-365-ai-2026) article covers the operating model those tools assume.

The question usually arrives with a budget attached. One IT team we spoke with in November 2026, at an organization with a few hundred staff, asked whether Agent 365 is one product or tiers, who needs a license, and whether licensing everyone buys visibility.

## Which agents it can register and govern, and what an agent needs

Microsoft's product page states the rule: "Any agent published through Microsoft 365 channels and registered with an Entra Agent ID will automatically appear in the Agent 365 inventory. Agents built outside these environments will require additional steps."

| Agent source | How it reaches the registry | What Microsoft says you get |
| --- | --- | --- |
| Microsoft's agents, Copilot Studio, Agent Builder, SharePoint, Foundry | Automatically, once published through Microsoft 365 channels with an Entra Agent ID | A registry entry; drafts shown for Copilot Studio only |
| Partner agents built with the Agent 365 SDK | Through the SDK | Observed, governed and secured with no integration work by IT |
| Agents on Amazon Bedrock and Google Cloud | Registry sync, a licensed feature announced in public preview on 1 May 2026 | Inventory and limited actions; full controls need the SDK |
| Custom agents built elsewhere | Add the SDK, or register the agent yourself | With the SDK, an Entra-backed identity and extended observability |

The registry also counts "unmanaged agents", defined as agents "created or managed outside of Agent 365, without its risk protection and observability."

One limit: a connector or MCP server set up inside a non-Microsoft assistant to reach another non-Microsoft app follows none of these paths, and Microsoft's pages do not describe Agent 365 inventorying or controlling it. It is governed in those two services' admin settings, while Entra user consent settings decide which applications may be granted access to your Microsoft 365 data.

## How it is licensed: per user, and agents are never licensed

Microsoft's licensing FAQ (checked 11 November 2026) is direct: "Agent 365 is licensed per user, whether purchased as part of Microsoft 365 E7 or as a standalone offering. Agents do not require their own licenses." Blueprints, agents and agent instances "are not licensed separately", and the Product Terms name the license Agent 365 (User SL), a user subscription license.

Who must hold a license, in the FAQ's words:

- "Users who delegate their access to agents" (agents acting for a signed-in person).
- "The owner, sponsor or the manager of agents with own access" (agents running under their own identity).

Microsoft then recommends broader coverage: everyone who interacts with, manages or sponsors managed agents, and all Microsoft 365 Copilot users. It also acknowledges that this guidance is hard to apply because visibility into user-level agent interactions is limited. Another passage says a license "is required only for users who interact with, manage, or sponsor agents that use Agent 365 premium capabilities." If the two passages give different counts for your tenant, get the answer in writing before ordering.

The same FAQ adds three rules:

- Licensing is "contractually enforced". When an agent is tied to an unlicensed user, "the activity is not entitled to Agent 365 protections."
- "Multiplexing, or pooling services to reduce the number of required licenses, is not permitted."
- "There are no consumption-based costs for Agent 365 yet."

[Agent 365](/subscriptions/agent-365) is $15.00 per user per month, and [Microsoft 365 E7](/subscriptions/microsoft-365-e7), which includes it, is $99.00 (November 2026 price list, annual commitment billed annually). E7 is not required (our [E7 article](/blog/microsoft-365-e7-frontier-suite-99-ai-bundle) has the bundle arithmetic), and Agent 365 is not part of Microsoft 365 E3 or E5.

One gap: Entra documentation says an agent with its own user account can be assigned licenses for a mailbox and calendar. The FAQ does not say which it needs, so confirm before purchase.

## Prerequisites: what must already be licensed

Agent 365 cannot be assigned to just any user. The Product Terms (checked 11 November 2026) list its prerequisite licenses: Microsoft 365 A5, E5 or G5; Microsoft 365 Business Premium; Microsoft Defender Suite and Microsoft Purview Suite together; their education editions; or Microsoft Defender and Purview Suite FLW for frontline workers.

The licensing FAQ turns that into routes:

- **[Microsoft 365 E5](/subscriptions/microsoft-365-e5):** nothing more. E5 at $60.00 plus Agent 365 at $15.00 is $75.00 per user per month (November 2026 price list).
- **Microsoft 365 E3:** both Defender Suite and Purview Suite first.
- **[Microsoft 365 Business Premium](/subscriptions/microsoft-365-business-premium):** eligible as it stands. To unlock the functionality, Microsoft says you also need Defender Suite and Purview Suite for SMB, "although these are not formal prerequisites."
- **Microsoft 365 E7:** nothing. Agent 365 is a component.

Microsoft's reason: "core Agent 365 functionality relies on technical capabilities from the underlying licenses being enabled." Its example: in a tenant with E3 plus Copilot users and E5 users, only the E5 users are eligible. The FAQ calls the prerequisites a change and says signed contracts stay valid until renewal, but gives no effective date, so confirm your position before renewal.

Windows 365 for Agents, a Cloud PC runtime for agents, is a separate add-on in the Product Terms. Microsoft bills it on usage, and that metered charge is yours, outside the per-user price.

The case for holding Agent 365 inside one license, and who should not, is in [Microsoft 365 E7 as the one license](/blog/microsoft-365-e7-one-license-for-e5-copilot-agent-365-and-entra-suite).

## One product or tiers?

One product. The Product Terms list a single Agent 365 user license, with no Plan 1 and Plan 2, plus the separate Windows 365 for Agents add-on.

What Microsoft does describe is two levels of capability, which its FAQ calls a tiered model. Every Microsoft cloud subscription customer gets the foundational level for the whole tenant with no Agent 365 license. Premium capabilities need the license.

| Included with a Microsoft cloud subscription | Requires an Agent 365 license |
| --- | --- |
| Agent identity and the agent registry | Advanced usage insights, agents map, registry sync |
| Basic agent usage insights | Identity governance, lifecycle automation, tool controls, policy templates |
| Admin actions: publish, deploy, block, delete, approve, reassign | Conditional Access, identity protection and network controls for agents |
| Audit logs and eDiscovery for agent activity | Purview and Defender for agents: DSPM, DLP, posture, threat detection |

The list is from Microsoft's licensing FAQ. Two caveats. "Audit logs and eDiscovery for agent activity" appears on both sides of Microsoft's own list, so ask which depth each level gives. And the FAQ says premium capabilities "may vary in depth or availability depending on the agent type, platform, or level of integration."

## What it does not do: Entra, Purview and Defender stay separate products

Microsoft Learn says Agent 365 "extends your existing security infrastructure" (Defender, Entra and Purview) to agents. It adds agent-aware features to those products and does not contain them.

- **Microsoft Entra.** Entra Agent ID gives agents their own identities and "is available for all Microsoft Entra customers." Conditional Access for agents requires Microsoft 365 E7, or Agent 365 paired with at least Entra ID P1 or Microsoft 365 E3.
- **Microsoft Purview.** Sensitivity labels, DLP and DSPM are Purview. You add agent instances to Purview policies "as you would a user", and content an agent creates does not inherit labels from its sources. DSPM works without Agent 365; its agent-specific insights need Agent 365 or E7.
- **Microsoft Defender.** Since 1 July 2026, discovery, posture and threat detection for Copilot Studio and Foundry agents require an Agent 365 license and are no longer covered by Defender for Cloud Apps or Defender for Cloud licenses.

[Microsoft Defender for Cloud Apps](/subscriptions/microsoft-defender-for-cloud-apps) ($3.50 per user per month, November 2026 price list) does a different job. It discovers the generative AI apps people use and lets you mark them unsanctioned, which blocks them automatically where the tenant uses Defender for Endpoint.

So Agent 365 is the wrong first purchase when the problem is staff pasting data into public AI tools; that is a Defender for Cloud Apps and Purview problem. It is the right purchase when agents exist and nobody can say who owns them. [AI Security for Microsoft 365 Copilot and Agents](/services/ai-security-microsoft-365-copilot-agents) (from $6,950, 2 to 3 weeks) is our engagement across all three layers. Where Agent 365 sits among the other layers is in [AI governance in a Microsoft 365 organization](/blog/ai-governance-in-a-microsoft-365-organization-four-layers-and-the-order-to-build-them), and the connector question is in [AI connectors and MCP servers](/blog/ai-connectors-and-mcp-servers-how-to-control-which-assistants-reach-your-business-apps).

## A first-month plan that needs no Agent 365 license

Everything below uses the foundational level, so it can precede a purchase decision.

1. **Week 1, inventory.** In the Microsoft 365 admin center open Agents, All agents, Registry. Microsoft says viewing all agents "doesn't require a specific license", only a role such as AI Reader. Export the list and record the three tiles: total agents, agents without owners, unmanaged agents.
2. **Week 2, owners.** Give every agent an owner (the technical administrator) and a sponsor (the business person accountable for it). Entra Agent ID requires at least one sponsor for each agent identity.
3. **Week 3, orphaned agents.** Open the "Agents without owners" card and block what nobody claims. A management rule can reassign ownerless Agent Builder agents to the previous owner's manager; Microsoft's FAQ lists automated lifecycle actions among the licensed capabilities, so if the rule is not offered in your tenant, reassign each agent by hand, which is a foundational admin action.
4. **Week 4, a policy for who may publish.** In agent settings decide the allowed agent types, who may share, and which groups may use agents at all. Submitted agents wait in the Requests queue until an administrator publishes or rejects them.

Then count for licensing. Microsoft names two reports with no license prerequisite: active users of agents in Microsoft 365 Copilot, and the registry's agent owners.

[AI Agent Inventory and Lifecycle Governance Implementation](/services/ai-agent-governance-implementation) ($4,950 per project, 3 weeks, up to 25 agents) builds the registry, the approval workflow and the first review. One worrying agent can be tested with the [Copilot Studio Agent Security Review and Red-Team Test](/services/copilot-studio-agent-security-review) ($2,950, 2 weeks), and [Managed AI Agent Operations and Optimization](/services/managed-ai-agent-operations) ($950 per month) keeps a monthly review going. Always-on agents such as [Microsoft Scout](/blog/microsoft-scout-always-on-agent-what-it-is-and-what-to-prepare) belong in the same inventory.

## Frequently asked questions

### Is Agent 365 one product or tiered like the Defender plans?

One product: a single per-user license with no plan levels. Microsoft does split the capabilities in two. A foundational set (agent identity, the registry, basic usage insights, core admin actions) comes with any Microsoft cloud subscription. Premium observability, governance and security features require the license, standalone or inside Microsoft 365 E7.

### Who needs an Agent 365 license?

People, never agents. Microsoft requires a license for users who delegate their access to an agent, and for the owner, sponsor or manager of an agent that runs with its own access. It recommends also licensing everyone who interacts with managed agents. Each licensed user needs a prerequisite license first, such as Microsoft 365 E5 or Business Premium.

### If I do not know who is using agents, can I license everyone to get visibility?

You do not need to. The registry, agent owners and basic usage insights need no license. Premium signals appear once the first license is assigned, but entitlement stays per user: activity tied to an unlicensed user is out of compliance, and pooling is not permitted. Only users with a prerequisite license can be licensed. Broad licensing is the right call when most staff already use agents that act on their behalf, because those users are in the required group.

### Does Agent 365 include Defender for Cloud Apps and Purview?

No. They are separate products, and Agent 365 depends on them: the Product Terms require Microsoft 365 E5, Business Premium, or the Defender Suite and Purview Suite underneath it. Since 1 July 2026, agent discovery and threat detection for Copilot Studio and Foundry agents need an Agent 365 license and are not covered by a Defender for Cloud Apps license.

### Does Agent 365 govern agents and connectors outside Microsoft?

Partly. Partner agents built with the Agent 365 SDK are managed in the control plane, and registry sync brings in agents from Amazon Bedrock and Google Cloud with limited actions. A connector or MCP server set up inside one non-Microsoft service to reach another is not covered by anything Microsoft has published. Control it in those services' admin settings and through Entra app consent.

## Sources

- [Microsoft Agent 365: The Control Plane for Agents](https://www.microsoft.com/en-us/microsoft-agent-365) — Microsoft, checked 2026-11-11
- [Microsoft Licensing FAQs: Microsoft Agent 365](https://www.microsoft.com/licensing/faqs/122) — Microsoft, checked 2026-11-11
- [Product Terms: Agent 365](https://www.microsoft.com/licensing/terms/productoffering/Agent365/MCA) — Microsoft, checked 2026-11-11
- [Microsoft Agent 365, now generally available, expands capabilities and integrations](https://www.microsoft.com/en-us/security/blog/2026/05/01/microsoft-agent-365-now-generally-available-expands-capabilities-and-integrations/) — Microsoft Security Blog, 1 May 2026
- [Agent management in Microsoft 365 admin center](https://learn.microsoft.com/en-us/microsoft-365/admin/manage/agent-365-overview) — Microsoft Learn, 21 April 2026
- [Manage agent registry in Microsoft 365 admin center](https://learn.microsoft.com/en-us/microsoft-365/admin/manage/agent-registry) — Microsoft Learn, 1 May 2026
- [Agent settings in Microsoft 365 admin center](https://learn.microsoft.com/en-us/microsoft-365/admin/manage/agent-settings) — Microsoft Learn, 9 April 2026
- [Agent Registry convergence with Microsoft Agent 365](https://learn.microsoft.com/en-us/entra/agent-id/agent-registry-convergence) — Microsoft Learn, 5 April 2026
- [What is Microsoft Entra Agent ID?](https://learn.microsoft.com/en-us/entra/agent-id/what-is-microsoft-entra-agent-id) — Microsoft Learn, licensing text 14 May 2026
- [Administrative relationships in Microsoft Entra Agent ID](https://learn.microsoft.com/en-us/entra/agent-id/agent-owners-sponsors-managers) — Microsoft Learn, 16 April 2026
- [Conditional Access for agents](https://learn.microsoft.com/en-us/entra/identity/conditional-access/agent-id) — Microsoft Learn, 31 July 2026
- [Configure how users consent to applications](https://learn.microsoft.com/en-us/entra/identity/enterprise-apps/configure-user-consent) — Microsoft Learn, 15 June 2025
- [Use Microsoft Purview to manage data security and compliance for Microsoft Agent 365](https://learn.microsoft.com/en-us/purview/ai-agent-365) — Microsoft Learn, 1 May 2026
- [Secure AI agents at scale using Microsoft Agent 365](https://learn.microsoft.com/en-us/security/security-for-ai/agent-365-security) — Microsoft Learn, 29 April 2026
- [Transition Microsoft Copilot Studio and Microsoft Foundry agent security capabilities to Microsoft Agent 365](https://learn.microsoft.com/en-us/defender-xdr/security-for-ai/transition-agent-security-to-agent-365) — Microsoft Learn, 2 June 2026
- [Govern discovered apps](https://learn.microsoft.com/en-us/defender-cloud-apps/governance-discovery) — Microsoft Learn, 3 July 2026
- [Connect external agent platforms to Agent 365 via registry sync](https://microsoft.github.io/zerotrustassessment/docs/workshop-guidance/AI/AI_175) — Microsoft Zero Trust workshop guidance, checked 2026-11-11

## Key takeaways

- Microsoft Agent 365 has been generally available since 1 May 2026 as the control plane for AI agents: a registry plus observability, governance and security, worked through the Microsoft 365 admin center, Entra, Purview and Defender.
- It is licensed per user at $15.00 per user per month standalone, or inside Microsoft 365 E7 at $99.00 (November 2026 price list); agents, blueprints and agent instances are never licensed.
- Microsoft requires a license for users who delegate their access to agents and for the owner, sponsor or manager of agents with their own access, and recommends licensing everyone who interacts with managed agents.
- Agent 365 can only be assigned to users who hold a prerequisite license: Microsoft 365 E5, Business Premium, or the Defender Suite and Purview Suite added to E3.
- There are no plan levels, but agent identity, the registry, basic usage insights and core admin actions come with any Microsoft cloud subscription, so the inventory can be built before buying.
- Entra, Purview and Defender remain separate products, and since 1 July 2026 agent security in Defender for Copilot Studio and Foundry agents requires an Agent 365 license.

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If you want the registry, owners and approval workflow built instead of read about, start with [AI Agent Inventory and Lifecycle Governance Implementation](/services/ai-agent-governance-implementation): a fixed price quoted in writing before work begins, and you pay after you approve delivery.