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Microsoft Defender for Identity vs Microsoft Entra External ID comparison

 

Comparison Buyer's Guide

Executive Summary

Review summaries and opinions

We asked business professionals to review the solutions they use. Here are some excerpts of what they said:
 

ROI

Sentiment score
4.5
Microsoft Defender for Identity is cost-effective and efficient, offering incident prevention and resolution without complex hardware setups.
Sentiment score
3.6
Users faced challenges with Microsoft Entra External ID but saved costs and time compared to traditional, on-premises solutions.
It has led to cost savings as well as time savings because I can use a single solution for all applications.
Companies can leverage it for setting up external identities without needing to develop their own solutions.
In terms of return on investment, prior to using this product, our company managed our own mail server with all internal authentication happening on premises, resulting in a ROI in the thousands every year.
 

Customer Service

Sentiment score
7.4
Opinions on Microsoft Defender for Identity support vary, highlighting responsiveness, but issues include delays, contact challenges, and false positives.
Sentiment score
4.6
Microsoft Entra External ID support varies; response times, documentation, and regional differences affect user satisfaction and solution accessibility.
Generally, the support is more effective than other providers like Oracle.
The quality of support is very good, but troubleshooting can take time due to complex setups and the need to provide many logs.
Technical support from Microsoft rates an eight on a scale of 1 to 10 for response time.
Companies without a Microsoft license for Entra ID or Azure portal cannot add Azure AD B2C, creating logistical issues for some of my clients who are unable to evaluate the platform.
The support for business applications, infrastructure support, and Entra has been mostly positive with highly skilled technicians.
The documentation is very thorough, reducing the need for support.
 

Scalability Issues

Sentiment score
7.3
Microsoft Defender for Identity efficiently integrates and scales globally, supporting diverse organizational needs within Microsoft’s ecosystem effectively.
Sentiment score
6.0
Microsoft Entra External ID offers scalable security for large enterprises, with distinct policies and strong performance despite some latency issues.
In a Microsoft-centric organization, especially with Azure infrastructure and Office 365, Microsoft Defender for Identity is scalable.
This is one of EID's weak points compared to Azure AD B2C, which offers customizable authentication options, including attribute and password combinations.
End-user workloads experience increased latency in a cloud environment compared to on-premises resources.
Microsoft Entra External ID is quite scalable, and I would rate its scalability between eight and nine out of ten.
 

Stability Issues

Sentiment score
6.9
Microsoft Defender for Identity is highly reliable, with minimal incidents, seamless operation, and consistent ratings between seven and nine.
Sentiment score
4.8
Microsoft Entra External ID is highly stable, reliable, and smooth, with minor rare issues, and positive user feedback.
Microsoft Defender for Identity is quite robust and built on Azure hyperscale infrastructure, with a 99% availability.
We do not see any issues with the stability of Microsoft Defender for Identity.
Having recently started using it, reliability is affirmed, but manual investigation is often performed to verify if alerts identified by auto-remediation are accurate.
I'd rate the stability of the Microsoft Entra External ID as a 10.
The stability of this solution is very good.
I have not encountered any stability issues with Microsoft Entra External ID.
 

Room For Improvement

Microsoft Defender for Identity users seek improved cloud integration, user-friendly features, better support, and streamlined processes for enhanced threat management.
Microsoft Entra External ID needs improved support, integration, pricing, security, UI, and customization for medium-sized businesses.
If Microsoft could develop a feature that indicates when impossible travel is caused by VPN connections, it would prevent unnecessary password resets and session disruptions, especially for VIP users in organizations.
One improvement I would recommend is the integration of an admin application within Teams, allowing easy access to attack information on a mobile platform.
Reducing false positives is something we've been working on with Microsoft.
This is particularly challenging during enterprise agreement renewals, as it's difficult for customers to review costs leading to lengthy negotiations.
Enhanced customizable login options and the ability to use attribute password logins are critical features that are required for Microsoft Entra External ID to gain dominance in the authentication market.
I would like to see a more detailed alert system that provides a summary of why alerts are generated, who is generating them, and the reasons behind it.
 

Setup Cost

Microsoft Defender for Identity is cost-effective with E5 licenses despite complex pricing and competitive against other security solutions.
Microsoft Entra External ID pricing is complex, potentially costly, but scalable, benefiting from Azure expertise and existing subscriptions.
If they can reduce the costs, organizations will be happy, and it will compensate for using the Azure environment, which is more expensive on the infrastructure as a service side.
Ensuring a fair price according to market standards.
From an organization perspective, using E5 licenses is value for money, especially if Azure and Office 365 are already in use.
Regarding pricing, the cost seems high for single sign-on, especially for external applications like Oracle.
Microsoft's pricing is complex and difficult to fathom due to a range of different licensing options.
The cost can be a factor for Microsoft Entra External ID, but in general, it offers a scalable and efficient solution compared to deploying individual solutions.
 

Valuable Features

Microsoft Defender for Identity integrates with Azure to offer comprehensive threat detection, identity protection, and advanced real-time security insights.
Microsoft Entra External ID enhances security, management, and user experience through integration, single sign-on, and adaptive authentication features.
We receive an advance report of risky users, allowing us to take preemptive action before an attack causes damage to organization details.
The most valuable feature is its hybrid artificial intelligence, which gathers forensic data to track and counteract security threats, much like the CSI series in effect.
The advanced threat protection is one of the strengths of Microsoft Defender for Identity, as it utilizes user and entity analytics and can detect indicative attacks.
It is crucial for hybrid environments, especially for integrating existing on-site infrastructures with cloud-based Active Directory, such as in Office 365 implementations.
EID unifies workforce users with external business partners, which is a very strong feature.
The detailed monitoring and reporting in Microsoft Entra External ID support compliance efforts effectively.
 

Categories and Ranking

Microsoft Defender for Iden...
Ranking in Microsoft Security Suite
3rd
Average Rating
8.8
Reviews Sentiment
6.9
Number of Reviews
26
Ranking in other categories
Advanced Threat Protection (ATP) (5th), Identity Threat Detection and Response (ITDR) (3rd)
Microsoft Entra External ID
Ranking in Microsoft Security Suite
21st
Average Rating
7.6
Reviews Sentiment
5.5
Number of Reviews
16
Ranking in other categories
Identity and Access Management as a Service (IDaaS) (IAMaaS) (8th), Customer Identity and Access Management (CIAM) (4th)
 

Mindshare comparison

As of October 2025, in the Microsoft Security Suite category, the mindshare of Microsoft Defender for Identity is 6.5%, down from 7.6% compared to the previous year. The mindshare of Microsoft Entra External ID is 1.3%, up from 0.3% compared to the previous year. It is calculated based on PeerSpot user engagement data.
Microsoft Security Suite Market Share Distribution
ProductMarket Share (%)
Microsoft Defender for Identity6.5%
Microsoft Entra External ID1.3%
Other92.2%
Microsoft Security Suite
 

Featured Reviews

Peter Arabomen - PeerSpot reviewer
Has supported hybrid identity management while integrating well with cloud directory services
The only challenge I have with Microsoft Defender for Identity is the latency. I may not put that entirely on Microsoft, because latency could be network related. At times when trying to authenticate, the prompt is delayed. We tried implementing passwordless authentication, especially for on-premises workloads, but we haven't been able to achieve that. Passwordless authentication is part of the identity functionalities, particularly when it comes to enforcing passwordless for on-premises workloads. In terms of improvements, you can't create OUs on Azure AD. Regarding giving users privileges on what they can do across different OUs, I haven't seen that feature on Microsoft Defender for Identity. Microsoft Defender for Identity needs to be able to plug into third-party applications that are not Microsoft. For instance, with a human resource application used to manage users and leave requests, when staff leaves the organization, they are first exited from that application before AD. Integration between Azure AD and third-party applications would allow automatic syncing when removing staff. The initial setup of Microsoft Defender for Identity is not hard. However, setup is one thing, and getting value from the application end-to-end is another. It can be set up and running from the first day but not functioning optimally. Initially, when we did the setup, it wasn't optimal. Over time, with continuous improvement, which we're still doing, we've gotten to a comfortable level, but there's still room for improvement.
Suresh Kumar Subramaniyan - PeerSpot reviewer
Has supported secure access but still lacks full coverage for external identity challenges
The user experience is acceptable, but Microsoft Entra External ID is not a full-fledged IGA solution. We use different products for complete Identity Governance Administration. Microsoft Entra External ID is suitable for small-scale enterprises implementing identity lifecycle management since most have Active Directory. However, there are several challenges. The out-of-the-box connector has limited features for applications, requiring us to build scheme connectors. While small-scale enterprises can benefit from Microsoft Entra External ID's Identity Governance solution, large-scale enterprises might need different tools from leading market vendors such as SailPoint or Saviynt. Customers face particular challenges with contractor and B2B accounts. Microsoft Entra External ID isn't a complete cloud-based account solution, as it must handle internal employees and collaborate with internal Active Directory. There are delays in the identity lifecycle process, especially for contract partners during onboarding and off-boarding. This might be due to back-end syncing with Active Directory. B2B account removal and provisioning take considerable time. Access governance, particularly access certification for guest users, is time-consuming. Multi-factor authentication enforcement also presents challenges for external users.
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Top Industries

By visitors reading reviews
Computer Software Company
15%
Financial Services Firm
12%
Manufacturing Company
8%
Comms Service Provider
7%
Computer Software Company
17%
Financial Services Firm
11%
Manufacturing Company
9%
Government
7%
 

Company Size

By reviewers
Large Enterprise
Midsize Enterprise
Small Business
By reviewers
Company SizeCount
Small Business7
Midsize Enterprise3
Large Enterprise14
By reviewers
Company SizeCount
Small Business8
Midsize Enterprise2
Large Enterprise6
 

Questions from the Community

What do you like most about Microsoft Defender for Identity?
Microsoft Defender for Identity provides excellent visibility into threats by leveraging real-time analytics and data intelligence.
What needs improvement with Microsoft Defender for Identity?
The only challenge I have with Microsoft Defender for Identity is the latency. I may not put that entirely on Microsoft, because latency could be network related. At times when trying to authentica...
What is your primary use case for Microsoft Defender for Identity?
I've used Microsoft Defender for Identity primarily for provisioning users on Azure AD and Microsoft authentication. For hybrid scenarios, I integrate on-premises AD to Azure AD. We use AD Connect ...
What is your experience regarding pricing and costs for Microsoft Entra External ID?
The only problem that you might face with Microsoft now is their complex licensing model.
What needs improvement with Microsoft Entra External ID?
For the last four or five years, I have been in an IT manager function, focusing on making things happen and having technical persons execute tasks. In the last three months, I have transitioned to...
What is your primary use case for Microsoft Entra External ID?
I am looking for a new solution and investigating existing products. We are already working with Microsoft Intune and SOTI. I have been working in the past with a Kaseya product, specifically Datto...
 

Also Known As

Azure Advanced Threat Protection, Azure ATP, MS Defender for Identity
Azure Active Directory External Identities
 

Overview

 

Sample Customers

Microsoft Defender for Identity is trusted by companies such as St. Luke’s University Health Network, Ansell, and more.
Information Not Available
Find out what your peers are saying about Microsoft Defender for Identity vs. Microsoft Entra External ID and other solutions. Updated: September 2025.
868,759 professionals have used our research since 2012.