Security Defaults and Conditional Access can both protect Microsoft 365 identities, but they serve different licensing, complexity, and control requirements and are not designed to operate together.
Why This Decision Matters
Microsoft 365 accounts provide access to email, files, meetings, applications, administration, and business data. Multifactor authentication is one of the most important identity controls because a stolen password alone should not be enough to enter the environment.
Microsoft Entra provides two common ways to establish an identity-security baseline: Security Defaults and Conditional Access. A small business should understand the differences before disabling one control, creating another, or assuming that both are working together.
What Security Defaults Provides
Security Defaults is a preconfigured set of protections available without Microsoft Entra ID P1 or P2 licensing. It is designed for organizations that need a basic security baseline without building and maintaining custom access policies.
Microsoft currently describes Security Defaults as providing controls that require users to register for multifactor authentication, require administrators to perform multifactor authentication, require users to perform multifactor authentication when necessary, block legacy authentication protocols, block device code flow, and protect privileged activities such as access to administrative portals.
Security Defaults is a managed baseline
It reduces configuration work, but administrators have limited ability to customize which users, applications, devices, or conditions are included.
What Conditional Access Provides
Conditional Access is Microsoft's policy engine for evaluating sign-ins and applying access requirements. Policies can use signals such as the user, administrator role, application, device platform, device compliance, location, client type, authentication strength, and risk information when licensed.
Conditional Access can require multifactor authentication, require an approved authentication strength, require a compliant device, block legacy authentication, limit access from selected locations, apply session controls, or block access entirely.
Licensing Differences
Security Defaults is available to Microsoft Entra Free tenants and Microsoft 365 customers without additional Microsoft Entra premium licensing. Conditional Access requires Microsoft Entra ID P1 or a qualifying Microsoft 365 license for users who benefit from the feature.
Risk-based Conditional Access policies that use Microsoft Entra ID Protection signals require Microsoft Entra ID P2. Other connected controls, such as Microsoft Intune compliance or Microsoft Defender capabilities, also require their own appropriate licensing.
Security Defaults and Conditional Access Are Not Combined
Security Defaults and Conditional Access are not intended to operate as two stacked policy systems. Microsoft documents that creating Conditional Access policies prevents Security Defaults from being enabled.
An organization moving to Conditional Access must recreate the protections it previously received from Security Defaults before relying on the new policy set. Disabling Security Defaults without a replacement plan can create an immediate identity-security gap.
Do not disable Security Defaults first and plan later
Build, test, and validate the Conditional Access replacement policies and emergency access process before completing the transition.
When Security Defaults Is a Good Fit
- The organization has no Microsoft Entra ID P1 or P2 licensing.
- The environment is small and does not require complex exclusions.
- The business needs a basic identity-security baseline quickly.
- There are few legacy applications or unusual authentication workflows.
- The organization does not have staff to maintain custom access policies.
- A consistent tenant-wide baseline is more valuable than customization.
Security Defaults is not a weak choice merely because it is simpler. A correctly enabled baseline is better than an incomplete Conditional Access design that leaves important users or applications unprotected.
When Conditional Access Is a Better Fit
- The organization has Microsoft Entra ID P1 or P2 licensing.
- Administrators require stronger authentication than ordinary users.
- Access must be restricted to compliant or managed devices.
- Guest, vendor, or remote access needs separate controls.
- Specific applications require different authentication rules.
- Locations, client types, or authentication strengths must be evaluated.
- Policies need report-only testing, exclusions, and documented change control.
- Risk-based controls are needed and Microsoft Entra ID P2 is available.
Compare Administrative Effort
Security Defaults is largely managed by Microsoft. The organization still needs user registration, support, recovery, monitoring, and offboarding procedures, but it does not need to design a collection of access policies.
Conditional Access requires policy naming, scope, exclusions, testing, documentation, monitoring, troubleshooting, and recurring review. A small business should not adopt it only because it appears more advanced. The organization must be prepared to operate it safely.
Compare User Experience
Security Defaults provides limited control over when users are prompted and which conditions apply. Conditional Access can target specific situations, which may reduce unnecessary prompts or require stronger authentication for higher-risk work.
More customization can also create inconsistent behavior when policies overlap. Test browsers, desktop applications, mobile applications, guest access, remote work, and required business applications.
Prepare Emergency Access
Before changing identity policies, maintain at least two protected cloud-only emergency access accounts according to current Microsoft guidance. These accounts should not depend on the same authentication method or identity provider as ordinary administrators.
Exclude emergency accounts from Conditional Access policies that block or restrict sign-in, monitor every use, store credentials securely, and test account functionality at least every 90 days.
Inventory Before Migration
List users, administrators, guests, service accounts, shared devices, printers, scanners, scripts, older Office clients, email protocols, automation, and third-party applications.
Identify which identities can complete interactive multifactor authentication and which technical processes need a supported replacement method. Do not solve every compatibility issue with a permanent policy exclusion.
Recreate the Security Defaults Baseline
A Conditional Access migration should include policies that reproduce the important protections previously provided by Security Defaults. Common objectives include:
- Require multifactor authentication for administrators.
- Require multifactor authentication for users.
- Protect access to Microsoft administrative portals.
- Block legacy authentication.
- Control device code flow.
- Protect authentication registration.
Use current Microsoft policy templates and deployment guidance as a starting point, then adjust them to the organization's actual licensing and business needs.
Use Report-Only Mode
Conditional Access report-only mode evaluates a policy without enforcing its grant or block decision. Review the report-only results in Microsoft Entra sign-in logs before turning a policy on.
Look for users who would be blocked, service accounts that cannot satisfy the controls, unknown device states, unexpected applications, and exclusions that are too broad.
Pilot the Transition
Use a pilot group that includes administrators, remote employees, mobile users, executives, finance employees, guests, and users of specialized applications.
Expand the scope in stages. Keep the Security Defaults replacement plan, emergency access procedure, support communication, and rollback plan available during the transition.
Document Every Exclusion
Each exclusion should include the identity, business reason, approver, owner, start date, expiration date, compensating control, and replacement plan.
Review exclusions at least quarterly. An old printer, vendor integration, or troubleshooting exception should not become a permanent path around multifactor authentication.
Monitor the Result
Review sign-in logs, Conditional Access results, failed multifactor authentication, blocked legacy authentication, repeated prompts, application failures, and administrator activity.
Assign primary and backup owners for alerts and troubleshooting. A policy is not complete when it is enabled. It must be monitored and maintained.
Decision Checklist
- Confirm Microsoft Entra licensing.
- Identify the required level of customization.
- Inventory users, applications, and legacy authentication.
- Maintain at least two emergency access accounts.
- Document the Security Defaults protections being replaced.
- Build one clear objective per Conditional Access policy.
- Use report-only mode and a representative pilot group.
- Test all required applications and devices.
- Time-limit and review exclusions.
- Monitor sign-in and policy results.
- Document rollback and support procedures.
- Review the final design quarterly.
Frequently Asked Questions
Can Security Defaults and Conditional Access be used together?
No. Microsoft documents that they are not designed to be combined. Conditional Access policies replace the Security Defaults approach.
Does Conditional Access require licensing for every affected user?
Users who benefit from Conditional Access need appropriate Microsoft Entra ID P1 or qualifying licensing. Risk-based policies require Microsoft Entra ID P2.
Is Conditional Access always better?
It provides more control, but it also requires more administration. Security Defaults may be the better choice for a small organization that needs a reliable baseline without custom policy management.
When Professional Support Helps
Professional support can review licensing, inventory authentication dependencies, compare the two approaches, build replacement policies, protect emergency access, test the transition, and document the final configuration.
Need help applying this?
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J3 Systems Group LLC can implement Conditional Access, email protection, emergency access, monitoring, application consent controls, and supporting security procedures.