Microsoft 365 vs. Entra ID: FAQ | Electric Knowledge Base

Electric offers two separate Microsoft integrations – Microsoft 365 and Microsoft Entra ID – that serve different purposes and can be used independently or together. This document outlines what each integration supports and answers common questions to help determine which one (or both) is right for your organization.

Comparison

Capability	Microsoft 365	Entra ID
Create, update, disable, and delete employee accounts	Yes	Yes
Assign Microsoft 365 licenses (E3, E5, Business Premium, etc.)	Yes	No
Add employees to Microsoft 365 groups (Teams, SharePoint, distribution lists)	Yes	No
Add employees to security groups (for access control and SSO policies)	No	Yes

Common Questions

When should we connect Microsoft 365 vs. Entra ID?

Connect Microsoft 365 if you want Electric to create accounts and automatically assign licenses when employees are onboarded, and to add them to Teams channels and SharePoint sites. Connect Entra ID if your priority is identity and access management – adding employees to security groups, enforcing SSO policies, or using your Microsoft directory as the source of truth for employee data. Connect both if you need license management and security group management.

Do both integrations create separate user accounts, or do they share the same one?

They share the same user account. Both integrations create and manage the same underlying user account in Microsoft – there is no duplication. The difference is in what each integration does with that account: Microsoft 365 assigns licenses and adds the user to Microsoft 365 groups, while Entra ID adds them to security groups. The two integrations are fully compatible and designed to be used together when an organization needs both.

Can Entra ID replace the Microsoft 365 integration?

Not if you need license assignment. Entra ID can create and manage employee accounts, but it does not assign Microsoft 365 licenses. If you manage licenses another way (e.g., automatically via group membership rules in Microsoft), Entra ID alone may be enough. Otherwise, the Microsoft 365 integration is required to provision licenses through Electric.

Do we need to connect both to use both?

Yes – each integration is connected separately in Electric. If you want Electric to manage both licenses and security groups, you need to go through the connection flow for each one. Once both are connected, they work together automatically: whichever runs first during onboarding creates the account and sends the welcome email; the second applies its own settings without creating a duplicate account or re-sending credentials.

What is the difference between a Microsoft 365 group and a security group?

A Microsoft 365 group is the group type behind Teams channels, SharePoint sites, and distribution lists – it gives members access to shared collaboration tools. A security group is used purely to control access to apps, files, and conditional access or SSO policies – it has no associated mailbox or workspace. The M365 integration manages Microsoft 365 groups; the Entra ID integration manages security groups. See Compare groups in Microsoft 365 for a full breakdown of all group types.

Why are some of our groups not showing up in Electric?

Electric supports the two group types most commonly used for IT management: Microsoft 365 groups (via the M365 integration) and security groups (via the Entra ID integration). Two other group types are not supported:

Distribution groups – used for email distribution only, these groups are not used for access control or collaboration workspaces and are not managed by either integration.
Mail-enabled security groups – a hybrid group type that combines email distribution with access control. Because they do not fit cleanly into either category Electric manages, they are not currently supported by either integration.