MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
An organization with 50,000 users is planning to deploy Microsoft 365 E5. They want to use Microsoft Entra ID P2 features for identity protection and access reviews. However, they notice that Entra ID P2 is included in E5 but not in E3. They also need to ensure compliance with regulatory requirements for data residency. Which additional licensing or configuration is required?
⚠ Common exam trap
MS-900 often tests the misconception that E5 includes everything; candidates may forget that Multi-Geo requires additional licenses even in E5.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Add Microsoft 365 Multi-Geo licenses for users who need data residency in other regions
Microsoft 365 Multi-Geo is the feature that allows an organization to store data at rest in specific geographic locations to meet data residency requirements. Since the organization has 50,000 users and needs data residency in other regions, they must add Multi-Geo licenses for those users. Entra ID P2 is already included in E5, so no separate purchase is needed. Configuring Azure Information Protection policies does not address data residency.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Purchase Microsoft Purview Information Protection add-on
Why it's wrong here
Purchasing Microsoft Purview Information Protection as an add-on is incorrect because this capability is already included in Microsoft 365 E5, making the purchase redundant. More importantly, Purview Information Protection (formerly Azure Information Protection) provides data classification, labeling, and encryption, but it does not control or change the geographic location where data is stored at rest. Data residency is a storage-location requirement, not a labeling or protection requirement, so this add-on would not satisfy the organization's residency needs.
- ✗
Enable data residency by configuring Azure Information Protection policies
Why it's wrong here
Configuring Azure Information Protection policies to 'enable data residency' is a misunderstanding: these policies define labels, retention rules, and encryption settings for documents and emails, but they have no effect on the physical datacenter or regional storage of Exchange Online mailboxes, SharePoint sites, or OneDrive accounts. Data residency requires a tenant-level placement feature, such as Microsoft 365 Multi-Geo, which is an add-on license. Without that licensing, any policy configuration merely controls access and classification—it does not move or pin data to a specific geographic region.
- ✗
Purchase Microsoft Entra ID P2 licenses separately for all users
Why it's wrong here
Purchasing Microsoft Entra ID P2 licenses separately for all users is both redundant and irrelevant in this scenario. Microsoft 365 E5 already includes Entra ID P2, so buying it separately would duplicate identity and access management coverage. Moreover, Entra ID P2 is an identity and security product—it provides features like Privileged Identity Management and Identity Protection, but it has no bearing on where data is stored at rest. Data residency is a workload placement issue, not an identity management issue, so this purchase would not fulfill the organization's residency requirement.
- ✓
Add Microsoft 365 Multi-Geo licenses for users who need data residency in other regions
Why this is correct
Adding Microsoft 365 Multi-Geo licenses for users who need data residency in other regions is the correct action because Multi-Geo is the Microsoft 365 add-on specifically designed to let an organization extend its data sovereignty. With Multi-Geo, administrators can configure satellite regions and assign specific user mailboxes, OneDrive sites, and SharePoint sites to those regions, causing the data to be stored at rest in the chosen geographic location. This satisfies residency requirements for users whose data must remain in other regions, while the tenant's home location continues to host central metadata and other services.
Go deeper
Related to this question
Learn chapter
Microsoft 365 Privacy Features and Trust Centre
Key term
Microsoft Entra ID
Microsoft Entra ID is a cloud-based identity and access management service that lets employees sign in and access resources both inside and outside of your organization.
Key term
Microsoft 365
Microsoft 365 is a subscription-based cloud service from Microsoft that combines productivity tools like Office apps with security, device management, and online storage.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
This MS-900 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MS-900 exam.