MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
This MS-900 practice question tests your understanding of describe microsoft 365 pricing, licensing, and support. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
Your company has a mix of on-premises and cloud users. You plan to move to Microsoft 365 and need to support hybrid identity with password hash synchronization. Which licensing is minimally required?
Why wrong: Entra ID P1 supports password hash sync, but the organization also needs Microsoft 365 workloads; a standalone P1 license does not include Exchange Online etc.
B
Microsoft 365 E3
Microsoft 365 E3 includes Entra ID P1, which supports password hash synchronization, and provides the needed Microsoft 365 services.
C
Microsoft Entra ID P2
Why wrong: P2 includes P1 features plus Identity Protection and Privileged Identity Management, which are not required.
D
Microsoft Entra ID Free
Why wrong: Free does not support password hash synchronization; it only supports cloud-only identities.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Microsoft 365 E3
Microsoft 365 E3 includes Microsoft Entra ID P1, which provides the necessary features for hybrid identity with password hash synchronization (PHS). PHS is a core feature of Entra ID P1, enabling synchronization of password hashes from on-premises Active Directory to Azure AD for seamless authentication. Microsoft 365 E3 is the minimum licensing tier that bundles Entra ID P1, making it the correct choice for this scenario.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Microsoft Entra ID P1
Why it's wrong here
Entra ID P1 supports password hash sync, but the organization also needs Microsoft 365 workloads; a standalone P1 license does not include Exchange Online etc.
✓
Microsoft 365 E3
Why this is correct
Microsoft 365 E3 includes Entra ID P1, which supports password hash synchronization, and provides the needed Microsoft 365 services.
Related concept
Read the scenario before looking for a memorised answer.
✗
Microsoft Entra ID P2
Why it's wrong here
P2 includes P1 features plus Identity Protection and Privileged Identity Management, which are not required.
✗
Microsoft Entra ID Free
Why it's wrong here
Free does not support password hash synchronization; it only supports cloud-only identities.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often assume Microsoft Entra ID P1 is a separate add-on license, but Microsoft 365 E3 already includes it, making the bundled plan the minimal licensing requirement for hybrid identity with PHS.
Detailed technical explanation
How to think about this question
Password hash synchronization (PHS) works by using the Azure AD Connect tool to synchronize password hashes from on-premises Active Directory to Azure AD, enabling users to use the same password for cloud and on-premises resources. Under the hood, PHS uses a one-way hash of the password (specifically, the SHA256 hash of the MD4 hash) and does not require federation or additional infrastructure. In a real-world scenario, if a company only needs basic hybrid identity without advanced security features like conditional access or identity protection, Microsoft 365 E3 (with Entra ID P1) is the cost-effective choice, as it bundles the necessary identity capabilities with productivity services.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this MS-900 question in full detail.
Describe Microsoft 365 pricing, licensing, and support — This question tests Describe Microsoft 365 pricing, licensing, and support — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Microsoft 365 E3 — Microsoft 365 E3 includes Microsoft Entra ID P1, which provides the necessary features for hybrid identity with password hash synchronization (PHS). PHS is a core feature of Entra ID P1, enabling synchronization of password hashes from on-premises Active Directory to Azure AD for seamless authentication. Microsoft 365 E3 is the minimum licensing tier that bundles Entra ID P1, making it the correct choice for this scenario.
What should I do if I get this MS-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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