For this reason, the errors can't be communicated to you immediately. When you're using group-based licensing, the same errors can occur, but they happen in the background while the Azure AD service is assigning licenses. The problem is immediately reported back to you. For example, there might be an insufficient number of licenses or a conflict between two service plans that can't be assigned at the same time. When you assign licenses directly to individual users, without using group-based licensing, the assignment operation might fail for reasons that are related to business logic. In this article, we explain the reasons why users might end up in this state. Group-based licensing in Azure Active Directory (Azure AD), part of Microsoft Entra, introduces the concept of users in a licensing error state.
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