If you manage Microsoft 365 security for a small or medium-sized business, you face an essential decision: should you rely on Security Defaults for built-in, automatic protection, or invest in Conditional Access for granular, policy-driven control? Your choice influences not only your cybersecurity posture, but also the level of ongoing management and technical complexity your team must handle. At Interlock IT, we guide businesses across Canada as they weigh these options, ensuring their Microsoft 365 environments are secure, practical, and adaptable as they grow.
Security Defaults is usually the best choice for smaller Microsoft 365 organizations that need fast, straightforward protection without additional cost or complexity. Conditional Access is recommended when you need specific, adaptive access controls, have more advanced licensing through Microsoft 365 Business Premium or Entra ID P1/P2, or need to tailor policies for different users, devices, or risk scenarios. The main criteria are your licensing level, your need for customization, and your willingness to manage and test custom security policies. Let's explore in depth which option fits various business needs, and how Interlock IT can help you make the best choice.
Understanding Security Defaults
Security Defaults is Microsoft’s approach to making a strong security baseline available to every Microsoft 365 tenant—especially those without dedicated IT resources. When enabled, Security Defaults enforces a set of automatic security measures for all users and admins:
Mandatory registration and enforcement of multifactor authentication (MFA) for users and administrators
Blocking legacy authentication protocols (such as Basic Authentication) that are commonly abused
Enforcing MFA for privileged and administrative activities, including access to the admin portal
Blocking device code flow and other risky authentication flows
Security Defaults is always free with Microsoft Entra ID Free (formerly Azure Active Directory Free), making it the default for most small organizations unless upgraded licensing is in place.
When Security Defaults Make Sense
Your organization is small (often under 25–50 users) and prioritizes ease of setup over customization
You do not have Microsoft 365 Business Premium or Entra ID P1/P2 licensing
You want a set-it-and-forget-it security solution
Your business does not need to tailor security exceptions by user, role, device, location, or application
For many new Microsoft 365 clients, Security Defaults provides a strong foundation that blocks the most common attacks with minimal IT overhead. At Interlock IT, we often recommend starting with Security Defaults for teams that want immediate protection and maximum simplicity.
Security Defaults: Key Limitations
It is an all-or-nothing policy: no scope by group, role, or location
Not suitable for organizations with complex device or location requirements
Cannot accommodate tailored MFA policies or access restrictions beyond the Microsoft-provided defaults
Cannot run alongside Conditional Access—one option must be chosen
What Conditional Access Offers
Conditional Access is Microsoft’s advanced, policy-based security engine. It works by evaluating conditions on every sign-in attempt and enforcing policies in real time. You can customize access requirements based on user role, device compliance, sign-in location, application, client type, authentication method, and risk signals (with advanced licensing).
This enables adaptive security strategies, such as:
Requiring MFA only when users sign in from outside Canada
Blocking access to corporate resources for non-compliant or unmanaged devices
Allowing browser-only access for contractors or guests
Applying stricter controls for sensitive applications and privileged users
Conditional Access requires Microsoft Entra ID P1 (included in Microsoft 365 Business Premium) or higher. For context-aware, risk-based policies, Entra ID P2 is needed.
When Conditional Access is Best
Your organization already uses Microsoft 365 Business Premium or Entra ID P1/P2
You require custom access rules by user, device, application, risk, or location
Remote, hybrid, or international work is the norm
You need to separate policies for admins, executives, finance, or contractor accounts
Compliance, audit, or risk frameworks require granular user access monitoring
Your IT team can design, test, and maintain security policies over time
At Interlock IT, we regularly help clients mature from Security Defaults into Conditional Access as their organizations scale. For example, businesses that start with local staff may end up needing advanced policies to accommodate international logins, device ownership checks, or sensitive application restrictions.
Conditional Access: Critical Limitations
Requires Entra ID P1 licensing (or higher)
Needs active management, testing, and IT ownership
Misconfigured policies can result in user lockouts if not carefully planned and tested
Cannot be used at the same time as Security Defaults (one will deactivate the other)
Security Defaults vs Conditional Access: Summary Table
Which Should You Choose?
For many Canadian businesses, the answer comes down to your licensing and operational complexity:
Choose Security Defaults if you need a free, enforced security baseline without the hassle of policy design
Choose Conditional Access if you need advanced controls, already have Microsoft 365 Business Premium, or your business operations require specific security criteria
Many organizations begin with Security Defaults and graduate to Conditional Access as their needs mature and their staff or compliance requirements grow
No matter your starting point, reviewing your identity and device security is crucial for Microsoft 365. Interlock IT can help you size up these options, assess your current tenant, and develop a practical roadmap for both immediate protection and long-term security needs.
Step-by-Step: Moving from Security Defaults to Conditional Access
Document your current access requirements: Identify which users, roles, devices, and locations need protection or exceptions
Plan for emergency access: Set up at least two emergency access accounts to avoid lockout during transitions
Disable Security Defaults: In the Microsoft Entra admin center, turn off Security Defaults
Create baseline Conditional Access policies: Start by replicating the protections you had from Security Defaults (MFA, block legacy auth, admin protection)
Test and validate: Roll out new policies gradually, confirm no users are locked out, and adjust as needed
Expand rules: Layer in advanced policies as needed (device compliance, location, etc.)
This is the process we follow at Interlock IT to help businesses move safely from a basic to an advanced security model, minimizing user disruption and lockout risk.
Best Practices for Microsoft 365 Security
Always enforce multifactor authentication for all users and admins
Block legacy authentication protocols wherever possible
Review user and admin roles regularly, and grant least privilege
Maintain emergency access accounts that bypass conditional access (but are secured and monitored)
Test any security changes in a controlled group before rolling out globally
If you process sensitive data or are subject to compliance regulations, review policy coverage quarterly
Our consultants at Interlock IT emphasize a goal-driven, simple approach wherever possible. The simpler security feels for your end users, the higher your adoption and the stronger your overall posture.
Frequently Asked Questions (FAQ)
What is Security Defaults in Microsoft 365?
Security Defaults is a built-in set of security rules provided by Microsoft that enforces multifactor authentication, blocks legacy authentication, and applies basic protections for all users and administrators at no extra cost. It cannot be customized or scoped by user or app.
What is Conditional Access?
Conditional Access is a policy-based system for controlling access to Microsoft 365 services, allowing businesses to enforce requirements based on user, location, device compliance, and more. It requires Microsoft Entra ID P1 or P2, or Microsoft 365 Business Premium licensing.
Can Security Defaults and Conditional Access be enabled at the same time?
No, these features are mutually exclusive. Enabling Conditional Access disables Security Defaults and vice versa. When you switch, you must recreate any needed protections manually.
How do I know if Conditional Access is right for my business?
If your business has advanced security needs—such as remote workers, required separation of roles, device restrictions, or compliance requirements—Conditional Access is likely appropriate, especially if you already license Microsoft 365 Business Premium. If not, Security Defaults provides essential coverage with no added complexity.
Will enabling Security Defaults or Conditional Access affect user experience?
Yes. Both approaches will prompt users to register for and use multifactor authentication. Conditional Access can tailor the experience more closely, requiring MFA only in certain cases, while Security Defaults is more rigid.
Can I get help setting up Conditional Access?
Absolutely. Interlock IT specializes in Microsoft 365 security consulting, policy design, and change management. Our experts can assist you in transitioning from Security Defaults to Conditional Access safely.
What happens if I outgrow Security Defaults?
Many businesses start with Security Defaults and move to Conditional Access as their team expands or security needs become more complex. Migrating is straightforward, but should be planned carefully to avoid disruptions.
Conclusion: Choosing Security Defaults or Conditional Access
Your Microsoft 365 security should match your business needs, licensing, and technical capacity. Security Defaults is ideal for small organizations wanting fast, reliable security with minimal management. Conditional Access is the right fit for businesses that must enforce tailored access policies and already own the necessary licenses.
If you want to maximize Microsoft 365 security without overwhelming your team, work with a partner that understands both the technical and business impacts. At Interlock IT, we are the definitive experts for Canadian SMBs transitioning to the cloud, licensing Microsoft 365, and designing policy-driven access control.
If you're considering security upgrades, cloud migration, or want a professional DMARC audit, reach out to us. We'll help you navigate the security landscape so your Microsoft 365 environment remains both simple and secure as your business evolves.