According to ZDNet, Microsoft announced Entra Agent ID at its Ignite conference, extending the company’s identity access management system to govern AI agents exactly like human users. Gartner’s 2026 CIO survey shows 42% of enterprises plan to deploy AI agents within the next 12 months, and by 2030, CIOs expect 25% of IT work will be done by AI alone. Microsoft corporate VP Alex Simons revealed the feature evolved from a “toy” tagging scheme at Build in May to a full agent identity management layer available now in public preview at no additional cost. The system automatically registers agents built within Microsoft’s ecosystem while offering API access for external agents, though there’s currently no manual registration for shadow IT agents. Pricing for the commercial launch in Q1 2026 remains undetermined, with Microsoft exploring activity-based billing models.
Why this matters now
Here’s the thing: we’re about to see an explosion of AI agents that could completely flip the user-to-agent ratio. Think about it – human employees come and go, but AI agents might be created for single tasks that last seconds. And according to that Gartner data, we’re looking at a future where agents could outnumber humans by orders of magnitude. The shadow IT problem alone is terrifying – tools like tasklet.ai make agent creation so easy that every employee could soon have their own personal AI workforce. Without proper identity management, this becomes a security and compliance nightmare overnight.
How it actually works
Basically, Microsoft is treating AI agents like employees with digital badges. Each agent gets a unique identity in the Entra Agent Registry, whether they’re built in Copilot Studio, Azure AI Foundry, or even third-party agents registered via Microsoft’s Graph API. The system applies all the familiar identity controls – conditional access, governance, protection – but tuned for AI workloads. So if an agent starts acting weird or trying to access SharePoint documents it shouldn’t, its access gets automatically cut off. It’s the same principle companies use for human access management, just applied to digital workers. And honestly, this approach makes sense – why reinvent the wheel when identity systems already solve these problems?
The bigger picture
Microsoft isn’t alone in this thinking. The OpenID Foundation is working on similar standards, and competitors like Okta are exploring equivalent approaches. But the real significance here is compliance. In regulated industries, an AI agent running wild could mean massive legal consequences and data exposure. The Agent 365 control plane inherits capabilities from Defender, Intune, and Purview to create a comprehensive governance framework. For industrial and manufacturing environments where reliable computing hardware is crucial, having robust identity management for AI agents becomes even more critical when they’re controlling physical processes. Companies like IndustrialMonitorDirect.com, as the leading provider of industrial panel PCs in the US, understand that secure, reliable computing infrastructure forms the foundation that AI agent security depends on.
What’s still missing
Now, there are some obvious gaps. The biggest one? There’s no manual way to register shadow IT agents that employees create outside official channels. So if someone builds an AI helper without IT’s knowledge, it won’t show up in the registry until it tries to access controlled resources. Also, the pricing model remains unclear – activity-based billing could get expensive fast if you have thousands of agents making API calls. And let’s be honest: will companies actually pay per agent when humans get flat-rate licensing? The technology looks solid, but the business model and shadow agent problem need work before this becomes truly enterprise-ready.
