When talking about Microsoft Entra ID, there’s some basic terminology that is important to understand.

• Tenant – A Microsoft Entra tenant is an instance of Microsoft Entra ID in which information about a single organization resides including organizational objects such as users, groups, devices, and application registrations. A tenant also contains access and compliance policies for resources, such as applications registered in the directory. Each Microsoft Entra tenant has a unique ID (tenant ID) and a domain name (for example, contoso.onmicrosoft.com) and serves as a security and administrative boundary, allowing the organization to manage and control access to resources, applications, devices, and services.
• Directory – The terms Microsoft Entra directory and Microsoft Entra tenant are often used interchangeably. The directory is a logical container within a Microsoft Entra tenant that holds and organizes the various resources and objects related to identity and access management including users, groups, applications, devices, and other directory objects. Basically, the directory is like a database or catalog of identities and resources associated with an organization’s tenant. A Microsoft Entra tenant consists of only one directory.
• Multi-tenant – A multi-tenant organization is an organization that has more than one instance of Microsoft Entra ID. Reasons why an organization might have multiple tenants include organizations with multiple subsidiaries or business units that operate independently, organizations that merge or acquire companies, multiple geographical boundaries with various residency regulations, and more.