Application identity has quietly become one of the most exposed attack surfaces in modern Zero Trust architectures. While organizations have spent years hardening user access with MFA, Conditional Access, and device controls, application identities have expanded just as rapidly, often without the same scrutiny.
Every application registration, service principal, low-code workflow, and AI agent introduced into Microsoft Entra ID creates a new identity with permissions, credentials, and potential blast radius.
As Zero Trust evolves beyond human identities, application identity security can no longer be treated as a secondary concern or a one-time cleanup exercise. Without continuous governance, these non-human identities accumulate excessive permissions, stale credentials, and unmanaged ownership, creating ideal conditions for abuse. This shift demands a new approach, one that treats application identities as first-class citizens in Zero Trust and applies the same rigor, visibility, and accountability expected of user access.
Figure 1: Zero Trust for Identity (Microsoft)
This post builds on the webinar “Integrating Application Security into Your Zero Trust Framework–Practical Examples” and shifts the conversation from concept to execution. As organizations extend Zero Trust beyond human access, application and agent identities emerge as the next critical control plane, one that is expanding faster than most security teams can track.
In the sections that follow, we will examine:
Identity is the control plane for Zero Trust. Microsoft’s Zero Trust guidance explicitly calls out identity as the place where access is decided and enforced, with Entra ID at the center of strong authentication, Conditional Access, and least-privileged permissions. Traditionally, that thinking focused on people – employees, partners, and external users.
However, your tenant now contains:
Line-of-business apps using OAuth and OpenID Connect
Service principals for background jobs and automations
Low-code flows in Power Platform
AI agents and copilots built with Copilot Studio and other platforms
Every one of these is an “identity” that can authenticate, be granted permissions, and access sensitive data. The difference is that these identities often run unattended, may have broad permissions, and are rarely monitored as closely as humans.
This is the essence of “agentic sprawl”: as teams innovate with low-code tools and AI agents, each workflow, connector, and integration quietly creates new app registrations and service principals in your Entra ID tenant. Without a governance model, you quickly end up with hundreds or thousands of identities you didn’t design, don’t fully understand, and may not be monitoring.
At the same time, Zero Trust architecture tells us to assume breach and verify explicitly for every request. If attackers can compromise an app identity with powerful Graph permissions or access tokens, they can move laterally across data and systems without ever touching a privileged human account. That means application identity security is no longer a supporting concern; it is core to your Zero Trust strategy.
To bring application and agent identities into your Zero Trust world, it helps to apply the same three guiding principles used for human identities: verify explicitly, use least privilege, and assume breach. The difference is how they show up in day-to-day architecture and governance.
For human users, verifying explicitly usually means MFA, device compliance, and Conditional Access. For applications and agents, verification looks different but follows the same idea: every call must be strongly authenticated and evaluated in context.
Key practices include:
Use the right OAuth flow for each application type. For confidential clients (web apps, APIs, background services), use flows that keep secrets securely on the server and avoid public client flows where possible.
Prefer managed identities where available. Managed identities reduce the need to store secrets and help align app authentication with Entra ID’s token issuance and monitoring.
Leverage Conditional Access where supported. Microsoft is extending Conditional Access and risk-based policies so they can apply not just to users but also to certain agent and workload identities. As this matures, ensure critical APIs and actions can trigger stronger policy enforcement.
Application permissions can be far more dangerous than equivalent user permissions because apps often run continuously and at scale. A single over-privileged application identity can read or write data across the entire tenant.
This is where Zero Trust’s least-privilege principle becomes non-negotiable:
Choose the minimum permission scope required. For example, prefer a specific SharePoint site permission over tenant-wide read/write when building integrations.
Favor delegated permissions with Conditional Access over broad application permissions when the scenario allows.
Regularly review app permissions and remove unused or oversized grants. Use your governance processes to treat permission consent as a controlled activity, not a default behavior.
Zero Trust assumes an attacker is already in your environment. When you apply that assumption to application identities, the questions change:
Designing for assumed breach means:
Short-lived secrets and certificates with enforced rotation policies.
Minimizing standing access; use just-in-time patterns where relevant (for example, short-lived access tokens with Conditional Access and real-time evaluation).
Continuous monitoring of app sign-ins and suspicious behavior, not only user sign-ins.
Application governance should be a shared responsibility between Security, IT, and DevOps teams. Microsoft’s guidance on Entra ID and DevOps stresses end-to-end governance in CI/CD, including identity, configuration, and policy enforcement as part of the deployment lifecycle.
A mature model includes:
Required metadata at registration (owner, business criticality, data sensitivity)
Policy-driven rules for allowed permissions, token lifetimes, and registration patterns
Integration with pipelines so non-compliant configurations are blocked before reaching production
Without this, agentic sprawl is inevitable, especially as low-code tools democratize application creation across the business.
Power Platform and Copilot Studio bring tremendous productivity gains, but they also let non-developers create powerful integrations quickly. Microsoft’s own guidance on Copilot Studio and agent security highlights the need for robust governance controls around connectors, data access, and agent behavior.
Typical risk patterns include:
Citizen developers granting broad permissions to make something “just work”
Orphaned agents and flows that outlive their creators or original use cases
Shadow-IT style apps that connect to critical systems without central oversight
To manage this, organizations should:
Use environment and DLP policies in Power Platform to constrain where and how connectors can be used.
Standardize patterns for how agents authenticate to Entra ID and what scopes they can request.
Introduce approval workflows for new high-privilege connectors, agents, or app registrations.
So, what can a security or identity architect actually do next?
You cannot govern what you do not know. Start by building a complete inventory of:
Application registrations and service principals
Managed identities
Low-code flows and agents that authenticate via Entra ID
Use this inventory to label each identity along several dimensions:
Owner/business sponsor
Business criticality
Data sensitivity accessed
Permission scope (low/medium/high risk)
Entra ID Governance capabilities and related tools help you discover identities and apply policy-based oversight across user and app accounts.
Once you have visibility, you can define what “good” looks like. Align your guardrails with Microsoft’s Zero Trust identity integration guidance: strong authentication, least privilege, and continuous evaluation.
Examples of guardrails:
Only managed identities for certain workloads
Only specific permission scopes allowed for low-code environments
Conditional Access requirements for sensitive APIs or actions
Mandatory metadata and ownership fields at registration time
Support these guardrails with reference architectures and templates your DevOps and low-code teams can re-use, and integrate checks into CI/CD so dev teams see failures early.
Zero Trust is not a one-time project. Application identity security and governance must be continuous and automated wherever possible.
Key automation patterns include:
Scheduled reviews of app permissions, sign-in activity, and last-used date, with automated deactivation of unused identities after a defined period.
Alerts for new app registrations with high-risk permissions or anomalous behavior.
Automated tickets or workflows when ownership metadata is missing or when an owner leaves the organization.
Integration with Conditional Access, risky sign-ins, and security tools so that risky app or agent behavior triggers automatic policy responses.
ENow App Governance Accelerator - Enterprise includes automated workflows to scale application identity governance.
The payoff looks simple, but it’s a massively powerful mindset shift:
By extending Zero Trust principles to application and agent identities in Microsoft Entra ID, you can:
If you are responsible for the health and security of an Entra ID environment, here are a few practical next steps after watching the webinar and reading this article:
From there, you can iterate toward a fully integrated Zero Trust application identity security program, where new innovation in Power Platform, Copilot Studio, and DevOps pipelines is matched with equally innovative governance and automation.
Zero Trust is now about every identity – human, application, and agent. Bringing application security into your Zero Trust framework is not just a best practice; it is the only way to keep pace with the rapidly expanding identity surface in Microsoft Entra ID.
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