What is Microsoft Defender for Cloud Apps? Inventorying Generative AI and SaaS with Cloud Discovery

About this article
This article was created using an automated generation workflow powered by generative AI. Based on official Microsoft information as of September 18, 2026, it outlines the role of Microsoft Defender for Cloud Apps (MDCA), E3/E5 licensing boundaries, Cloud Discovery, Conditional Access App Control, and the 2026 transition to Agent 365 from a practical perspective.

Verification Status: 📘 Official Microsoft Information Confirmed / Not Verified on Actual Devices

Microsoft Defender for Cloud Apps is a SaaS security product that visualizes SaaS usage and investigates and controls risky apps, OAuth apps, app-to-app communication, and suspicious activities in the cloud.CASB (Cloud Access Security Broker) is a concept for visualizing and controlling cloud usage, whileSSPM (SaaS Security Posture Management) is a concept for continuously checking for weaknesses in SaaS configurations.

What are the differences between E3 and E5?

According to official Microsoft service descriptions, MDCA is available as a standalone product and is also included in Microsoft 365 E5, EMS E5, Microsoft Defender Suite, Microsoft Purview Suite, and others. Although E3 includes Entra ID P1,having E3 means the full features of MDCA are includedis not necessarily the case.

Start with Cloud Discovery first

Cloud Discovery is the entry point for visualizing cloud apps used within your organization's network. You can check not only app names but also users, traffic, risk assessments, and Sanctioned/Unsanctioned status.

flowchart LR
  U[利用者のSaaSアクセス] --> L[ネットワーク/端末ログ]
  L --> CD[Cloud Discovery]
  CD --> R[リスク評価・利用量]
  R --> A[情シス/セキュリティが確認]
  A -->|必要な場合のみ| G[Sanction / Unsanction / 制御]

Safe first steps

In the Microsoft Defender portal, open Cloud Apps> > Cloud Discovery and perform read-only actions without changing any settings.

• Top discovered apps

• Risk score

• Number of users and traffic

• Categories such as Generative AI / Cloud storage

• Sanctioned / Unsanctioned status

The condition for success is being able to explain the gap between expected SaaS usage and actual usage. Do not change settings to Unsanctioned from the very beginning.

Change one thing

Filter down to Generative AI only. Without changing any settings, you can compare which generative AI services are being used and to what extent.

Practical example of generative AI inventory

Even if the general affairs department intends to use only company-designated AI, there are cases where users access external AI via browsers. Rather than deciding on bans first, Cloud Discovery serves as a resource to check in the order of:Actual usage -> Business purpose -> Input data -> Alternatives.

sequenceDiagram
  participant U as 利用者
  participant AI as 外部AI/SaaS
  participant D as Cloud Discovery
  participant S as セキュリティ担当
  U->>AI: Webアクセス
  D-->>S: 利用量・リスク情報を集約
  S->>S: 業務目的とデータ種別を確認
  S-->>U: 許可・代替・ルールを案内

Conditional Access App Control

MDCA integrates with Microsoft Entra Conditional Access to perform session control for target SaaS. This feature requires Entra ID P1 or higher in addition to MDCA. Instead of applying strong controls like download restrictions to all employees at once, verify the impact with test users and limited apps.

Important change in 2026: Part of AI agent protection moves to Agent 365

Starting July 1, 2026, Microsoft has transitioned features previously provided in MDCA, such asMicrosoft Copilot Studio agent discovery/posture, threat detection, and agent activity investigation in Advanced Hunting,to the Microsoft Agent 365 license. The understanding from older materials that 'purchasing MDCA allows you to use Copilot Studio agent security as is' needs to be updated.

This does not mean that standard SaaS Cloud Discovery itself has been discontinued.The licensing boundary between SaaS protection and dedicated AI agent security has changed, which makes it easier to understand.

Three perspectives

• General users: Identify SaaS approved by the company and services where sensitive information can be entered.

• Administrative staff: Classify input data, such as customer and contract information, before using convenient web services.

• IT/Security: Monitor actual usage, and control it only after verifying risks, business necessity, and alternatives.

Points for administrators to check

• MDCA licenses for target users to be protected

• Entra ID P1 required for Conditional Access App Control

• Cloud Discovery data sources and collection scope

• User information and privacy included in logs

• Impact when changing Sanctioned / Unsanctioned status

• Integration with Defender XDR

• The boundary after July 2026, when Agent 365 became required for Copilot Studio agents, etc.

Official Microsoft Information and Primary Sources

• Microsoft Defender for Cloud Apps documentation

• Get started with Defender for Cloud Apps

• Cloud Discovery

• Microsoft Defender service description

• Agent security capabilities transition to Microsoft Agent 365

Defender for Cloud Apps is not a product designed to 'ban the cloud.' A safe way to start is to first make the actual usage visible with Cloud Discovery, and then gradually apply controls only where necessary.