Question

How can I enable multi-factor authentication (MFA) while allowing service principal authentication for Power BI APIs?
I want to enforce multi-factor authentication (MFA) for users accessing Power BI while still allowing automated access for applications using a service principal. The goal is to balance security with automation needs. What is the recommended approach for configuring MFA and service principal authentication without disrupting API-based integrations?

Answer 1

To enable Multi-Factor Authentication (MFA) for users while allowing service principal authentication for Power BI APIs, follow these best practices to balance security with automation:

1. Enforce MFA for User Authentication

• Use Azure AD Conditional Access Policies to require MFA for all users accessing Power BI.

  • Go to: Azure AD > Security > Conditional Access

  • Create a policy that requires MFA for Power BI sign-ins.

  • Exclude service accounts used for automation to avoid disrupting API-based workflows.

2. Use Service Principal for API-Based Authentication

• Service principals are designed for non-interactive authentication and do not require MFA.

• Steps to configure:

  1. Register an app in Azure AD:

     • Go to Azure AD > App Registrations > New Registration.

     • Assign Power BI API permissions (App.Read.All, Dataset.ReadWrite.All, etc.).

  2. Enable Service Principal Access in Power BI Admin Portal:

     • Go to Power BI Admin Portal > Tenant Settings.

     • Enable "Allow service principals to use Power BI APIs" under Developer settings.

  3. Assign Service Principal to a Workspace:

     • In Power BI Service, go to the workspace > Access > Add the service principal with the required role (Admin, Member, Contributor).

3. Apply Conditional Access Exceptions for Service Principals

• Since service principals authenticate via client ID and secret/certificate, MFA does not apply to them.

• In Azure AD Conditional Access, exclude service principals from policies requiring MFA while enforcing MFA for all human users.

4. Use Managed Identities (Optional, for Azure Services)

• If running Power BI automation within Azure (e.g., using Azure Functions, Logic Apps, or Power Automate), consider Managed Identities instead of service principals.

• This eliminates the need for client secrets, improving security.