Device code flow blocked by the new Security Defaults

[LukasK]

Hello everyone,

We are currently experiencing an issue where, when onboarding Microsoft 365 tenants provisioned by Microsoft after July 1, 2026, we are unable to set up the Veeam Backup for Microsoft 365 backup directly.
When enabled, Security Defaults block the device code flow. See this https://learn.microsoft.com/en-us/entra ... y-defaults Microsoft Article.

From a product management perspective, how do you view this change? It will negatively impact the customer journey during onboarding, since the policy must be temporarily disabled if Conditional Access cannot be used.
As a service provider, we have numerous partners and end customers who do not have access to Conditional Access and who primarily use Business Basic and Business Standard licenses.

We could publish a knowledge base article on this to reduce support requests, but it’s likely that a large number of new customers will encounter this issue.

Is there an alternative to the Device Code Flow in the medium to long term?

BR
Lukas