As you may already know – if not, this is it – Microsoft has introduced and provided Multi Form Factor (MFA) with Office 365, and Azure Active Directory, for some time now. This MFA solution is provided by PhoneFactor – which has been bought since then by Microsoft.
If you don’t know anything about this just take a look here http://blog.hametbenoit.info/2014/08/18/azure-use-windows-azure-multi-factor-authentication-to-secure-your-on-premises-application-and-with-your-adfs/ for On Premises deployment and http://blog.hametbenoit.info/2013/10/11/office-365-setup-multi-factor-authentication/ for the Office 365 version.
That said, and while I’m a big fan of this solution, there has been a big hole with it: this was working ONLY for web browser access, Office client (and PowerShell) do not support this additional authentication scheme. The workaround was to setup what it is called an App Password which automatically generated and in my opinion is not so secure as it contains only small cap characters.
After this introduction, here is the GOOD news…. Support for MFA will be available soon for Office client (nothing said about PowerShell support).
If you want to know more and take part of the preview read the announcement here http://blogs.office.com/2014/11/12/office-2013-updated-authentication-enabling-multi-factor-authentication-saml-identity-providers/ and join the preview here http://aka.ms/previewauth
Read carefully the announcement has there are some restrictions.
Hopefully I will be able to provide you my feedbacks with this preview soon.