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Using group-based licensing in Azure DevOps significantly reduces administrative overhead. This approach allows organizations to manage licenses at the group level rather than individually, streamlining the process of granting and revoking access to Azure DevOps services. By leveraging group memberships, administrators can assign licenses to a group, automatically providing all group members with the appropriate access rights. This efficiency is especially beneficial in larger organizations, as it minimizes the time and effort spent on managing the licenses of individual users and ensures consistent access across users who share similar roles or responsibilities.

The other options do not align with the primary benefit of group-based licensing. Individual license management typically entails more complexity and can increase administrative workload, contradicting the intent of group management. Group-based licensing does not impose a requirement to use cloud resources, as users can interact with on-premises applications and other environments as needed. Lastly, group-based licensing does not inherently limit access to external connections; rather, it focuses on access management within Azure DevOps based on user roles and group memberships.