The difference between Active Directory (AD) and Azure Active Directory (Azure AD) explained

In this article, we explain Explain the difference between Active Directory (AD) and Azure Active Directory (Azure AD) and how these services can support your organization in managing users, groups and resources. We will discuss the core features and benefits of both services and give you insight into which solution is the best fit for your organization.

The difference between Active Directory (AD) and Azure Active Directory (Azure AD) explained

What is Active Directory (AD)?

Active Directory (AD) is a directory service developed by Microsoft for Windows domain networks. It provides a central location for managing and storing information about network objects, such as users, groups, computers and other resources. AD allows administrators to set access control and policies for their network, which helps maintain security and manage resources.



Core features of Active Directory

  • User and group management: AD allows administrators to create, modify and delete users and groups. This helps organize and manage access rights and permissions for various users and groups within the organization.
  • Organizational units (OUs).: OUs are containers within AD that help organize objects, such as users and groups, in a hierarchical manner. This makes management of policies and permissions easier and clearer.
  • Group Policy: Group policies allow administrators to centrally define and apply policies and settings to users, computers and other objects within the network. This ensures a consistent and secure environment.
  • Domain controllers: A domain controller is a server that hosts AD services and provides authentication and authorization of users within the network.

What is Azure Active Directory (Azure AD)?

Azure Active Directory (Azure AD) is a cloud-based directory and identity management service offered by Microsoft. It provides a scalable and secure solution for managing user identities, granting access to applications and protecting data in the cloud. Azure AD integrates with other Azure services, Microsoft 365 and a host of third-party SaaS applications, allowing organizations to expand and modernize their existing on-premises infrastructure.



Core features of Azure Active Directory

  • User and group management: As with AD, administrators can manage users and groups in Azure AD. In addition, Azure AD offers additional features such as self-service password recovery and multiple authentication (MFA) to improve security.
  • Application Management: Azure AD allows administrators to grant access to cloud and on-premises applications and monitor their usage. This helps manage access rights and ensure security.
  • Single Sign-On (SSO).: Azure AD provides SSO functionality, allowing users to log in only once to access multiple applications and services.
  • Conditional access: Conditional access allows administrators to set and enforce policies based on specific conditions, such as location, device status and user risk. This provides better security and control over resource access.

Comparison between Active Directory and Azure Active Directory

Although both AD and Azure AD are directory services, there are some key differences between the two. The following is a comparison of key aspects of AD and Azure AD:



  • Active Directory: AD is an on-premises solution implemented within an organization's own network. This requires the installation and maintenance of physical hardware and software.
  • Azure Active Directory: Azure AD is a cloud-based service that requires no local hardware and can be easily implemented and scaled based on the needs of the organization.


  • Active Directory: AD requires more hands-on management and maintenance, such as running backups, updating software and managing physical hardware.
  • Azure Active Directory: Azure AD is managed by Microsoft, allowing organizations to focus on managing their users and resources without having to worry about maintaining the underlying infrastructure.

Integration with other services


  • Active Directory: AD primarily integrates with other Microsoft products and on-premises systems. However, it can be extended with additional tools and services to enable integration with cloud-based solutions.
  • Azure Active Directory: Azure AD provides native integration with a wide range of cloud-based services, such as Microsoft 365, Azure, and thousands of third-party SaaS applications.


  • Active Directory: While AD provides robust security features, such as group policy and access control, additional measures are needed to ensure the security of on-premises systems.
  • Azure Active Directory: Azure AD provides advanced security features, such as MFA, conditional access and integration with Microsoft Defender for Identity. In addition, organizations benefit from the security and compliance provided by the Azure cloud infrastructure.

Conclusion: Active Directory or Azure Active Directory?

Choosing between Active Directory and Azure Active Directory depends on your organization's specific needs and requirements. Here are some considerations to help you make the right choice:


  • If your organization primarily on-premises infrastructure and systems and want complete control over your directory service, Active Directory may be an appropriate solution.
  • If your organization cloud-based services and applications or plans to do so, Azure Active Directory may be a better choice because of its easy integration and scalability.

It is also possible to take a hybrid approach, taking advantage of both Active Directory and Azure Active Directory. Azure AD Connect allows you to synchronize your on-premises AD with Azure AD, allowing you to combine the benefits of both directory services.


Most importantly, conduct a thorough assessment of your current and future needs and choose the directory service that best meets your organization's goals and requirements.

Frequently Asked Questions

Yes, you can create a hybrid environment by synchronizing your on-premises Active Directory with Azure Active Directory using Azure AD Connect. This allows you to take advantage of the benefits of both directory services and achieve seamless integration between on-premises and cloud resources.

Azure Active Directory is a cloud-based identity and access management service, while Active Directory Federation Services (AD FS) is an on-premises service that provides federated identity authentication. AD FS allows users to use Single Sign-On (SSO) to access multiple, related systems using their existing Active Directory login credentials.

Yes, Azure Active Directory is suitable for businesses of all sizes from small businesses to large enterprises. There are several licensing plans available, such as Azure AD Free, Azure AD Office 365 apps and Azure AD Premium P1 and P2, which can be customized to fit your company's needs and budget.
Yes, you can integrate your existing on-premises applications with Azure Active Directory through Azure AD Application Proxy. This allows your users to securely access your on-premises applications from any location and benefit from Single Sign-On (SSO) and conditional access.
Azure Active Directory provides several advanced security features not standard in Active Directory, such as multiple authentication (MFA), conditional access, identity protection and risk-based policies. In addition, Azure AD benefits from the built-in security and compliance of the Azure cloud infrastructure, helping to further secure your identity and access management and meet compliance requirements.

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