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What is Azure Active Directory? Azure AD vs Windows AD

Philip Robinson | 6 min read| Updated On - April 22, 2024

What is Azure AD

The COVID-19 pandemic has significantly accelerated the adoption of Microsoft’s cloud-based services. Microsoft Teams, for example, witnessed a 70% surge in daily users within a month. Similarly, Microsoft Azure AD (Azure Active Directory), a vital component of the Office 365 ecosystem, has experienced increased adoption. Azure AD simplifies user login management by assigning a single username and password for access to all Azure services. This is particularly advantageous for large organizations with thousands of employees, as it eliminates the hassle of managing multiple user logins. Azure AD also serves as the backbone of Microsoft’s cloud-based identity and access management solution and can sync with on-premise Active Directory environments. Additionally, it provides secure authentication to other cloud-based systems via OAuth.

What is Azure Active Directory?

Azure Active Directory (AAD) is a cloud-based directory service that provides centralized identity management for organizations operating in a multi-tenant environment. With AAD, users can seamlessly access various services using a single sign-on process. Additionally, AAD facilitates the onboarding and ongoing management of employees, enabling them to securely access services from any location. AAD’s key features include the ability to record user information and define access rights to both internal and external resources. It also offers enhanced security measures, as vulnerabilities in Active Directory environments can be exploited in cyber-attacks.

AAD is distinct from Active Directory, which runs on-premise servers called Domain Controllers (DC), which contains a catalog of authorized users and computers and authenticates them using Kerberos or NTLM. While AAD and Active Directory can work together in a hybrid environment, AAD is a separate solution that is part of the Microsoft Azure public cloud platform.

Difference Between Windows and Azure AD

When choosing between Windows Active Directory (AD) and Azure AD, the decision depends on the organization’s existing infrastructure and future plans. For well-established enterprise networks, Windows AD remains the go-to choice for managing on-premises infrastructure. On the other hand, organizations looking to embrace a cloud-only approach will find Azure AD more suitable for their complete cloud-based infrastructure. In terms of management and security, both Windows AD and Azure AD offer comparable levels of configurability and security. However, for organizations with more than 100 users, either platform requires specialized expertise for effective management. Azure AD, however, offers simplified management for smaller organizations due to its cloud-based nature. Organizations with limited resources may find Azure AD a more accessible and manageable option.

Below are some of the most notable differences between Windows AD and Azure AD:

Features Windows Active Directory Azure AD
Communication Uses Lightweight Directory Access Protocol (LDAP) for client-server communication Leverages REST APIs for communication with web applications
Authentication Verifies user credentials via Kerberos and NTLM protocols Uses OAuth2, SAML, and WS-Security for secure user authentication
Hierarchy Organized in a hierarchical structure comprising Forests, Domains, and Organizational Units Hierarchical organization of users and groups within “tenants”
Access Management Grants permissions to users and assigns them to groups that control access to network resources Groups are used to grant permissions to applications and resources
Device Management Limited to Windows desktops and servers, excluding mobile devicess Integrates with Microsoft Intune for management of mobile devices
Desktop Management Enforces policies and settings on Windows desktops through Group Policies (GPOs) Allows Windows desktops to join Azure AD through Microsoft Intune
Server Management Controls and manages servers using Group Policies or on-premises server administration systems Enables management of servers within the Azure cloud via Azure AD Domain Services

How Does Azure Active Directory Work?

Azure Active Directory employs REST APIs for seamless data transfer. Azure AD’s flat structure within a single tenant provides convenience but limits control over data beyond the tenant’s boundaries.

The basic building blocks in Azure AD are users and groups, enabling organized permissions management. Both internal and external users can be added, enhancing security. Various methods exist for user and group addition, including synchronization from Windows AD, manual creation, PowerShell scripting, and the Azure AD Graph API.

It’s crucial to set proper authentication and password policies, minimize unnecessary user additions, restrict privileged access, leverage groups for resource allocation, and connect users to their devices for effective user management. Additionally, Azure AD allows for the configuration of custom domains, reducing user frustration and improving brand recognition.

How Do On-Prem AD and Azure AD work together?

Hybrid AD environments combine on-premises Active Directory (AD) with Azure AD. Microsoft’s Azure AD Connect synchronizes identity data from on-prem AD to Azure AD, enabling users to authenticate to cloud resources like SharePoint Online and Teams with their on-premises credentials.

IT professionals primarily manage users, groups, and permissions through the on-prem AD, which automatically syncs to the cloud. This eliminates the need for separate identity and permission management, minimizing potential errors.

In addition to syncing with on-prem AD, hybrid AD environments also manage cloud-only objects and attributes. These include B2B and B2C user accounts for external users and cloud-only attributes such as the ‘License type’ attribute for Office 365 applications. Keeping these cloud-only elements in sync requires additional management, security, migration, and reporting solutions beyond on-prem tools.

Failure to maintain this synchronization can impact user access to Office 365 applications, as the ‘License type’ attribute may be lost upon user object deletion.

Benefits and Limitations of Azure Active Directory

AAD offers numerous benefits, including seamless integration with multiple identity providers, compatibility with various applications, and robust security measures such as multi-factor authentication, conditional access, and Privileged Identity Management (PAM). It provides high availability through its distributed architecture, ensuring consistent performance.

Additionally, AAD facilitates collaboration with business partners and external customers. However, AAD has certain limitations. It offers a limited selection of MFA methods and lacks support for group policies.

It also does not support NTLM or Kerberos authentication protocols and has limited OAuth support. Furthermore, AAD does not allow for custom app creation and has restrictions on device, location, and time-based access policies.

Despite these limitations, Azure Active Directory remains a powerful tool for identity and access management, offering numerous advantages that enhance security and usability.

Azure Active Directory Authentication Components

Azure Active Directory plays a pivotal role in authentication with its two primary components:

  • Service Provider: Azure Active Directory facilitates communication between the user and the identity provider. It assumes the responsibility of managing the authentication process and returning an authentication token to the user.
  • Identity Provider: Azure Active Directory authenticates the user’s credentials, verifying their identity. Once authenticated, Azure Active Directory provides an authentication token to the Service Provider, enabling the user to access the desired resource or application.
Philip Robinson
Philip Robinson

Phil joined Lepide in 2016 after spending most of his career in B2B marketing roles for global organizations. Over the years, Phil has strived to create a brand that is consistent, fun and in keeping with what it’s like to do business with Lepide. Phil leads a large team of marketing professionals that share a common goal; to make Lepide a dominant force in the industry.

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