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Active Directory vs. Azure Active Directory?

azure security

A Tale of Two Directories

When it comes to identity and access management solutions, two names that often come up are Active Directory (AD) and Azure Active Directory (AAD). While many people are familiar with AD, AAD is still a relatively new concept to some. In this article, we will take a deep dive into both directories and explore their similarities, differences, pros, cons, and everything in between.

What is Active Directory?

Active Directory is Microsoft’s on-premises directory service that authenticates and authorizes all users and computers within an organization. It provides single sign-on (SSO) access to network resources such as files, folders, printers, applications, etc. AD stores user account information like usernames and passwords in a centralized database that can be managed by IT administrators. Since its release in 1999 as a part of Windows 2000 Server edition, AD has been one of the most widely used directory services for organizations big and small alike.

What is Azure Active Directory?

Azure Active Directory is Microsoft’s cloud-based directory service that offers identity and access management for cloud-native applications. It provides authentication services for web applications as well as SSO integration with other Microsoft cloud services like Office 365 or Dynamics 365. Launched in 2010 alongside Windows Azure platform at PDC10 event in Redmond WA USA Azure AD was first designed to be used with Microsoft’s Cloud solutions but over time it has expanded its usage beyond the Microsoft ecosystem allowing organizations to manage SaaS application authentication across multiple platforms from AWS to Salesforce.

Why Compare Active Directory with Azure Active Directory?

Both directories serve the same purpose- providing identity and access management solutions- but they operate differently based on where they are deployed. Many organizations rely solely on AD since it has been around much longer and is the more established directory service.

However, as cloud adoption continues to rise, companies that are migrating to the cloud or already use cloud applications need a directory that can provide authentication and authorization for their web-based apps. Comparing AD and AAD side-by-side will help you make an informed decision about which directory service to use, depending on your organization’s requirements.

While both solutions have their strengths and weaknesses, choosing one over the other will depend on several factors such as size of the organization, budget constraints, security requirements, IT team’s expertise level etc. In the next section of this article, we will discuss the high-level differences between AD and AAD.

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Active Directory vs. Azure Active Directory 

High-Level Overview

The Key Differences Between the Two

Active Directory (AD) and Azure Active Directory (Azure AD) are both directory services from Microsoft, but they differ significantly in terms of their architecture, features, and capabilities. One of the main differences between the two is that AD is an on-premises solution while Azure AD is a cloud-based solution. This means that with AD, all of your data and resources are stored on servers within your organization’s network.

With Azure AD, however, all resources are managed in the cloud and can be accessed from anywhere with an internet connection. Another key difference between the two is that AD is primarily designed to manage devices and users within an organization’s network environment while Azure AD extends that management to cloud-based applications.

The Advantages and Disadvantages of Each

AD has several advantages over Azure AD. First, it offers greater control over user authentication and security. Since all data resides on-premise behind a firewall, IT teams can better manage access to sensitive information by defining granular access policies for each user or group. Secondly, since AD was designed for on-premises use cases only, it remains a more mature product with more robust features such as Group Policy Objects (GPOs).

GPOs enable administrators to define how system settings should be managed across an organization’s entire network. However, one major disadvantage of using only AD is that as more organizations adopt cloud-first strategies for their businesses or transition to remote work environments; managing identities becomes cumbersome.

Azure Active Directory also has its advantages over traditional Active Directory. For one thing, it provides cloud identity management which makes it easier for employees to work remotely without compromising security protocols.

This feature grants access from any location via an internet connection securely. Another advantage is SSO (Single Sign-On) capabilities that come with Azure AD. SSO allows users to log in once, and then access all authorized applications without the need to repeatedly enter usernames and passwords.

However, one disadvantage of using Azure AD is that it may not be a good fit for organizations with many legacy applications that do not support modern authentication protocols. Active Directory (AD) is better suited for on-premises environments while Azure AD is better suited for cloud-based environments.

The decision between the two mainly depends on an organization’s specific needs. Nonetheless, hybrid identity management using both solutions can provide a balance between control and flexibility.


Managing Users and Devices

How user and device management differs between the two

Active Directory and Azure Active Directory differ in their approach to user and device management. Active Directory is primarily an on-premises solution, while Azure AD is a cloud-based solution.

This means that managing users and devices in Active Directory typically involves using a combination of Group Policy Objects (GPOs) and a local Active Directory domain controller, while in Azure AD, user and device management is done entirely through the cloud-based Azure portal. One of the biggest differences between the two solutions is the way that users and devices are added to each directory.

In Active Directory, users are typically added manually through the Active Directory Users and Computers (ADUC) tool or imported from a CSV file. Devices can be joined to an on-premises domain using either manual or automated methods.

In contrast, adding users in Azure AD can be done through multiple methods including PowerShell scripting or Azure AD Connect sync with on-premises AD environments. Similarly, devices can be registered with Azure AD using various methods including Intune device management.

Benefits of managing users and devices in Azure AD

Managing users and devices through Azure AD brings several distinct benefits over traditional on-premises solutions like Active Directory. One of these benefits is flexibility – since everything is managed through the cloud portal, administrators can manage their environment from anywhere with internet access without needing VPN connections or RD sessions into servers. Another benefit of using Azure AD for user/device management comes from its integration with other Microsoft services such as Office 365 or Dynamics 365.

When integrated with these services, administrators gain access to additional features such as conditional access policies (CAPs) that allow them to control who has access to which resources based on factors such as location or device type. Managing users/devices through Azure AD offers better security than traditional on-premises solutions.

With Azure AD, administrators can leverage features like multi-factor authentication (MFA), conditional access policies, and identity protection to secure their environment against cyber threats. Plus, with cloud-based management, updates and patches are automatically pushed out ensuring the latest security protocols are in place.

While Active Directory is still a widely used solution for user and device management in large enterprises, Azure AD offers several benefits that make it an attractive option for organizations looking to move their infrastructure to the cloud. By providing flexible access anywhere with an internet connection, integration with other Microsoft services such as Office 365 or Dynamics 365, and better security protocols like MFA and conditional access policies – it’s clear why Azure AD is becoming an increasingly popular choice for modern businesses.


Authentication and Security Features

Comparison of authentication methods used by both ADs

Authentication is the process of verifying the identity of a user or device attempting to access a system. Active Directory uses Kerberos as its primary authentication protocol.

Kerberos is a ticket-granting system that allows users to authenticate once and then access resources without having to re-enter login credentials for each new request. Azure Active Directory, on the other hand, supports multiple authentication protocols such as OAuth 2.0, OpenID Connect, and SAML 2.0.

It also provides multi-factor authentication (MFA) options like SMS verification, phone call verification, and mobile app-based verification. This means that Azure AD has more flexible authentication options than Active Directory.

Security features unique to Azure AD

Azure AD offers several security features unique to its platform. One of these features is Conditional Access which allows administrators to control who can access an organization’s resources based on certain conditions like device type or location.

Another feature offered by Azure AD is Identity Protection which detects potential security threats like risky sign-ins or compromised credentials and takes appropriate action to prevent unauthorized access. Azure AD also provides Privileged Identity Management (PIM) which allows administrators to manage and monitor privileged identities within their organization.

PIM enables just-in-time administration of privileged roles, reducing the risk of accidental misuse or intentional abuse. Additionally, Azure AD supports integration with third-party security solutions through Microsoft’s Intelligent Security Graph which helps organizations detect and respond to potential security threats in real-time.

While both Active Directory and Azure Active Directory have strong authentication mechanisms at their core, Azure AD offers more flexibility and granular control over user access through its support for multiple protocols including MFA options. Moreover, its advanced suite of security features like Conditional Access, Identity Protection and PIM provide greater protection against modern-day security threats.

Integration with Other Microsoft Services

One Integration to Rule Them All

Active Directory and Azure Active Directory both offer seamless integration with other Microsoft services. For organizations using Office 365 or Dynamics 365, this integration can be particularly useful.

Users can use their existing credentials to log in to these services without having to remember multiple usernames or passwords. In addition, administrators can easily manage access and permissions for these services through either AD platform.

The Benefits of Azure AD Integration

One benefit of using Azure AD for Microsoft service integration is the ability to extend identity management beyond the organization’s borders. This means that third-party partners or vendors can also access certain applications or data using their own existing credentials.

This feature can be especially beneficial for companies that work with contractors or freelancers who need temporary access. In addition, Azure AD also offers more robust security features than traditional Active Directory.

For example, conditional access policies allow administrators to set specific conditions that must be met before a user is granted access to certain resources. This extra layer of security helps prevent unauthorized access from potential threats.

The Benefits of Active Directory Integration

Traditional Active Directory also offers benefits when it comes to Microsoft service integration. One such benefit is the ability to manage Group Policy Objects (GPOs) across all domain-joined computers in an organization. GPOs allow administrators to enforce specific security settings on all devices within the network, helping ensure compliance and protect against potential threats.

Another benefit is compatibility with older applications that may not yet have full Azure AD integration capabilities. While most modern applications are compatible with both AD platforms, there may still be legacy applications within an organization that require traditional Active Directory for proper authentication and authorization.

Which One Is Best?

Ultimately, whether an organization chooses Active Directory or Azure Active Directory for Microsoft service integration depends largely on their specific needs and use cases. While Azure AD offers more robust security features and the ability to extend identity management outside of the organization, traditional Active Directory offers compatibility with older applications and better GPO management. If an organization primarily uses newer Microsoft services and applications, Azure AD may be the better choice.

However, if there are still legacy systems or older applications in use, traditional Active Directory may still be necessary. Ultimately, it’s important for organizations to carefully consider their specific needs before making a decision on which AD platform to use for Microsoft service integration.

Cost Considerations

When it comes to choosing between Active Directory (AD) and Azure Active Directory (AAD), one of the most important factors to consider is cost. Both ADs have different pricing models, so it’s essential to understand what you’re paying for and how much it will cost. In this section, we’ll cover the pricing models for both ADs and the factors that may influence your costs.

Comparison of Pricing Models for Both ADs

Active Directory is available as part of Windows Server. Therefore, if you have Windows Server deployed on-premises, you already have access to Active Directory at no additional cost. However, there are still costs associated with deploying and managing Active Directory on-premises, such as hardware costs and maintenance costs.

In contrast, Azure Active Directory is a cloud-based service that requires a subscription. You can choose from several subscription plans based on your organization’s needs.

For example, if you only need basic user management features like single sign-on (SSO) and multi-factor authentication (MFA), the “Azure AD Free” plan may be suitable for your organization and comes at no cost. If you require more advanced features such as identity governance or privileged access management, then you’ll need to subscribe to one of the paid plans like “Azure AD Premium P1” or “Azure AD Premium P2.” The pricing for these plans ranges from around $6 per user per month to $15 per user per month.

Factors That May Influence Cost Considerations

The specific needs of your organization will determine which plan best suits it and how much it will cost. Some factors that may influence your costs include:

      • The number of users in your organization: The more users you have, the higher the cost will be.

      • The level of security you require: More advanced security features like conditional access and identity protection come at a higher cost.

      • Whether your organization operates solely on-premises or in the cloud: If you have on-premises applications, you may require a hybrid AD solution which comes at an additional cost.

      • Whether you need integration with other Microsoft services like Office 365, Dynamics 365, etc.: Some plans include access to these services while others do not.

    Keep in mind that the pricing models for both Active Directory and Azure Active Directory are subject to change. Before making a final decision, it’s essential to check for any updates related to pricing and subscription plans.

    Additionally, consider other factors such as ease of use and management when selecting between ADs Choosing between Active Directory and Azure Active Directory is not just about comparing their features but also considering their costs.

    While AD is available at no additional cost if you have Windows Server installed on-premises, there are still associated costs. Azure AD requires a subscription plan that depends on your organization’s specific needs.

    Factors such as the number of users in your organization or the level of security required can influence your costs. Ultimately, it’s best to compare both pricing models thoroughly before making a decision.


    Hybrid Identity Management

    The Small Detail that Can Make a Big Difference

    The Hybrid Identity Management Solution in Active Directory and Azure Active Directory

    Hybrid identity management is a lesser-known, but increasingly important feature of both Active Directory and Azure Active Directory. It refers to the synchronization of on-premises identity infrastructure with cloud-based identity providers. This allows users to access resources on-premises as well as in the cloud, using their usual credentials.

    In the case of Active Directory, hybrid identity management is provided by Azure AD Connect. This tool synchronizes user information from an on-premise AD instance to an Azure AD instance in the Cloud.

    On the other hand, Azure AD provides a comprehensive hybrid identity management solution that includes seamless synchronization with several third-party authentication providers such as Okta, Ping Federate, and more. Additionally, it includes features that enable federation between on-premises identities and cloud services like Office 365.

    The Benefits of Hybrid Identity Management

    Hybrid identity management offers several benefits for organizations looking to move towards cloud-based environments while still maintaining their existing on-premise infrastructure: 

    – Single Sign-On across all networks: Users can sign in once and access all network resources without having to enter their credentials again.

    – Security: Passwords are synchronized across both environments so users only need one set of credentials. 

    – Scalability: The ability to scale users up or down based on changing organizational needs.

    How To Deploy Hybrid Identity Management Solutions

    If you want to deploy hybrid identity solutions for your organization, first determine which solution best fits your business needs then follow these steps: 1. Plan your environment

    2. Install Azure AD connect (in the case of Active Directory) or Azure AD (for cloud-based identity management) 

    3. Connect to your on-premises Active Directory environment

    4. Configure synchronization between on-premises Active Directory and Azure AD 5. Test synchronization and resolve any issues



    The Differences in Group Policy Objects between Active Directory and Azure Active Directory

    What Group Policy Objects (GPOs) Do?

    Group Policy Objects or GPOs are configuration settings that apply to user accounts and groups or computers within an organization’s network. They are meant to enforce security, set up networking parameters, configure software settings, etc.

    In the case of Active Directory, GPOs are used to configure settings for domain-joined machines such as password policies, remote access permissions, firewall settings, and more. However, in the case of Azure AD: while there are no GPOs per se, there are similar features called Conditional Access policies that can be configured in a similar way.

    The Differences Between AD and AAD Regarding GPOs

    There are several differences between how GPOs work in AD versus AAD: – While GPO editing is done through the GUI on domain controllers for AD; this functionality does not exist for AAD because it is a cloud-based solution.

    – In contrast to AD where all users can use the same set of policies; in AAD different user groups can be assigned specific policies based on their needs. – Whereas an average IT person with appropriate permissions can create or edit GPO objects in AD; creating Conditional Access Policies requires global administrator rights.

    The Benefits of Conditional Access Policies over Traditional GPO Management

    Conditional Access Policies in Azure AD offer several advantages over traditional GPO management: – Location-based access: Controls and restricts access to network resources based on the location of the user requesting access.

    – Device compliance: Ensures that devices accessing network resources are compliant with organizational policies by checking if encryption, password requirements, etc., are met. – Granular control: Allows administrators to configure policies based on device type, user group, application being accessed, etc.

    Both AD and AAD offer solutions for configuring settings across an organization’s network. However, there are some key differences between the two systems in terms of how they manage Group Policy Objects.

    While AD provides a more traditional approach through GPOs that can be edited through the GUI on domain controllers; Azure AD provides a cloud-based solution that leverages Conditional Access Policies to provide granular control over network access. Ultimately, each solution has its own strengths and weaknesses depending on the business needs of an organization.



    Summary of key points discussed throughout the comparison

    Active Directory (AD) and Azure Active Directory (AAD) are both powerful tools for managing users, devices, and security in an organization. AD is an on-premise solution that provides a wide range of capabilities for managing resources within the local network.

    AAD is a cloud-based solution that offers similar capabilities to AD but with the added benefit of being accessible from anywhere with an internet connection. When it comes to managing users and devices, AAD offers several benefits over AD. For example, AAD allows administrators to manage devices remotely, provides single sign-on functionality for web-based applications, and supports multi-factor authentication out of the box.

    However, AD still provides more granularity when it comes to Group Policy Objects (GPOs) compared to AAD. Both AD and AAD offer robust authentication and security features.

    However, AAD has a unique advantage in that it can integrate with other Microsoft services such as Office 365 and Dynamics 365. This allows organizations using these services to take advantage of seamless access control across their entire Microsoft ecosystem.

    Final thoughts on which AD may be best suited for certain organizations or scenarios

    Ultimately, the decision between using AD or AAD will depend on several factors such as organizational size, budget constraints, need for mobility/accessibility from anywhere in the world and level of complexity required for device management. Organizations that require extensive control over their resources may find that AD is better suited for them due to its granular GPO functionality.

    Moreover small scale organizations who do not have many resources can opt for Azure Active Directory due to its cost-effective nature coupled with ease-of-use without having an on-premise infrastructure. On the other hand larger organizations with distributed workforce might find Azure Active Directory more ideal due its cloud-first design choices which ensures that users can access resources from anywhere in the world so long as they have an internet connection.

    Overall, both AD and AAD are powerful tools for managing resources in an organization. The choice largely depends on specific organizational needs, size, complexity of resource management required, and budget constraints.

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