Azure AD, Azure AD Connect, and Azure AD DS: A Detailed Comparison and Hybrid Setup Guide
This post provides a comprehensive explanation of Azure Active Directory (Azure AD), Azure AD Connect, and Azure AD Domain Services (Azure AD DS), outlining their individual purposes, functionalities, and how they interact within a hybrid identity environment. It also includes a detailed comparison and practical examples to clarify their distinct roles.
1. Azure Active Directory (Azure AD) / Microsoft Entra ID
What it is: Azure Active Directory, now officially known as Microsoft Entra ID, is a cloud-based identity and access management (IAM) service. It's Microsoft's multi-tenant, cloud-based directory and identity management service that combines core directory services, application access management, and identity protection.
Primary Purpose: To provide identity services for cloud applications and resources. It enables users to sign in and access:
Microsoft cloud services (e.g., Microsoft 365, Azure portal, Intune).
Thousands of pre-integrated SaaS applications (e.g., Salesforce, Dropbox, ServiceNow).
Custom applications developed by your organization.
Key Features:
User and Group Management: Create, manage, and assign users and groups.
Application Management: Register and manage access to cloud applications.
Multi-Factor Authentication (MFA): Enhance security by requiring multiple verification methods for sign-in.
Conditional Access: Enforce policies based on user, device, location, and application to control access.
Self-Service Password Reset (SSPR): Allow users to reset their own passwords.
Identity Protection: Detect and remediate identity-based risks (Premium P2 feature).
B2B Collaboration: Securely share applications with external guest users.
Device Management: Register and manage devices (Azure AD Join, Hybrid Azure AD Join).
Example Use Case: A company wants to provide its employees with single sign-on (SSO) access to Microsoft 365, Salesforce, and a custom internal web application hosted in Azure. Azure AD serves as the central identity provider for all these cloud applications.
2. Azure AD Connect
What it is: Azure AD Connect is a Microsoft tool designed to synchronize identities between an on-premises Windows Server Active Directory (AD DS) and Azure Active Directory (Microsoft Entra ID). It's a key component for implementing hybrid identity.
Primary Purpose: To bridge the gap between on-premises and cloud identities, enabling a consistent identity experience for users across both environments. It ensures that user accounts, groups, and contacts created in your on-premises AD are replicated to Azure AD.
Key Features:
Password Hash Synchronization (PHS): Synchronizes a cryptographic hash of the user's password hash from on-premises AD to Azure AD. This is the simplest method for hybrid identity.
Pass-through Authentication (PTA): Authenticates users directly against their on-premises Active Directory when they try to sign in to Azure AD. No password hashes are stored in the cloud.
Federation Integration (with AD FS): Integrates with Active Directory Federation Services (AD FS) to enable federated authentication. Azure AD redirects authentication requests to AD FS on-premises.
Synchronization Services: Manages the flow of identity data between on-premises AD and Azure AD, including attribute filtering, object filtering, and password writeback.
Device Writeback: Registers Azure AD joined devices back to on-premises AD.
Password Writeback: Allows users to change or reset their password in Azure AD (e.g., via SSPR) and have that new password written back to their on-premises AD account.
Health Monitoring: Provides monitoring capabilities for the synchronization process.
Example Use Case: A large enterprise has an existing on-premises Active Directory with thousands of users and wants to migrate to Microsoft 365. They use Azure AD Connect to synchronize their user accounts and password hashes to Azure AD, allowing employees to use their existing on-premises credentials to log in to Microsoft 365 and other Azure AD-integrated cloud applications.
3. Azure AD Domain Services (Azure AD DS)
What it is: Azure AD Domain Services (Azure AD DS) provides managed domain services (like domain join, group policy, LDAP, Kerberos/NTLM authentication) compatible with Windows Server Active Directory. It's not an extension of your on-premises AD, nor is it a cloud-based domain controller for your Azure AD tenant. Instead, it's a separate, managed domain service that synchronizes with your Azure AD tenant.
Primary Purpose: To enable "lift-and-shift" of legacy applications to Azure that require traditional domain services (e.g., LDAP, Kerberos, NTLM, domain join) but cannot directly use Azure AD's modern authentication protocols. It eliminates the need for you to deploy, manage, and patch domain controllers in Azure.
Key Features:
Domain Join: Join Azure Virtual Machines to a domain.
Group Policy: Apply group policies to VMs joined to the managed domain.
LDAP (Lightweight Directory Access Protocol): Support for LDAP-based applications.
Kerberos and NTLM Authentication: Support for legacy applications that rely on these protocols.
DNS Services: Provides DNS resolution for the managed domain.
One-way Synchronization: Synchronizes users, groups, and credentials from Azure AD (or from on-premises AD via Azure AD Connect) to the managed domain.
Example Use Case: A company has a legacy line-of-business application that runs on Windows Server VMs and requires traditional Active Directory domain join and LDAP authentication. Instead of deploying and managing their own domain controllers in Azure, they deploy Azure AD DS. The application VMs are then joined to this managed domain, and users can authenticate using their synchronized Azure AD credentials.
4. Hybrid Identity Setup
A hybrid identity setup combines on-premises Active Directory with Azure Active Directory. This is the most common scenario for organizations that have existing on-premises infrastructure and are adopting cloud services.
How it works:
On-premises Active Directory (AD DS): Your existing directory service where user accounts, groups, and other identity objects are managed.
Azure AD Connect: Installed on an on-premises server, it establishes a connection to both your on-premises AD DS and your Azure AD tenant. It performs the synchronization of identity objects.
Azure Active Directory (Microsoft Entra ID): The cloud directory where synchronized identities reside. Users can then use these identities to access cloud applications.
Common Hybrid Scenarios:
Synchronization with Password Hash Synchronization (PHS):
Flow: On-premises AD DS -> Azure AD Connect (syncs password hashes) -> Azure AD.
Authentication: Users authenticate directly against Azure AD using their synchronized credentials.
Benefit: Simplest to deploy, high availability for cloud authentication (even if on-premises AD is down).
Synchronization with Pass-through Authentication (PTA):
Flow: On-premises AD DS -> Azure AD Connect (syncs user accounts, PTA agents installed) -> Azure AD.
Authentication: Azure AD receives the authentication request and passes it through to the PTA agents on-premises, which validate against on-premises AD DS.
Benefit: No password hashes in the cloud, authentication happens against on-premises AD.
Federation with AD FS:
Flow: On-premises AD DS -> Azure AD Connect (configures federation with AD FS) -> Azure AD.
Authentication: Azure AD redirects authentication requests to on-premises AD FS, which authenticates the user.
Benefit: Provides more control over the authentication process, supports advanced authentication policies (e.g., smart card authentication).
Hybrid Azure AD Join:
Flow: On-premises domain-joined devices are registered with Azure AD via Azure AD Connect.
Benefit: Devices benefit from both on-premises group policies and cloud-based management (e.g., Conditional Access, Intune).
Example Hybrid Setup: An organization has an on-premises Active Directory and uses Microsoft 365. They deploy Azure AD Connect with Password Hash Synchronization.
Users: Created in on-premises AD, synchronized to Azure AD.
Authentication: Users log in to Microsoft 365 using their on-premises credentials, which are validated by Azure AD against the synchronized password hash.
Device Management: Windows 10/11 devices are Hybrid Azure AD Joined, allowing them to receive group policies from on-premises AD and be managed by Intune (connected to Azure AD).
5. Key Differences and Comparison Table
Feature | Azure Active Directory (Azure AD) / Microsoft Entra ID | Azure AD Connect | Azure AD Domain Services (Azure AD DS) |
|---|---|---|---|
Type | Cloud-based Identity and Access Management (IAM) service | On-premises software agent for synchronization | Managed cloud service providing traditional AD capabilities |
Purpose | Identity for cloud apps, SSO, MFA, Conditional Access, B2B, B2C | Synchronize identities between on-premises AD and Azure AD | Provide AD DS-compatible services (LDAP, Kerberos, NTLM, GPO) in Azure |
Deployment | SaaS (Software as a Service) - No deployment needed, just configuration | Installed on a Windows Server (on-premises or IaaS VM) | PaaS (Platform as a Service) - Deployed as an Azure resource |
Core Function | Cloud identity provider | Identity synchronization engine | Managed domain controller for Azure workloads |
Authentication | Modern protocols (OAuth 2.0, OpenID Connect, SAML) | Facilitates authentication based on chosen method (PHS, PTA, Federation) | Traditional protocols (Kerberos, NTLM, LDAP) |
Domain Join | Azure AD Join (for cloud-native devices), Hybrid Azure AD Join (with AAD Connect) | Enables Hybrid Azure AD Join | Allows Azure VMs to domain join to the managed domain |
Network | Internet-facing service | Requires network connectivity to on-premises AD and Azure AD | Deployed into an Azure VNet, providing private network access |
Managed By | Microsoft (as a service) | Customer (installed and configured by customer) | Microsoft (as a service), but customer configures and manages policies |
Relationship to On-Prem AD | Can be standalone or synchronized with on-premises AD | Connects to on-premises AD to synchronize to Azure AD | Synchronizes from Azure AD; acts as a separate, compatible domain |
Cost | Free, P1, P2 editions (based on features) | Free (software), but requires underlying server infrastructure | Consumption-based (based on usage and tier) |
Example | User logs into Microsoft 365 | User account created on-premises appears in Azure AD | Legacy app on Azure VM uses LDAP to authenticate against a domain controller |
Conclusion
Understanding the distinct roles of Azure Active Directory, Azure AD Connect, and Azure AD Domain Services is fundamental for designing and managing identity solutions in Microsoft's cloud.
Azure AD (Microsoft Entra ID) is your primary cloud identity provider for modern applications.
Azure AD Connect is the bridge for synchronizing identities from your on-premises Active Directory to Azure AD, enabling hybrid identity.
Azure AD Domain Services (Azure AD DS) provides traditional domain controller functionalities in Azure for legacy applications that cannot use Azure AD's modern authentication.
Together, these services allow organizations to build flexible, secure, and scalable identity infrastructures that span both on-premises and cloud environments.
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