Azure Active Directory Vs. Active Directory: Key Differences Explained

Azure Active Directory (Azure AD, now part of Microsoft Entra ID) and traditional Active Directory Domain Services (AD DS) share a name but serve different purposes and use different underlying protocols.

Traditional Active Directory (AD DS)

• An on-premises directory service used to manage Windows-based networks
• Uses protocols like LDAP and Kerberos
• Organizes objects using Organizational Units (OUs) and Group Policy
• Best suited for managing domain-joined machines within a local network

Azure Active Directory

• A cloud-based identity and access management service
• Uses modern web protocols like OAuth 2.0, OpenID Connect, and SAML
• Manages access to cloud apps, SaaS services, and Microsoft 365
• Has a flat structure rather than OUs, focused on users, groups, and app registrations

Key Differences

• Deployment — AD DS is on-premises; Azure AD is fully cloud-hosted
• Protocols — AD DS relies on LDAP/Kerberos; Azure AD relies on REST/HTTPS-based protocols
• Management model — AD DS uses Group Policy; Azure AD uses Conditional Access and Intune
• Hybrid connection — Azure AD Connect can sync identities from an on-prem AD DS to Azure AD