The key difference between Active Directory vs Azure Active Directory is that traditional Active Directory manages users and computers through a Windows Server domain, while Azure Active Directory—now Microsoft Entra ID—manages cloud identities and access. Many cloud-first Dubai businesses can retire their on-site server after moving identity and device management to the cloud. Businesses with legacy applications or domain-dependent resources may need a hybrid setup.
What Is the Difference Between Active Directory and Azure Active Directory?
Windows Server Active Directory (AD DS) is a directory service commonly hosted on an on-site domain controller. It manages user accounts, computers, authentication, and Group Policy Objects (GPOs) within an organisation’s network.
Microsoft Entra ID (formerly Azure Active Directory) is Microsoft’s cloud-based identity and access management service. It helps employees sign in to Microsoft 365 and other cloud applications using single sign-on (SSO), multi-factor authentication (MFA), and Conditional Access. Microsoft changed the name Azure Active Directory to Microsoft Entra ID; traditional Windows Server Active Directory was not renamed. Read Microsoft’s explanation of the name change.
Active Directory vs Azure Active Directory: Key Differences
Feature | Windows Server Active Directory | Microsoft Entra ID |
Where it runs | On-site Windows Server or supported hosted infrastructure | Microsoft’s cloud |
Main purpose | Domain authentication and internal resource management | Cloud identity and access management |
Sign-in | Domain credentials and protocols such as Kerberos | Cloud authentication and modern access controls |
Device management | Group Policy and domain management | Microsoft Intune and cloud-based policies |
Remote access | May require a VPN or network connection for internal resources | Supports controlled access to cloud applications from different locations |
Best suited for | Businesses with legacy applications and domain-dependent infrastructure | Cloud-first businesses and distributed teams |
These services can work together during a transition. Microsoft Entra Connect (formerly Azure AD Connect) synchronises identities between on-site Active Directory and Microsoft Entra ID, allowing businesses to move gradually instead of making a disruptive overnight change.
Dubai businesses can explore Skytech Cyber Cloud’s Active Directory Services to assess their existing server environment or Microsoft Entra ID services to plan a cloud identity strategy.
Signs Your Business Is Ready to Retire Its On-Site Server
Moving away from an on-site domain controller may be practical if your business already relies on cloud applications and has fewer dependencies on its internal network.
Use this checklist to assess your readiness:
Your server is ageing:
Your Windows Server version is approaching end of support, or hardware replacement and maintenance are becoming expensive.
Your employees work remotely:
Staff need secure access from home, client locations, and other offices.
Your email is already in Microsoft 365:
Employees use cloud email and productivity applications instead of services hosted on the local server.
Your files can move to cloud storage:
Shared documents can be transferred to SharePoint Online or OneDrive without disrupting essential workflows.
Your applications support cloud authentication:
Critical systems no longer require traditional domain sign-in or on-site service accounts.
Your devices can be managed remotely:
Company laptops can be configured and secured without relying on the office network.
If most of these points apply, a cloud-first setup could reduce server maintenance and simplify remote working. However, confirm application dependencies, printing requirements, shared-drive access, and authentication methods before retiring the server.
When Should You Keep a Hybrid Setup?
Not every business should retire its domain controller immediately. A hybrid environment keeps on-site Active Directory while connecting it to Microsoft Entra ID, allowing employees to use cloud services while certain systems continue operating as before.
Consider retaining a hybrid setup if your business has:
- Legacy applications that require domain authentication or Kerberos.
- Frequently used shared drives that cannot yet be migrated without changing business processes.
- Printers and scanners that depend on local network settings or domain-based access.
- Service accounts used by applications, scheduled tasks, or background processes.
- Specific compliance requirements that need a separate technical and legal assessment.
For example, a Dubai company might move email and collaboration to Microsoft 365 but continue running an older accounting application on a local server. In this case, Microsoft Entra Connect can synchronise identities while the remaining application dependency is assessed.
Another option is to host certain legacy applications on Microsoft Azure in a UAE region, where suitable. Hosting an application in Azure does not automatically remove its dependency on Active Directory, so authentication, networking, and security requirements must still be reviewed.
Explore Azure AD Connect services or Microsoft Azure services to understand the available options.
Step-by-Step Plan to Move to Entra ID and Intune
A successful migration requires preparation, testing, and a phased rollout. Follow these steps before retiring your domain controller.
Inventory your IT environment. Document users, groups, computers, Group Policy Objects (GPOs), applications, shared folders, printers, and service accounts. Identify every system that depends on the domain.
Review your licences. Check which identity and device management features your organisation needs. Microsoft 365 Business Premium includes Microsoft Intune and Microsoft Entra ID P1, subject to current plan terms. Compare your options using this Microsoft 365 plan guide.
Plan identity synchronisation. If you need to retain on-site Active Directory temporarily, configure Microsoft Entra Connect. Password hash synchronisation can allow users to retain familiar passwords. Test authentication and account recovery before changing sign-in arrangements.
Strengthen identity security. Enable multi-factor authentication (MFA), configure Conditional Access where supported by your licences, and apply least privilege. Test administrator accounts and emergency access procedures.
Plan your Microsoft 365 Migration. Move appropriate shared files to SharePoint Online and OneDrive. Review file permissions, folder structures, storage requirements, and applications that depend on existing file paths. See Skytech Cyber Cloud's Microsoft 365 Migration service and Microsoft 365 Migration Checklist.
Review existing Group Policies. Export and analyse your GPOs using Intune's Group Policy analytics. Identify supported settings, conflicting rules, and settings that require manual configuration.
Enrol and configure devices. Use Microsoft Entra join for suitable cloud-managed Windows devices. Windows Autopilot can simplify setup for new or reset laptops, while Intune applies device configurations, compliance policies, and security settings.
Test applications and printing. Confirm that staff can access essential applications, print documents, use shared resources, and work remotely. Universal Print may suit supported printing environments, but some legacy devices may need additional configuration.
Pilot, validate, and retire the server. Run both environments during the transition. Test with a small group first, document issues, and confirm that applications, devices, and service accounts no longer depend on the domain controller. Retire it only when dependencies are resolved and recovery arrangements are documented.
How Does Microsoft Intune Replace Group Policy?
Microsoft Intune manages supported devices through cloud-based policies rather than relying exclusively on a local domain connection. It can configure security settings, deploy applications, enforce compliance policies, and manage company-owned devices and supported BYOD (bring your own device) environments.
Microsoft’s Group Policy migration guide explains how administrators can import GPOs into Group Policy analytics and review which settings can be migrated. Supported settings can then be configured using the Intune Settings Catalog.
However, migration is not always one-to-one:
- Some Group Policy settings have no direct Intune equivalent.
- Conflicting policies must be reviewed before deployment.
- Firewall and AppLocker rules need to be handled through the appropriate Endpoint Security options.
- Device compatibility and policy behaviour must be tested before broad rollout.
The objective is not to copy every old policy. Review what is still necessary, test the replacement settings, and remove outdated rules. Learn more about Skytech Cyber Cloud’s Microsoft Intune services and read Microsoft Intune Explained.
What Affects the Cost and Timeline?
The cost and duration depend on the complexity of your existing environment rather than the number of employees alone.
Smaller offices:
Businesses with a few applications, straightforward policies, and limited shared storage may need less migration work.
Larger organisations:
A 200-person company with multiple locations, extensive GPOs, legacy applications, and complex permissions will generally need more testing and coordination.
Additional requirements:
Licence upgrades, data migration, application remediation, device replacement, and specialist support can increase the overall effort.
A readiness review helps establish a realistic scope, budget, and timeline before implementation begins.
Common Migration Mistakes to Avoid
Avoid these mistakes when moving from on-site Active Directory to cloud-based identity and device management:
Switching off the server too early:
Check application, device, and service account dependencies first.
Skipping MFA:
Secure user and administrator accounts before expanding cloud access.
Copying every old GPO:
Review and migrate only the settings your business still needs.
Forgetting service accounts:
Background applications and scheduled tasks may stop working if their authentication dependencies are overlooked.
Leaving users as local administrators:
Apply least privilege and restrict elevated access.
Ignoring recovery plans:
Document rollback procedures and test account recovery before the final cutover.
A phased migration reduces the risk of downtime, access problems, and security gaps.
Where Is Your Microsoft 365 Data Stored?
Microsoft operates cloud datacentre regions in the UAE, including Dubai and Abu Dhabi. However, your organisation’s actual data location depends on its tenant geography and the services it uses. If your business has data residency requirements, review your tenant’s data location and Microsoft’s applicable commitments before migration. Refer to Microsoft’s official datacentre location guidance.
FAQ
No. Active Directory traditionally runs on Windows Server and manages domain-based authentication and internal resources. Azure Active Directory, now Microsoft Entra ID, is a cloud identity service. They can work together through synchronisation, but Entra ID is not a direct replacement for every traditional Active Directory feature.
Yes. Azure Active Directory was renamed Microsoft Entra ID. The name changed, but the service continues to provide identity management, single sign-on, and access controls for cloud applications. The rename did not apply to Windows Server Active Directory, which remains a separate product.
Not exactly. Office 365 originally focused on productivity applications and cloud services, while Microsoft 365 offers different bundles that may include additional security and device management capabilities. People searching for microsoft office 365 or ms office 365 should compare current subscription features rather than relying on the older name.
No. Intune is available through eligible standalone subscriptions and bundles. However, Microsoft 365 Business Premium includes Intune and Microsoft Entra ID P1, making it a useful option for businesses that need device management and additional identity controls. Check Microsoft’s current licensing terms before purchasing.
Yes. You can use Intune for device management while retaining Active Directory for applications and resources that still depend on it. Devices may be Microsoft Entra hybrid joined during the transition. This lets your business modernise gradually while testing dependencies and planning the server’s eventual retirement.
Conclusion
Moving to Microsoft Entra ID and Intune can simplify device management and support secure remote working, provided your applications and infrastructure are ready. The right approach may be cloud-only, hybrid, or a gradual transition based on your business requirements.
Book an identity and device readiness review with Skytech Cyber Cloud to identify dependencies, assess licensing, and plan your migration.
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