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Azure AD vs Microsoft Entra

In a Microsoft study, it was discovered that a significant majority of organizations, comprising 46%, rely on Active Directory Federation Services, a Windows Server role that facilitates single sign-on access, as their primary method for connecting with Azure AD. Following closely behind is Microsoft’s Password Hash Sync service, which is utilized by 25% of these organizations.  

Today, Identity and Access Management (IAM) are crucial for securing access to various resources and applications. Two popular IAM solutions offered by Microsoft are Azure AD and Microsoft Entra.  

While both aim to provide comprehensive identity management capabilities, they offer distinct features that make it essential for businesses to understand their differences. Azure AD is becoming Microsoft Entra Id, representing a significant evolution in identity and access management services. 

Azure AD, short for Azure Active Directory, is a cloud-based identity and access management solution. On the other hand, Microsoft Entra is a hybrid IAM solution that caters to organizations with complex identity management requirements. This article explores the features, benefits, target audiences, and advanced capabilities of both solutions to help businesses make informed decisions. 

Overview of Azure AD 

Azure AD serves as a cloud-based identity management service that enables organizations to easily manage user identities and control access to resources. It offers several key features and benefits:  

  1. Single sign-on (SSO) functionality: With Azure AD, users can access multiple applications using a single set of credentials, enhancing productivity while reducing login fatigue. 
  2. Multi-factor authentication (MFA): Azure AD provides multi-factor authentication (MFA), enhancing security by mandating users to provide additional verification factors, such as SMS codes or biometric data, to access their accounts. 
  3. Seamless integration with Microsoft 365: Azure AD seamlessly integrates with Microsoft 365 and other Microsoft services, providing a unified experience for users across various applications.

Azure AD offers different subscription plans with varying features and capabilities. 

Understanding Microsoft Entra 

Microsoft Entra is designed to provide advanced identity protection and comprehensive IAM capabilities in both cloud and on-premises environments. It offers unique features that differentiate it from Azure AD: 

  1. Advanced identity protection: Microsoft Entra utilizes risk-based conditional access policies to assess the trustworthiness of user access attempts and apply appropriate security measures accordingly. This helps organizations prevent unauthorized access to sensitive resources.
  2. Privileged identity management (PIM): Microsoft Entra includes PIM, which allows organizations to manage elevated access rights for privileged accounts, reducing the risk of data breaches and insider threats. 
  3. Integration with on-premises Active Directory environments: Microsoft Entra offers seamless integration with on-premises Active Directory environments, enabling organizations to extend their existing IAM infrastructure to the cloud.

Differences between Azure AD and Microsoft Entra 

When comparing Azure AD and Microsoft Entra, several key differences arise: 

Architecture and deployment options 

Azure AD is a cloud-native solution, while Microsoft Entra provides hybrid capabilities by integrating with on-premises Active Directory environments. The advantages and considerations for each deployment option are as follows: 

Pros of cloud-native IAM: 

  • Scalability: Cloud-native solutions can easily scale as business needs grow. 
  • Reduced maintenance: Organizations do not need to manage on-premises infrastructure. 
  • Quick implementation: Cloud-based solutions often have shorter implementation times. 

Cons of cloud-native IAM: 

  • Limited control over data: Organizations may have concerns about storing sensitive data in the cloud. 
  • Dependency on Internet connectivity: Connectivity issues can impact access to applications and resources. 

Pros of hybrid IAM: 

  • Flexibility: Organizations can leverage existing investments in on-premises IAM infrastructure. 
  • Enhanced control: Organizations have greater control over their data and security measures. 
  • Compliance requirements: Certain regulations may require data to be stored within a specific location or jurisdiction. 

Cons of hybrid IAM: 

  • Complexity: Integrating different environments can be challenging and may require additional setup. 
  • Increased maintenance overheads: Managing both on-premises and cloud components can require additional resources. 

Target audience and use cases 

Azure AD is suitable for small to medium-sized businesses that require a cloud-based IAM solution. It provides essential identity management features, including SSO and MFA, at an affordable price point. Microsoft Entra, on the other hand, caters to larger enterprises with complex IAM requirements. Its advanced features such as risk-based conditional access policies and PIM make it ideal for organizations that need enhanced security measures and control over privileged accounts. 

Advanced features and security capabilities 

Microsoft Entra offers advanced security features such as risk-based conditional access policies and PIM, providing organizations with granular control over access to resources. While Azure AD offers some security measures, these advanced capabilities are only available in Microsoft Entra.  

However, it’s important to note that Azure AD still provides robust security measures, including SSO and MFA, making it suitable for organizations that prioritize ease of use and basic identity management functionalities. 

Integration with other services  

Azure AD seamlessly integrates with Microsoft 365 and other Microsoft services, providing a unified experience for users across various applications. Additionally, Azure AD supports integrations with third-party applications through industry-standard protocols such as SAML and OAuth.  

Microsoft Entra goes beyond Azure AD by offering integration options with on-premises Active Directory environments. This allows organizations to leverage their existing IAM infrastructure while extending their capabilities to the cloud. 


In conclusion, Azure AD and Microsoft Entra are both powerful IAM solutions offered by Microsoft; however, they cater to different needs within the enterprise landscape. Azure AD is becoming a Microsoft Entra ID solution designed for small to medium-sized businesses that require cloud-based identity management with essential features such as SSO and MFA. Azure AD is becoming Microsoft Entra Id as part of the latter’s rebranding efforts. However, despite their similarities, they offer distinct features and capabilities that cater to different organizational needs.  

To learn more about how Embee can help you implement the right IAM solution for your organization, visit our Azure AD and Microsoft Entra service pages. 


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