Active Directory vs Microsoft Entra ID: What's Actually Different
An IT administrator's guide to the differences between on-premises Active Directory and Microsoft Entra ID — and what the cloud-only future actually looks like.
Two different products, similar names
Microsoft Active Directory Domain Services and Microsoft Entra ID share a name and share a vendor, but they are very different products with very different architectures. AD DS is a directory service designed for on-premises networks, built around domains, organizational units, Group Policy, and Kerberos. Entra ID is a cloud identity service designed for internet-facing applications, built around tenants, OIDC, OAuth, and SAML.
Authentication protocols
AD DS uses Kerberos and NTLM. Entra ID uses OIDC, OAuth 2.0, SAML, and WS-Federation. Hybrid environments bridge the two through Entra Connect, which synchronizes identities from on-premises AD to Entra ID and optionally enables password hash sync or pass-through authentication.
Group Policy versus Intune
Group Policy is the configuration management tool for AD-joined Windows endpoints. Intune is the modern equivalent for Entra-joined or hybrid-joined endpoints across Windows, macOS, iOS, and Android. The two are functionally overlapping but architecturally different — Group Policy applies at logon over SMB; Intune applies via MDM channels over HTTPS.
When you still need on-premises AD
You still need AD if you have applications that require Kerberos or LDAP authentication, file shares that depend on AD groups, or line-of-business systems certified only against AD. The list shrinks every year but is rarely zero.
Migrating to cloud-only
A realistic cloud-only journey takes several years for most enterprises. Stage it: rebuild new workloads as Entra-joined and Intune-managed from day one; migrate identity-aware applications to OIDC or SAML; consolidate file shares to SharePoint and OneDrive; decommission AD-dependent systems as procurement cycles allow.
Hybrid is not a destination
Hybrid AD/Entra environments work well as a transition state but introduce ongoing complexity and a meaningful security attack surface (the synchronization service itself, the on-premises Domain Controllers, and the trust between them). Plan to leave hybrid, even if the timeline is long.
Reader questions, answered
Can I run Entra ID without on-premises AD?+
Yes, cloud-only tenants are common for greenfield organizations and SMBs.
Raza Ahmad is a technology author and IT infrastructure specialist based in Melbourne, Australia. He writes practitioner-grade guides on cloud computing (Azure and AWS), cybersecurity, enterprise networking with Cisco platforms, Linux administration, DevOps, and virtualization. His work focuses on translating complex infrastructure topics into clear, accurate guidance that engineers, system administrators, and IT decision makers can put to work in production environments. Every article published under his byline is fact-checked against current vendor documentation, official standards, and Raza's own hands-on experience operating the technologies he covers.
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