Active Directory vs Entra ID: What's the difference?

Active Directory Domain Services manages traditional Windows domains, while Microsoft Entra ID is a cloud identity and access service for modern applications and Microsoft 365.

Quick answerEntra ID is not simply Active Directory hosted in the cloud. Many organizations operate a hybrid identity architecture during migration.

Option A

Active Directory

Active Directory relies on domain controllers and protocols such as LDAP

Option B

Entra ID

Entra ID manages cloud identities and modern authentication with capabilities such as MFA, Conditional Access and integration with Microsoft 365.

Key differences between Active Directory and Entra ID

Decision factor	Active Directory	Entra ID
Core model	On-premises domain directory built around domain controllers, LDAP, Kerberos and computer domains.	Cloud identity and access service built around modern authentication, SaaS and cloud applications.
Device management	Commonly uses domain join and Group Policy.	Works with Entra join/register plus Intune or other MDM for modern management.
Availability boundary	Depends on reachable domain-controller services for many traditional workflows.	Delivered as a Microsoft cloud service with Internet-based identity endpoints.

Choose Active Directory if

Choose Active Directory when applications, file services or policies depend on a traditional Windows domain and local infrastructure.

Choose Entra ID if

Choose Entra ID for cloud-first identity, SaaS access and modern device management patterns, often together with Intune.

Practical example

A company still runs file servers and an application that requires Kerberos and domain-joined PCs, so Active Directory remains necessary. Microsoft 365, Conditional Access and cloud-managed laptops use Entra ID. Synchronization or federation connects the identities while the organization modernizes applications over time.

Can you use Active Directory and Entra ID together?

Hybrid identity is common. Microsoft Entra Connect or cloud sync can synchronize selected identity information from Active Directory to Entra ID. Design authentication, privileged accounts, device join and source-of-authority carefully rather than treating the two directories as interchangeable.

Common mistake to avoid

Calling Entra ID “Active Directory in the cloud” leads to bad migration assumptions. It does not provide traditional domain-controller services such as LDAP domain join or classic GPO processing. Review each application and management dependency before removing AD DS.

Key takeaway

Entra ID is not simply Active Directory hosted in the cloud. Many organizations operate a hybrid identity architecture during migration.

Frequently asked questions

Can Entra ID replace on-premises Active Directory?

For cloud-first organizations it can replace many identity and device-management needs, but legacy applications and Windows domain dependencies may still require AD DS.

Does Entra ID use Group Policy?

No. Modern device policy is typically delivered through Intune/MDM and other cloud management mechanisms.

Can I use AD and Entra ID together?

Yes. Hybrid identity is widely used during long-term migration or where on-premises workloads remain.

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