Azure Active Directory (Azure AD)

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What is Azure Active Directory (AAD)?

Azure Active Directory (Azure AD or AAD) is Microsoft’s cloud-based directory and identity management service. It is a comprehensive solution that provides a set of features and capabilities to manage users, groups, devices, and other resources in your Azure AD tenant.

Azure AD also offers industry-leading security and compliance features to help you protect your data and resources. 

In 2022, lack of compliance is often incredibly costly for businesses, and security breaches can be fatal. AAD helps organizations mitigate both risks.

As security teams know, the cloud poses a unique set of challenges and risks to organizations. Azure AD is a key component of the Azure cloud platform, and it is used by many organizations to provide secure access to cloud resources.

Azure AD integrates with Azure and other Microsoft online solutions, like Office 365, to offer a single sign-on (SSO) experience for users.

Let’s take a closer look at the many ways companies use Azure AD:

Who uses Azure AD?

Azure AD is used by organizations of all sizes to manage users, groups, and other resources in their Azure AD tenant. It is also used by developers to build applications that authenticate and authorize users using Azure AD.

Although AAD benefits entire organizations, the people who will likely find it the most helpful are:

Current Azure subscribers

AAD requires an Azure subscription, so if you’re not an Azure subscriber, you won’t be able to use it.

Information technology (IT) teams

Azure AD provides centralized asset management for organizations. It also offers robust security and compliance features to help you protect your data and resources.

Developers

Azure AD makes it easy for developers to build applications that authenticate and authorize users using Azure AD. Developers can also use Azure AD to provision user accounts and groups in their applications.

Microsoft 365 or Office 365 users

Azure AD is designed to manage user accounts and groups in Microsoft 365 or Office 365. It also provides a single sign-on experience for users when they access Azure AD-connected applications.

Azure Active Directory (AAD)

Azure Active Directory vs. Windows Active Directory

Before Azure Active Directory, there was Windows Active Directory. So, what’s the difference between the two?

Here’s a quick look at the key distinguishing factors. While both services are used to store and manage user accounts, there are some important differences to take note of:

Windows AD Azure AD
  • Windows Active Directory is an on-premises directory service that is used to store and manage user accounts, group accounts, and computer accounts in a Windows domain.
  • Azure AD is a cloud-based directory service that is used to store and manage user accounts, group accounts, and computer accounts in an Azure tenant.
  • Windows Active Directory is designed to be used within a Windows domain.
  • Azure AD can be used in a Windows domain or in a non-Windows environment.
  • Windows Active Directory requires the use of on-premises servers.
  • AAD can be used without on-premises servers.
  • Windows Active Directory uses the Lightweight Directory Access Protocol (LDAP) for communication.
  • AAD uses the Security Assertion Markup Language (SAML) for communication.

Finally, AAD is a superset of Windows Active Directory and includes additional features and capabilities.

So, does Azure Active Directory replace Windows Active Directory?

No, AAD does not replace Windows Active Directory. It is designed to compliment and extend it.

If you’re using Azure AD in a hybrid environment that includes both on-premises and cloud resources, you can use Azure AD Connect to synchronize your on-premises users and groups with Azure AD. This will allow you to manage all of your users and groups from a single location.

Key AAD terminology

To fully understand AAD as a solution, it’s crucial to know and understand the following key terminology:

Azure account

An Azure account is an account that is used to access Azure resources. It can be either a Microsoft account or an organizational account.

Azure subscription

An Azure subscription is a logical container used to provision and manage Azure resources. An Azure subscription is associated with an Azure account.

Azure directory

An Azure directory is a cloud-based directory service used to manage users, groups, and other resources in an Azure AD tenant.

Azure AD tenant

A tenant is a logical container in Azure AD that represents an organization. It is used to store and manage user accounts, group accounts, and other resources in Azure AD.

Each Azure subscription can have only one Azure AD tenant associated with it.

Azure AD user

This is a user account that can be used to access Azure resources. Azure AD users are stored in an Azure AD tenant.

Azure AD supports two types of user accounts:

Microsoft account

A Microsoft account is a personal account that is used to access Microsoft services, such as Outlook.com, OneDrive, and Xbox Live.

Organizational account

An organizational account is a work or school account that is used to access Azure resources. Organizational accounts are created by an administrator in a tenant.

Azure AD group

A group is a collection of users that can be used to grant access to resources in Azure. Groups can be used to grant permissions to resources, such as Azure Virtual Machines, and can be used to control email distribution lists.

Azure AD supports two types of groups:

Security groups

A security group is used to grant permissions to Azure resources.

Distribution groups

A distribution group is used to control email distribution lists.

Azure AD Connect

Azure AD Connect is a tool that is used to synchronize on-premises users and groups with Azure AD. Azure AD Connect can be used in hybrid environments, such as those that include both on-premises and cloud resources.

The benefits of Azure AD Connect include:

  • Management of users and groups from a single location
  • The ability to use Azure AD as the identity provider for on-premises resources
  • Synchronization of on-premises passwords with Azure AD
  • Seamless integration with third-party applications

Azure AD Domain Services

Azure AD Domain Services is a cloud-based service that provides an alternative to on-premises Active Directory Domain Services (AD DS). Azure AD Domain Services allows you to use your existing Azure AD tenant as a managed domain.

With Azure AD Domain Services, you can:

  • Join virtual machines to a domain without the need for on-premises infrastructure.
  • Authenticate and authorize users with their Azure AD credentials.
  • Apply Group Policy Objects (GPOs) to control access and configure settings for domain-joined resources.

Azure AD Domain Services is a managed service, which means that Microsoft is responsible for patching, updating, and backing up the service.

How is Azure AD different from Office 365?

Azure AD is a cloud-based identity and access management service, while Office 365 is a cloud-based productivity suite.

Azure AD offers features and capabilities that are used to manage user accounts, groups, and other resources in Azure. Office 365 provides a set of productivity applications, such as Word, Excel, and PowerPoint.

While Azure AD and Office 365 can be used together, they are two separate services.

The core features of AAD

Azure AD offers a number of features to help you manage your users, groups, and resources:

Application management

Application Proxy, Azure AD Connect Health, and Azure AD Domain Services are some of the features that can be used to manage applications in Azure AD.

Authentication and Authorization

Azure AD provides a number of authentication and authorization features, such as single sign-on (SSO), multi-factor authentication (MFA), and identity federation.

AAD for developers

Developer tools, such as the Azure AD Graph API and Azure AD PowerShell, make it easy for developers to build applications that authenticate and authorize users using Azure AD.

Business-to-Business (B2B)

B2B collaboration allows you to invite guest users from other organizations to access your resources. Managing external partners is a breeze with AAD.

Business-to-Customer (B2C)

B2C is a cloud-based identity management solution for businesses that want to provide their customers with a single sign-on experience.

Conditional Access

Conditional access is a feature of Azure AD that allows you to control how users are allowed to access your resources. You can use it to enforce MFA, block access from certain locations, and more.

Device management

Device management helps you control mobile devices and PCs in your organization. You can use it to create and enforce device policies, deploy applications, and more.

Domain services

Domain Services provides group policy, Active Directory-based authentication, and other managed services in the cloud.

Managed identities

This is a feature of Azure AD that allows you to manage the identities of your Azure resources. This enables you to control who has access to your resources and what they can do with them.

Privileged identity management (PIM)

PIM is a feature that helps you manage and monitor privileged access to your resources.

Solutions for reporting and monitoring

Azure AD provides a number of reports and monitoring tools to help you track activity in your directory. These reports can be used to troubleshoot issues, track activity, and more.

What are the benefits of using AAD for businesses and organizations?

There are many benefits of using Azure AD for businesses and organizations, including:

Single sign-on (SSO) for users

Users can sign in to all of their Microsoft online services with a single account. Without AAD, users would need to sign in to each service separately. Separate sign on activity can be cumbersome, and it poses additional security risks.

With SSO, your organization will benefit from:

  • Reduced password fatigue for users
  • Fewer help desk calls due to forgotten passwords
  • Increased security by reducing the number of passwords that need to be managed
  • Improved productivity by allowing users to access all of their services with a single sign-on

Improved security and compliance

Azure AD offers top-of-the-line security and compliance features to help you protect your data and resources from attackers.

These security-boosting features include:

  • Multi-factor authentication (MFA)
  • Device management
  • Azure Information Protection
  • Data loss prevention (DLP)
  • Auditing and reporting
  • Identity governance

Centralized management for users and devices

You can manage all your users, groups, and devices in your organization from one Azure AD hub.

The benefits of centralized management include:

  • Improved security by allowing you to control who has access to your resources
  • More efficient management of all of your resources from a single location
  • The ability to track and monitor activity in your directory

Greater flexibility for developers

Developers love Azure AD because it makes it easy to develop and deploy cloud-based applications. Since Azure AD is a cloud-based service, there’s no need to install or manage clunky on-premises software.

Here are the features that are most helpful for developers:

  • The ability to quickly provision and de-provision users
  • The ability to easily add or remove users from groups
  • Control of user access to applications and services
  • Easy integrations with other services

Microsoft 365 or Office 365 integration

Azure AD is used to manage user accounts and groups in Microsoft 365 or Office 365. It also provides a single sign-on experience for users when they access Azure AD-connected applications.

Azure AD provides a consistent login experience for users across all of their Microsoft online services. This makes it easy for users to access the resources they need when they need them.

What are some of the challenges associated with implementing and using AAD in a business or organization?

There are a few challenges of using Azure AD, including:

It requires an Azure subscription

You must have an Azure subscription to use Azure AD.

Appropriate on-premises infrastructure is one of the key prerequisites

Without the proper infrastructure in place, you won’t be able to use Azure AD.

User management can be complex

Azure AD’s user management features are robust, but they can be complex to use. You will need to dedicate the time to learn how to use them effectively.

However, with proper training, your team will be able to use Azure AD effectively to take advantage of all the benefits it offers.

Limited integration with on-premises applications and resources

Azure AD does not always integrate seamlessly with on-premises applications and resources. To resolve this, you may need to use Azure AD Connect.

Despite these challenges, Azure AD is still an incredible identity management service that can help businesses and organizations manage their users, groups, and resources.

If you need help setting up and integrating Azure AD into your organizational processes, our team at Oort can help.

Common attacks against AAD and how to mitigate them

In general, you can protect your AAD system from attacks by using Azure AD Connect Health.

Azure AD Connect Health monitors the health of your AAD sync process and provides guidance on how to fix any issues. You can also use Azure AD Identity Protection to help protect your AAD system from attacks.

Here are a few attacks your AAD system might face:

Password spraying

Password spraying is a type of brute force attack that targets a large number of user accounts with a few common passwords.

What you can do to prevent password spraying

  • Use Azure AD Password Protection to block common passwords.
  • Enable MFA for all user accounts.
  • Monitor login activity for unusual behavior.
  • Block IP addresses that are exhibiting suspicious behavior.

Pass-the-hash attacks

Pass-the-hash attacks are a type of credential theft attack in which an attacker steals the password hash of a user and uses it to authenticate to systems and resources.

What you can do to prevent pass-the-hash attacks

  • Use MFA.
  • Keep an eye on all login activity across your organization.

Privilege escalation attacks

Privilege escalation attacks are a type of attack in which an attacker gains access to more privileged account than they should have.

What you can do to prevent privilege escalation attacks

  • Restrict access to privileged accounts.
  • Block suspicious IP addresses.

Denial of service attacks

DOS attacks occur when an attacker prevents real users from accessing systems and resources within an organization.

What you can do to prevent denial of service attacks

  • Monitor login activity for unusual behavior.
  • Block IP addresses that are exhibiting suspicious behavior.

Phishing attacks

Phishing attacks are a type of social engineering attack in which an attacker tricks a user into revealing their login credentials.

What you can do to prevent phishing attacks

  • Train users to recognize phishing emails.
  • Enable multi-factor authentication for all user accounts.

When does your business need AAD?

There are a few situations when you might want to use Azure AD:

When you need a robust identity management solution

AAD is known for being a comprehensive solution to identity management.  It can provide your business with the features and tools it needs to effectively manage users, groups, and resources.

When you need centralized user and device management

AAD can help you centrally manage users and devices across your organization. This can be helpful if you have a lot of employees or if you need to manage devices in different locations.

When you need to protect your Azure resources

AAD can help you protect your Azure resources from unauthorized access from external malicious actors.

When you need to comply with industry-specific regulations

Compliance is an important part of any business. Azure AD can help you meet regulations and avoid costly fines.

The AAD licenses

Azure AD comes with all Microsoft Online business services. However, there are premium features you can gain access to by upgrading your account.

Here are the AAD licenses available in 2022:

AAD Free

This is the base-level Azure AD service. It includes:

  • User and group management
  • Device management
  • Application management
  • Security and compliance

AAD Premium P1

This is the first premium Azure AD license that comes with all the features of the Free license, plus additional features like:

  • Enterprise-level identity protection
  • Self-service password reset
  • Heightened cloud security

AAD Premium P2

This is the second premium Azure AD license. It includes all the features of the P1 license, along with other notable features such as:

  • Advanced security reporting
  • Auditing

The “à la carte” licenses for features

There are certain Azure AD features that you can pay for on a “pay as you go” basis. These features include:

  • Domain Services: This is a managed service that provides domain controller as a service in Azure. It includes all the features of Azure AD, as well as additional features such as group policy and Lightweight Directory Access Protocol (LDAP).
  • B2B: This allows you to invite and collaborate with users from other organizations. It includes all the features of Azure AD, as well as additional features such as guest user management and access reviews.
  • B2C: This is a feature that allows you to build customer-facing applications that use Azure AD for authentication and authorization. It includes all the features of Azure AD, as well as additional features such as social login and user profile management.

Pricing for AAD

The pricing for AAD depends on the edition you choose and the number of users you have.

  • AAD Free: This edition is free for up to 10 users.
  • AAD Premium P1: This edition starts at $6 per user per month.
  • AAD Premium P2: This edition starts at $9 per user per month.
  • AAD Domain Services: This feature is charged at $0.50 per hour.
  • AAD B2B: This feature is charged at $2 per user per month.
  • AAD B2C: This feature is charged at $0.25 per active user per month.

How is Azure AD different from other identity management services? 

While there are many identity management services available, Azure AD offers a number of features that set it apart from the others:

Azure AD is integrated with Azure and other Microsoft online services. This provides a single sign-on experience for users.

Single sign-on (SSO) is a user authentication process that allows a user to access multiple applications with one set of credentials. It is helpful for users because they only have to remember one set of credentials, and it is beneficial to organizations because it reduces the number of passwords that need to be managed.

Azure AD is a comprehensive identity management service.

AAD is a cloud-based identity and access management service from Microsoft. It offers a number of features to help organizations manage users, groups, and resources. AAD is used by organizations of all sizes to manage users, groups, and other resources in their Azure AD tenant. It is also used by developers to build applications that authenticate and authorize users using Azure AD.

AAD is continuously updated with new features and improvements.

You can rely on it to provide robust security and compliance features to help protect your data and resources.

How is AAD being used by businesses today? 

AAD is being used by businesses of all sizes to manage their users, groups, and resources. AAD is particularly well suited for organizations that are using Azure and other Microsoft online services.

Businesses use Azure AD to:

Provide a single sign-on experience for users

Instead of each user having to remember and manage multiple sets of credentials, they can sign in to all of their Microsoft online services with a single account. This process helps organizations stay organized.

Configure applications for SSO and user access

Azure AD can be used to configure applications for single sign-on (SSO) and user access. This process helps businesses save time and money by reducing the number of passwords that need to be managed.

Manage users, groups, and devices

Azure AD provides an easy way to manage users and groups. businesses can also use Azure AD to manage devices, such as PCs and laptops, that are connected to the Azure AD tenant.

Integrate with on-premises applications and resources

Azure AD offers a number of features to help businesses integrate their on-premises applications and resources with Azure AD. This includes the ability to synchronize on-premises Active Directory with Azure AD.

Protect data and resources

Azure AD provides a number of security and compliance features to help businesses protect their data and resources. These features include built-in security controls, as well as the ability to integrate with third-party security solutions.

Here are a few of the available integrations:

  • Office 365
  • Dynamics CRM Online
  • Intune
  • Power BI

Detect and mitigate identity-based risks

Azure AD helps businesses become aware of the identity-based risks they face on a daily basis. This includes the ability to monitor for suspicious activity, such as brute force attacks, and take action to mitigate the risks.

Classify and protect data with Azure Information Protection

Azure Information Protection (AIP) is a service that helps businesses classify and protect their data. AIP can be used to label data, such as documents and emails, with a classification label. The classification label can be used to control how the data is handled, such as who can access it and what actions can be taken on it.

AIP can also be used to encrypt data so that only authorized users can access it.

Manage and monitor privileged accounts

Privileged accounts are accounts that have been assigned administrative privileges. Azure AD can be used to manage and monitor privileged accounts. This includes the ability to track who is using the account, as well as what actions they are taking.

If they are not monitored, privileged accounts can pose a major security risk. One rogue admin account can be used to compromise an entire organization’s data.

Integrate their on-premises directory with Azure AD

Azure AD Connect is a tool that helps businesses synchronize their on-premises directory with Azure AD. This process can be used to keep user and group information up-to-date, as well as to provision and de-provision users in Azure AD.

Using Azure AD Connect, organizations can:

  • Synchronize Windows Active Directory with Azure AD for a seamless integration
  • Provision and de-provision users in Azure AD
  • Keep user and group information up-to-date to avoid future technical difficulties
  • Integrate Azure AD with on-site applications and resources to improve efficiency and productivity within the organization

How can you get started using AAD for your business or organization?

If you’re interested in using AAD for your business or organization, there are a few things you need to do to get started:

1. Sign up for a free Azure account.

You can register for a free Azure account here.

2. Create an Azure AD tenant.

This is required to use Azure AD. You can create a new Azure AD tenant by following these instructions.

3. Configure Azure AD for your organization.

Once you have your Azure AD tenant, you will need to configure it for your organization. Learn more.

4. Add users and groups to your Azure AD tenant.

After you have configured Azure AD for your organization, you can add users and groups to it. Here’s how.

5. Configure applications for SSO and user access.

Once you have added users and groups to your Azure AD tenant, you can configure applications for single sign-on and user access. Learn how to configure your applications for SSO using Azure AD.

6. Detect and mitigate identity-based risks.

Azure AD will help you detect and mitigate identity-based risks. You can read more about identity protection here.

7. Classify and protect data with Azure Information Protection.

Azure Information Protection is a service that helps you classify and protect data. You can find more information on Azure Information Protection here.

8. Manage and monitor privileged accounts.

Azure AD provides a number of features to help you manage and monitor privileged accounts. Learn more about these features.

9. Integrate your on-premises directory with Azure AD.

If you have an on-premises directory, you can integrate it with Azure AD. Read more information on AAD integration.

Once you have completed these steps, you will be ready to use Azure AD for your business or organization.

Need Azure AD analytics in your organization?

As we’ve discussed, there’s a lot that goes into deploying and securing Azure AD in an organization. Things can get out of control pretty quickly, and when they do, the effects can be hard to understand and unwind. 

Oort enables instant visibility and security for your organization’s Azure AD including identity and analytics and identity threat detection and response. When Azure AD isn’t set up properly, or when users aren’t taking advantage of its features, identity security vulnerabilities emerge and pose risk to your organization. 

With Oort monitoring Azure AD for your organization, you get peace of mind and efficient response to identity threats. 

Book a demo today!