Active Directory vs Entra ID
How to compare Active Directory vs. Entra ID when Active Directory is still your primary identity store.
Published May 29, 2026)
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The debate between Active Directory vs. Entra ID comes down to one question: where should your organization's identity live? For IT teams that depend on AD as their primary identity store, moving everything to the cloud isn't always practical, or even necessary. With the right multi-factor authentication (MFA) and access security built on top of AD, organizations can meet modern security standards without migrating identity to the cloud.
In 2023, Microsoft renamed Azure Active Directory to Entra ID. On the surface, nothing changed. Entra ID offered the same cloud-native identity management Azure AD had always provided.
The rename made sense from Microsoft's perspective. The "AD" in Azure AD led some customers to confuse it with on-premises Active Directory, when the two are fundamentally different. Active Directory is an on-premises directory system. Entra ID is cloud-native and built around modern, cloud-centric assumptions. Microsoft wanted that distinction to be clear.
Active Directory was built for the traditional perimeter network. Entra ID was built for a world where users and applications can be anywhere.
Entra ID's main draw is convenience. Microsoft manages the infrastructure, and security controls like single sign-on (SSO) and MFA are built in. Admins don't need to configure users individually for each Microsoft application. Remote access over HTTPS replaces the need for a VPN for many scenarios. And Entra ID acts as a single management gateway for SaaS applications like Salesforce, Slack, and Zoom.
Active Directory, in contrast, keeps the organization fully in control of its own environment. That matters more than it might seem:
AD supports Kerberos, NTLMv2, and LDAP: protocols that keep legacy applications running
Organizations retain full control over data residency, which strict regulatory standards often require
The network continues to function even if internet connectivity is lost
AD infrastructure is a sunk cost. The servers and licenses are already paid for
Despite Microsoft's push toward cloud-first identity, most organizations still run both systems. They maintain AD for legacy applications, operational continuity, and regulatory reasons, while also using Entra ID or Microsoft 365 for cloud services.
Microsoft frames this as a migration path with the cloud as the destination. But for many organizations, the hybrid model isn't a stepping stone, it's their operating reality for the foreseeable future. Identity is consistently one of the last workloads to move to the cloud, particularly in regulated industries.
Security is where the Active Directory vs. Entra ID difference becomes most concrete.
Active Directory was built in the 1990s around a perimeter model and doesn't offer native MFA. Anyone who wants strong authentication in an AD environment needs to add third-party software.
Entra ID has MFA built in. It applies by default across cloud connections and integrates cleanly with Microsoft 365 and SaaS applications.
Microsoft does offer tools to bridge on-premises AD to Entra ID MFA, specifically Entra ID Connect and the NPS Extension for RADIUS clients, like VPNs and RD Gateways. But these add licensing costs and can create configuration overhead that smaller IT teams often struggle to manage.
For many organizations with on-prem infrastructure, migrating identity to the cloud is often a gradual process. For some highly regulated organizations, keeping identity on-premises is the only or the most simple way to meet tight cybersecurity compliance standards.
It's possible to keep AD as the primary identity store and still meet modern authentication and compliance requirements. The key is extending AD with a dedicated solution designed specifically for on-premises environments, rather than middleware designed to bridge to the cloud.
UserLock is built for this. With it, you can:
Add MFA, SSO, and contextual access controls directly at the AD authentication layer
Cover Windows logon, RDP, VPN, OWA, RemoteApp, and more
Map policies to existing AD users, groups, and OUs
Keep security simple, no need to create a duplicate directory or make architectural changes
The result is an AD environment that's better equipped against modern threats, without adding cost and complexity.
Every organization uses the cloud to some degree. The real question is where control over identity and authentication should sit in a hybrid world.
Entra ID offers a tightly integrated cloud environment at the cost of handing control to a platform the organization can't directly influence. AD keeps the organization in the driver's seat, but requires additional tooling to meet today's security standards.
For organizations that want to stay on-premises, that tooling exists. With the right solution built for AD, organizations can run secure, compliant identity management for many years on their own terms, on their own infrastructure.