Leaving On-premises Active Directory: Is Entra ID the Future?

As businesses continue adopting cloud-first strategies, one big question emerges—what’s the next step for aging on-premises infrastructure?  

For many companies, this involves abandoning Active Directory (AD) as a core part of IT management. But moving away from AD isn’t as simple as flipping a switch.  

Chris, one of our consultants at Synextra, made a video explaining that while the shift to the cloud may seem straightforward, the reality often brings unique challenges—particularly when dealing with legacy systems deeply integrated into AD. He asks, “Is your organisation ready to ditch AD? If not, what’s standing in your way?” 

Moving to a modern identity management system like Microsoft Entra ID offers increased security, scalability, and reduced overhead, but there’s a lot to consider.  

We’d recommend checking out Chris’ video, which includes an in-depth look at how you can approach things. Meanwhile, this article will help you understand if your organisation might be ready for this transition, and what steps to take next. 

Active Directory (AD) has long been the backbone of many organisations’ IT environments. It’s a powerful directory service—it manages users, computers, devices, and even services like DNS and group policies.  

For decades, companies have relied on AD to manage identity and access across on-premises networks, but maintaining AD requires specific technical expertise that’s becoming more and more rare these days. The traditional AD admin role is something that’s slowly fading away, with a shrinking talent pool capable of managing these complex infrastructures. 

As well as this, AD can be resource-heavy. Companies face costs related to physical or virtual server infrastructure, server licenses, and the time and expertise needed to manage and maintain it. It’s still in use today, but as IT continues to evolve, businesses are realising that AD might actually be the weakest link in their cloud adoption strategy. 

Entra ID (formerly Azure AD) is Microsoft’s cloud-native identity and access management service, streamlining various ID security processes through the cloud. Built on Azure’s infrastructure, Entra ID eliminates the need for on-premises servers, making it easier to manage at scale.  

Chris highlights that it offers great integration with the entire Microsoft cloud ecosystem, which has become the core focus for future development. “With Entra ID, you get to benefit from Microsoft’s security advancements and a more scalable, easily managed environment,” he explains. 

Moving away from AD and adopting Entra ID means moving to an infrastructure-less identity management system. No more maintaining backup systems, no more disaster recovery concerns—it’s all managed for you in the cloud. Plus, the scalability and security are pretty much unparalleled. With features like multi-factor authentication, conditional access, and improved integration with Office 365 and other Azure services, it’s a smart choice for companies wanting to embrace the future. 

For more in-depth information on Entra ID and its uses, you can enjoy our Azure Masterclass here, where we walk you through setting up and securing your Entra ID environment.  

The decision to abandon Active Directory often stems from a desire to reduce costs, increase security, and embrace a cloud-first model. 

Active Directory, while still powerful, now threatens to become a weak link in your security posture. Today’s cloud environments are more secure, scalable, and easier to manage without the infrastructure headaches. 

Maintaining AD infrastructure means dealing with complex security updates, hardware management, and admin roles that are becoming less common. So, switching to Entra ID reduces these burdens while enhancing your security posture, thanks to features like multi-factor authentication, conditional access, and better overall protection against modern threats.  

Plus, moving to Entra ID offers scalability—whether you’re a small business or a global enterprise, the infrastructure scales with you. This means the associated costs are dramatically lower without the need for on-prem servers. 

Leaving behind Active Directory might seem appealing, but there are some challenges you have to consider. The most common issue? Legacy applications. Many organisations find themselves 95% of the way to adopting a cloud-first strategy, only to discover that a single line-of-business application is still reliant on AD. And you don’t want to be the company that’s forced to maintain an entire AD setup just for one outdated app. 

Authentication protocols, such as Kerberos or NTLM, and older databases using SQL Server might also pose challenges during the migration. These applications might not yet support modern authentication protocols like OAuth or SAML.  

Another consideration is file storage. Many businesses still rely on Windows file servers, which need to be replaced or adapted with modern alternatives like Azure Files or OneDrive. If you can deal with these issues, though, it could certainly be worth the move.  

One of the biggest hurdles when moving away from AD is device management.  

For organisations using centralised desktop solutions such as Citrix or RDS, Active Directory may be deeply integrated into the infrastructure. Even with cloud services like Azure Virtual Desktop, Chris warns that you might still encounter roadblocks: “FSLogix profile containers, for instance, often require hybrid identity, meaning AD isn’t as easy to eliminate as you might think.” 

For organisations focused on mobility, managing devices through Entra ID and Intune offers a cleaner solution, but you’ll need to make sure everything—apps, user accounts, and network configurations—can function smoothly without AD. In many cases, legacy VPN and DNS configurations also depend on AD, so these systems need to be updated before fully decommissioning your AD infrastructure. 

Migrating away from Active Directory also affects your network setup, and this can’t be overlooked. Many VPN solutions still depend on Active Directory for authentication, and while most modern VPNs support newer methods like SAML, you’ll definitely want to make sure your systems are compatible. For organisations with on-prem devices connecting via VPN, transitioning to Entra ID can mean rethinking how you authenticate these users. 

File shares are another critical area. If your organisation still relies on traditional Windows file servers, these need to be updated to cloud-based solutions like Azure Files, OneDrive, or SharePoint. DNS configuration is another aspect that might require updating if you rely on AD for DNS resolution.  

Cloud-based DNS solutions, such as Azure Private DNS, can help resolve private resources without the need for dedicated on-prem DNS servers. Ensuring these elements are properly configured is key to a smooth transition. 

For organisations not yet ready to fully decommission AD, Entra Domain Services (formerly known as Azure AD DS) could be an intermediate solution. Entra DS isn’t a direct replacement for Active Directory, but it can bridge the gap for companies that need to maintain some legacy systems. 

Entra Domain Services syncs with Entra ID, so your cloud identity remains the master, and you won’t need to manage Windows servers anymore. That said, there’s still a cost associated with running Entra DS, and it’s important to get a view of its limitations before committing to it as a solution. 

Entra Domain Services allows for some familiar features, such as Group Policy and legacy application support, while still moving most of your infrastructure to the cloud. For many businesses, it stands as the middle ground they need while planning a full transition away from AD. 

So, ditching Active Directory for Entra ID isn’t always a walk in the park. You’ll need to consider some of the sticking points—whether it’s your apps, devices, or network. But in many cases, it’s worth the effort if you want to be a cloud-first company.  

While a fully cloud-native environment has its advantages in scalability, security, and management, legacy systems can occasionally be a bit stubborn.  

The move can take careful planning and understanding of both technical and business needs. If you’d like to hear how Synextra’s managed Azure experts can take this off your hands, get in touch today.