![]() The following graphic summarizes how to manage users in the cloud identity model. When identity and authentication are handled completely in the cloud, you can manage user accounts and user licenses through the Microsoft Online Portal or Windows PowerShell cmdlets. No on-premises servers are required - Microsoft manages all of that for you. Azure AD is the cloud directory that is used by Office 365. In this model, you create and manage users in the Microsoft Office Portal and store the accounts in Azure AD. You can also switch to a different identity model if your requirements change. ![]() These factors are different for every organization this topic will review these key concepts for every identity model to help you to choose the identity you want to use for your deployment. Think about time, existing complexity, and cost. It is important to carefully consider which identity model to use to get up and running. This is often referred to as single sign-on. The users have the same password on-premises and in the cloud, and they do not have to sign in again to use Office 365. Synchronize on-premises directory objects with Office 365 and manage your users on-premises. You can also synchronize passwords so that the users have the same password on-premises and in the cloud, but they will have to sign in again to use Office 365. No on-premises servers are required to manage users it is all done in the cloud. Manage your user accounts in Office 365 only. You can choose from three main identity models in Office 365 when you set up and manage user accounts:
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