Hybrid Identity Management: Connecting On-Prem AD, Entra, and Azure Local

Introduction

As enterprises accelerate digital transformation, hybrid cloud and hybrid identity architectures have become foundational. Integrating on-premises Active Directory (AD) with Entra ID (formerly Azure AD) enables seamless authentication, access control, and governance across traditional datacenters and modern Azure Local SDN (Azure Stack HCI) deployments. This guide offers a practical walkthrough for IT admins and architects seeking robust hybrid identity management.

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Table of Contents

1. What is Hybrid Identity?
2. Core Benefits of Hybrid Identity
3. Architecture Overview
4. Pre-Requisites and Planning
5. Deploying Azure AD Connect
6. Syncing Users, Groups, and Devices
7. Integrating with Azure Local SDN
8. Authentication Workflows in Hybrid Topologies
9. Securing and Hardening Your Hybrid Identity
10. Compliance and Governance
11. Troubleshooting Hybrid Identity
12. Summary

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What is Hybrid Identity?

Hybrid identity bridges the gap between on-premises Active Directory and Microsoft Entra ID. By synchronizing identity objects, organizations allow users to access resources hosted on-premises, in Azure Local, and in the public cloud, using a single, secure identity.

Why it matters:
With hybrid identity, users enjoy single sign-on (SSO), streamlined access management, and consistent security policies, no matter where resources are hosted.

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Core Benefits of Hybrid Identity

• Seamless SSO: Users sign in once to access on-prem and cloud resources.
• Centralized Policy Enforcement: Apply security controls across environments.
• Simplified Lifecycle Management: Provision, modify, and retire users or groups from a single source.
• Consistent User Experience: Minimize password prompts and credential fatigue.
• Modern Security Features: Enable Multi-Factor Authentication (MFA), Conditional Access, and risk-based sign-in.

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Architecture Overview

Below is a high-level view of hybrid identity in a typical enterprise deploying Azure Local SDN:

• On-Prem AD DS: The authoritative source of users, groups, and device objects.
• Azure AD Connect: Synchronizes identities between AD DS and Entra ID.
• Entra ID: Cloud-based identity for Microsoft 365, Azure, and Azure Local SDN management.
• Azure Local SDN: Hybrid/on-prem resources governed by both on-prem AD and Entra ID.

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Pre-Requisites and Planning

Key Requirements

• Existing On-Prem Active Directory Domain Services (AD DS)
• Microsoft Entra ID (formerly Azure AD) Tenant
• Azure Local SDN (Azure Stack HCI) Deployed
• Windows Server 2016 or later (for Azure AD Connect)
• Administrative Credentials: For both on-prem AD and Entra ID

Network and Security Considerations

• Open required ports (TCP 443, 389, 636, etc.) between Azure AD Connect, AD DS, and Entra endpoints.
• Use a dedicated service account with minimum privileges for sync operations.
• Review existing UPN (User Principal Name) suffixes and resolve duplicates before syncing.

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Deploying Azure AD Connect

Azure AD Connect is the engine that synchronizes on-prem AD with Entra ID. Here is how to deploy it step by step:

1. Download and Install Azure AD Connect

• Download from the Microsoft Azure portal.
• Install on a member server (not domain controller) with access to both AD DS and the Internet.

2. Launch the Setup Wizard

• Choose Express Settings for basic sync, or Custom for granular control.
• Custom is recommended for most hybrid/enterprise scenarios.

3. Connect to AD DS and Entra ID

• Enter on-prem AD admin credentials.
• Enter Entra ID global admin credentials.

4. Configure Synchronization Options

• Select Sync Features: Password Hash Sync, Pass-through Authentication, or Federation (AD FS).
• Choose OU Filtering: Select specific OUs for sync to limit scope.
• Enable Hybrid Join: Allow devices to register in Entra ID.

5. Start Initial Sync

# Force a manual sync (after install)
Start-ADSyncSyncCycle -PolicyType Initial

• Monitor progress in the Synchronization Service Manager.

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Syncing Users, Groups, and Devices

Filtering and Attribute Mapping

• Use OU and attribute filtering to control which objects sync.
• Avoid syncing service or admin accounts unless required.

UPN and DNS Considerations

• Align on-prem UPN suffixes with a verified domain in Entra ID.
• Remediate duplicate or invalid UPNs.

Password Sync and SSO

• Enable Password Hash Sync for the simplest experience.
• For environments requiring pass-through or federation, configure accordingly.

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Integrating with Azure Local SDN

Hybrid identity underpins secure access to Azure Local SDN resources. Common scenarios:

1. Admin Access to Azure Local SDN via Entra ID

• Azure Local (Stack HCI) integrates with Entra ID for managing SDN via Windows Admin Center (WAC) and PowerShell.
• Assign RBAC (role-based access control) in Azure Local using Entra ID groups.

2. User Authentication for Services

• Leverage Hybrid Join for device registration. This allows devices managed by Intune or ConfigMgr to access Azure Local SDN-based services.

3. Access Control

• Apply Conditional Access Policies via Entra ID for connections to Azure Local portals, VMs, or workloads.

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Authentication Workflows in Hybrid Topologies

Scenario: User authenticates to a VM hosted in Azure Local SDN using their on-prem AD credentials, which are synchronized to Entra ID.

1. User signs in with their corporate credentials.
2. The authentication request checks the local domain controller.
3. If accessing cloud-managed apps or Azure Local WAC, Entra ID validates token and Conditional Access.
4. If Hybrid Join is enabled, the device and user context are evaluated together for SSO.

PowerShell Example: List Entra ID users synced from on-prem AD

Get-AzureADUser | Where-Object {$_.DirSyncEnabled -eq $true}

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Securing and Hardening Your Hybrid Identity

Best Practices

• Enable MFA for all admin and privileged accounts in Entra ID.
• Limit Sync Scope to only required OUs and users.
• Regularly Review Sign-In Logs in Entra ID portal.
• Update Azure AD Connect promptly for security patches.

Security Controls for Azure Local SDN

• Implement network segmentation and NSGs for management interfaces.
• Monitor Azure Local SDN logs for suspicious authentication attempts.

Sample: Enable Conditional Access for Azure Local WAC

1. In Entra ID, navigate to Security > Conditional Access.
2. Create a new policy targeting Azure Local WAC app.
3. Require MFA and trusted device compliance.

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Compliance and Governance

• Audit Trails: Enable and review sign-in and access logs in both AD DS and Entra ID.
• Least Privilege: Assign minimum rights to service and admin accounts.
• Data Residency: Ensure synced attributes comply with your region’s data laws.
• Role Reviews: Periodically review RBAC and group memberships across on-prem and Entra.

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Troubleshooting Hybrid Identity

Common Issues:

• Sync Errors: Use Synchronization Service Manager and Event Viewer for detailed logs.
• UPN Mismatch: Check and align UPNs in both AD and Entra ID.
• Device Registration Fails: Verify Hybrid Join prerequisites (group policy, AAD Connect config).

Useful Commands:

# View the last sync status
Get-ADSyncScheduler

# Trigger a delta sync
Start-ADSyncSyncCycle -PolicyType Delta

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Summary

A successful hybrid identity implementation enables organizations to manage users, devices, and access across on-premises, Azure Local, and the cloud, with consistency and strong security. By following this guide, IT admins and architects can ensure seamless authentication, unified governance, and future-ready access control for hybrid and modern workloads.

Disclaimer: The views expressed in this article are those of the author and do not represent the opinions of Microsoft, my employer or any affiliated organization. Always refer to the official Microsoft documentation before production deployment.