Microsoft 365 uses Azure Active Directory (Azure AD), a cloud-based user identity and authentication service that is included with your Microsoft 365 subscription, to manage identities and authentication for Microsoft 365. Getting your identity infrastructure configured correctly is vital to managing Microsoft 365 user access and permissions for your organization. There are two types of identity models in Microsoft 365: cloud-only identity, hybrid identity and hybrid identity. Azure AD authenticates user credentials based on its stored user accounts and passwords to access Microsoft 365 cloud services.”]