Federate On-Premises with Azure AD

This tutorial will guide you through the process of federating your on-premises identity infrastructure with Azure Active Directory (Azure AD). Federation allows users to access cloud resources using their existing on-premises credentials, providing a seamless single sign-on (SSO) experience.

Why Federate?

Single Sign-On (SSO): Users authenticate once on-premises and gain access to Azure AD-integrated applications.
Enhanced Security: Leverage existing on-premises security policies and controls.
Simplified User Management: Reduce duplicate identity management efforts.
Hybrid Identity: Bridge your on-premises and cloud identity environments.

Prerequisites

Note: Ensure you have administrative access to both your on-premises Active Directory and your Azure AD tenant. A trusted certificate authority (CA) is recommended for your federation server.

An Azure AD tenant with a custom domain verified.
On-premises Active Directory Domain Services (AD DS) environment.
A server that can host Active Directory Federation Services (AD FS) or another compatible federation provider.
Network connectivity between your on-premises environment and Azure AD.

Steps to Configure Federation

Step 1: Prepare Your On-Premises Environment

Ensure your on-premises AD DS is healthy and accessible. If you plan to use AD FS, you will need to install and configure the AD FS role on a server. For detailed AD FS setup, refer to the AD FS Setup Guide.

Step 2: Install and Configure Azure AD Connect

Azure AD Connect is the primary tool for synchronizing your on-premises identities to Azure AD and for configuring federation.

Action: Download and install Azure AD Connect from the Microsoft Download Center.

During the Azure AD Connect installation wizard:

Choose the Custom installation option.
Select the desired synchronization options (e.g., password hash synchronization, pass-through authentication, or federation). For federation, select Federation with AD FS.
Provide credentials for your on-premises AD DS and Azure AD.
Configure your AD FS farm or select an existing one.
Specify the UPN suffixes you want to use for federation.
Azure AD Connect will then configure the trust relationship between your AD FS and Azure AD.

Step 3: Verify Federation Trust

After the Azure AD Connect wizard completes, the federation trust should be established. You can verify this:

In Azure AD: Navigate to the Azure portal, go to Azure Active Directory > Azure AD Connect. Under 'Connectors', you should see your on-premises directory synchronized, and the sign-in method should indicate 'Federation'.
Using PowerShell: Connect to Azure AD using the Azure AD PowerShell module and run Get-MsolDomainFederationSettings -DomainName yourdomain.com. Check that the DomainState is 'Active' and the IssuerUri points to your AD FS server.

Step 4: Test User Sign-In

Attempt to sign in to an Azure AD-integrated application (like Office 365) using an on-premises user account. You should be redirected to your on-premises AD FS sign-in page, and upon successful authentication there, you should be logged into the Azure AD application.

Important: Ensure that your AD FS servers are accessible from the internet for external users. Publicly trusted SSL certificates are mandatory for federation endpoints.

Troubleshooting Common Issues

Incorrect UPN Suffixes: Ensure that the UPN suffix used by your on-premises users matches a verified custom domain in Azure AD.
Firewall Rules: Verify that the necessary ports (e.g., 443 for HTTPS) are open between your clients, AD FS servers, and Azure AD.
Certificate Expiration: Regularly monitor the expiration dates of your AD FS service communication certificates.
Synchronization Errors: Check the Azure AD Connect synchronization logs for any errors related to user or group synchronization.

By following these steps, you can successfully implement federation between your on-premises environment and Azure AD, enabling a secure and efficient hybrid identity solution.