What It Means to Convert On-Prem AD Users to Cloud Accounts in Office 365

Organizations convert On-Prem AD Users to cloud accounts in Office 365 when they stop using local servers. About one out of ten companies now move from on-premises Active Directory to cloud identity platforms. Some reasons are to use Single Sign-On, prepare for new operating system upgrades, and improve security by keeping admin accounts separate. Careful planning and communication help keep accounts active and functional during the conversion. Testing and monitoring the process also help prevent issues for users.

Key Takeaways

• Changing on-premises AD users to cloud accounts means user management moves from local servers to Office 365. This helps make things safer and easier for admins.

• Getting ready is important. You should make backups, set the right permissions, and test with small groups. This helps stop problems during the change.

• Tools like Azure AD Connect and PowerShell modules help make the move smoother. They also make it easier to watch the process.

• Some common problems are sync errors and login issues. You can stop these by matching usernames and email addresses in both systems. Careful planning also helps.

• After the change, admins manage users in the cloud. They can use stronger security like multi-factor authentication. They also help users with password and sign-in changes.

Convert On-Prem AD Users: Overview

What Conversion Means

Converting on-prem AD users to cloud accounts in Office 365 is about changing how user identities are handled. First, you stop syncing between the local Active Directory and Azure AD. Next, admins remove the ImmutableId attribute to break the link. This step lets the user account be managed in the cloud. The account is no longer controlled by local servers. Now, admins can change user info, reset passwords, and give out licenses using cloud tools.

Tip: Always try the conversion with a test user first. Back up important data before you make any changes.

When to Convert

Organizations convert on-prem AD users for different reasons:

• They want all identity management in the cloud.

• They plan to shut down their local Active Directory servers.

• They need to manage resource accounts, like meeting rooms, that must use cloud authentication.

• They want to avoid problems with federation or multi-factor authentication for some accounts.

• They want to make user management easier and use less local equipment.

These reasons often come up during cloud moves or when companies want to update their IT systems.

Key Impacts

Converting on-prem AD users changes user management and sign-in in several ways:

1. User management moves from local servers to cloud tools like Microsoft 365 Admin Center.

2. Sign-in methods change to use new security features, like multi-factor authentication and conditional access.

3. Apps that used on-premises AD may need updates to work with Azure AD.

4. Admins get new ways to automate, watch, and set security rules.

5. The process makes things safer and easier to grow, but you must plan well to avoid problems.

Organizations should check that the user’s source changes from "Windows Server AD" to "Azure Active Directory." Testing and watching after the move helps make sure users can sign in and use their stuff without trouble.

Preparation Steps

Prerequisites

Before you change on-premises Active Directory users to cloud accounts in Office 365, you must meet some rules.

• You need global administrator rights in Azure AD and domain administrator rights on-premises to control the process.

• You must use Windows Server 2012, 2016, or 2019 with a graphical interface.

• Your system needs .NET Framework 4.5.1 or newer and PowerShell 3.0 or newer. The RemoteSigned policy must be on.

• You need outbound HTTPS to Microsoft servers, with TCP ports 80 and 443 open and TLS 1.2 turned on.

• The on-premises Active Directory must use a routable domain ending, like .com or .net, for syncing to work.

• Azure AD Connect must be on a domain controller or member server to link on-premises AD with Azure AD.

• You must import PowerShell modules like Azure Az and Exchange Online Management to run Microsoft 365 scripts. These modules need network access to certain Microsoft endpoints and tenant setup details.

Note: If you do not have the right permissions or setup, the conversion might not work or could cause problems.

Backups and Planning

Good planning and backups keep user data safe and help the move go well.

1. Use password hash sync as a backup. This lets users sign in if on-premises servers go down.

2. All users, especially admins, should use multifactor authentication to lower security risks.

3. Keep admin accounts and Privileged Access Workstations separate to protect admin access.

4. Make an emergency plan with clear roles for watching and handling security events.

5. Use Microsoft 365 Secure Score and activity tools often to keep security strong.

6. Check business needs, gather user account info, and plan mailbox moves before you start.

Tip: Test with lab accounts first to find problems before they affect real users.

Tools Needed

You need some tools to help move on-premises AD users to cloud accounts.

• Azure AD Connect is the main tool for syncing and managing identities between on-premises AD and Office 365.

• PowerShell modules like Azure Az and Exchange Online Management help admins manage users and run scripts.

• Some groups use cloud tools like Quest On Demand Migration for big or tricky moves. This tool helps with directory sync, password sync, and mailbox moves without extra hardware.

• Dashboards in these tools help you plan, automate, and watch the migration.

Pick tools that fit your environment and migration needs to make sure things go well.

Conversion Process

Changing on-premises Active Directory users to cloud accounts in Office 365 has many steps. Each step changes how user identities are managed. These steps help keep accounts working during the move. The next parts explain what happens at each stage.

Disable Directory Sync

The first step is to turn off directory sync. This stops the link between local Active Directory and Azure AD. You use PowerShell commands and Microsoft Graph modules for this.

1. Remove Azure AD Connect from the server in Control Panel.

2. Open PowerShell as admin and add Microsoft Graph modules:

Install-Module Microsoft.Graph -Force
Install-Module Microsoft.Graph.Beta -AllowClobber -Force

1. Connect to Microsoft Graph with the right permissions:

Connect-MgGraph -Scopes "Organization.ReadWrite.All,Directory.ReadWrite.All"

1. Check if directory sync is on:

Get-MgOrganization | Select OnPremisesSyncEnabled

1. Turn off directory sync:

$organizationId = (Get-MgOrganization).Id
$params = @{ onPremisesSyncEnabled = $false }
Update-MgOrganization -OrganizationId $organizationId -BodyParameter $params

1. Make sure sync is off:

Get-MgOrganization | Select OnPremisesSyncEnabled

Note: It can take up to 72 hours for the change. Users might have less access for up to 60 minutes.

Remove ImmutableID

ImmutableID links each on-premises AD user to Azure AD. Removing this was once common to Convert On-Prem AD Users to cloud-only accounts. Now, Microsoft blocks changes to ImmutableID on synced accounts. If you try to clear ImmutableID with PowerShell, you get errors. So, you must turn off directory sync for the whole tenant instead of changing each user.

• ImmutableID is a special bridge between on-premises and cloud accounts.

• Microsoft does not let you remove or change ImmutableID for synced users now.

• This affects cases where you want to keep mailboxes or change users to shared mailboxes after removing their on-premises accounts.

Tip: Always check Microsoft’s latest rules, because they can change.

Move Users to Cloud

After you turn off directory sync, Azure AD accounts become cloud-managed. These accounts are not linked to local Active Directory anymore. Now, admins can change user info, reset passwords, and give licenses in the cloud.

The usual way to move users is:

• Mark on-premises accounts to stop syncing, like setting a custom attribute.

• Run a delta sync to update Azure AD.

• Check that the account shows as "cloud only" in Microsoft 365 Admin Center.

• Export and import important info, like proxy addresses, if needed for mail or apps.

Note: Try this with a small group first to make sure it works before moving everyone.

Re-enable Sync (if needed)

Some groups may want to turn directory sync back on after moving some users. This lets them manage other accounts with on-premises AD but keeps some users cloud-only. Admins can turn sync back on with PowerShell:

$params = @{ onPremisesSyncEnabled = $true }
Update-MgOrganization -OrganizationId $organizationId -BodyParameter $params

Caution: Turning sync back on does not change users already moved to cloud-only. It will start syncing other accounts again.

Batch vs. Individual User Conversion and Downtime

Groups can Convert On-Prem AD Users in batches or one by one. Batch migration moves many users together. This helps with testing and lowers risk. Individual conversion picks certain users, often with automated tools.

• Batch migration finds problems early and limits trouble for the group.

• Individual conversion lets you focus on important users or accounts.

• Automated tools help with both ways, making retries and tracking easier.

During the move, users might have short downtime, especially when sign-in changes. Some services can take up to 60 minutes. Doing the move when fewer people are using the system helps avoid problems.

For more scripts and advice, check Microsoft’s official guides and tech forums.

Troubleshooting Issues

Sync Errors

Sync errors can happen when you move users from on-premises Active Directory to cloud accounts in Office 365. These errors show up as daily alerts or failed sync messages. Some common sync errors are:

• If accounts are made in Office 365 and on-premises AD separately, they may not match. This causes problems.

• If someone changes their username, like after a name change, it can cause mismatches if both systems are not updated.

• If two accounts have the same email address or user principal name (UPN), syncing can fail.

• If a cloud user with the same UPN has admin rights, this can block syncing.

• If you try to delete or update cloud-only users using sync tools, you might get access errors.

Tip: Make sure usernames and email addresses match in both systems. This stops most sync errors.

Attribute Problems

Attribute problems can stop users from syncing or cause mismatches. These issues often involve SourceAnchor, UPN, or proxy addresses. Here are some ways to help:

1. Check that AD Connect uses mS-DS-ConsistencyGuid for SourceAnchor.

2. Make sure UPN and proxy addresses are the same in both on-premises AD and Office 365.

3. Get and change the ImmutableID if you need to fix problems.

4. Pause the sync scheduler instead of turning off DirSync. This helps avoid long delays.

5. Move problem accounts to a non-synced OU, fix their attributes, then move them back and resync.

6. Watch out for more than one AD Connect server. This can make attribute values change without warning.

7. Turn on SynchronizeUpnForManagedUsers to let UPNs update.

Note: Microsoft guides and tools can help you find hidden sync problems. Firewalls or network issues can also cause trouble.

Login and Password Concerns

Login and password problems can happen after users are moved to cloud accounts. These issues often come from UPNs that do not match, incomplete syncs, or missing attributes. Here is what usually fixes these problems:

1. Change the UPN suffix in on-premises AD so it matches the domain in Office 365.

2. Make sure the main email address is the same as the UPN.

3. Set up AD sync the right way so password sync works.

4. If login does not work, remove the ImmutableID, delete the user in Azure AD, restore from the recycle bin, and sync again.

5. For new users, setting up AD Connect the right way stops most login problems.

For more help, check Microsoft 365 service health, try other browsers or admin accounts, and look at Microsoft forums or support articles. Community forums and PowerShell tools can also help with tough problems.

After Conversion

Password Management

Password management works differently after users move to cloud accounts in Office 365. Users now follow password rules set in the cloud. They use cloud tools to reset their passwords. If password writeback is not turned on, users cannot change their passwords in Office 365. This can make things confusing for them. Administrators must check the 'userCannotChangePassword' setting. They should fix it if users cannot update their passwords. If password writeback is on, changing a password in Office 365 also updates it in on-premises AD. This keeps passwords the same in both places. Users made in Azure AD do not have these problems. But they cannot use on-premises resources anymore. Password prompts and reset steps may look different for cloud-only and hybrid users. Administrators need to check these settings to help users switch smoothly.

User Administration Changes

User administration now uses cloud tools instead of local ones. Administrators use Microsoft 365 Admin Center or PowerShell modules to manage accounts. They can reset passwords, give out licenses, and change user details in the cloud. Some account details, like SamAccountName, may still show old values from on-premises AD. This can confuse users because Azure AD sometimes shows the old domain\username style. Microsoft knows about this issue, but it cannot be fixed with current APIs. Users may have problems with Outlook, like getting asked for passwords many times or needing to make new profiles. These issues happen because old settings do not update by themselves after moving to the cloud.

Security Considerations

Security rules change after users move to cloud accounts. Organizations should turn on Conditional Access policies. These rules control sign-ins by location, device, or group. Multifactor authentication is very important, especially for users signing in from new places. Microsoft Entra ID Protection helps find risky sign-ins and strange activity. Administrators should use reports to watch security events and check what users do. Following rules like HIPAA depends on the way users sign in. Some standards need Pass-Through Authentication or Federated Authentication. Organizations should also look at endpoint management, turn on password writeback with care, and use extra security features in premium Microsoft plans.

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To Convert On-Prem AD Users, groups should do these steps:

1. Take the user out of sync by moving them to a non-synced OU or by setting a special attribute.

2. Start a sync and check in Microsoft Entra ID that the user is gone.

3. Bring the user back and remove the OnPremisesImmutableID attribute.

4. Make sure the account is now only in the cloud.

Good planning and testing stop domain and sign-in problems. Teams need to check UPNs, turn on security, and try with a small group first.

Microsoft Learn and forums give official help. For hard cases, third-party tools and guides help with tricky moves.

FAQ

What happens to user data during the conversion?

User data in Office 365 stays safe when you move accounts. The process does not remove emails, files, or calendar events. Users can still get to their data after switching to cloud accounts.

What tools help with converting AD users to cloud accounts?

Admins use Azure AD Connect, PowerShell modules, and Microsoft 365 Admin Center. Some groups pick other migration tools for big or tricky moves. These tools help make the process automatic and easy to track.

What changes for users after moving to cloud accounts?

Users change passwords and account settings in the cloud. They use Microsoft 365 tools instead of local servers. Sign-in steps may be different, and users might see new security checks like multi-factor authentication.

What problems can occur during the conversion?

Sync errors, attribute mismatches, and login issues can happen. These problems often come from usernames that match or missing account info. Testing and planning help stop most problems.

What should admins check after conversion?

Admins should make sure users can sign in and reach their data. They need to look at password settings, security rules, and account info. Watching for problems helps fix things fast.