Azure Active Directory vs Okta




Updated on March 15, 2021

As more IT organizations shift their identity management infrastructure to the cloud, the competition for SaaS identity management solutions is intensifying. In the web application single sign-on (SSO) landscape, it is often Azure® Active Directory® versus Okta®. In fact, Microsoft® and Okta have a bit of history with each other, with strong words and accusations going back and forth over the years. Interestingly, while both compete in the Identity-as-a-Service (IDaaS) or web app SSO market, they also both heavily rely on Microsoft Active Directory to function at a high-level.

While they may be competitors where they overlap in web app SSO, they diverge down different paths beyond this similarity. After the head-to-head competition in web application single sign-on, they are separate tools that serve different needs for IT administrators. Today, we will compare Azure AD to Okta and explore where their competition lies. 

Azure AD: Think Active Directory Extension, Not Replacement

Many IT organizations are initially confused by their similar names and believe that Azure Active Directory (Azure AD or AAD) is the cloud-based directory services replacement for Active Directory, but this is not the case. Active Directory is still hosted on-premises, while Azure AD is designed to be the cloud-based counterpart for Azure infrastructure in the cloud and web applications. This is demonstrated by the fact that Azure AD doesn’t have the capability out of the box to authenticate users to on-prem or remote systems including Windows® (sans Windows 10), Mac® and Linux® machines, cloud infrastructure hosted at AWS® or GCP (Google Cloud Platform), on-prem network resources (VPNs, WiFi), on-prem file servers, and generally anything else that operates outside of the Microsoft Azure ecosystem (outside of web apps).

The primary role for Azure AD is to be the user authentication infrastructure for Azure, Microsoft’s cloud computing service that competes with AWS and GCP, Microsoft 365™, and a web single sign-on solution. It is highly tailored for Windows servers and Windows-based infrastructures hosted in Azure, with Microsoft’s goal to shift their customer’s infrastructure from on-prem into their data center (Azure). This means that, while Azure Active Directory may be a significant stride towards a cloud-based user management system, it still ties organizations to Microsoft and even Microsoft’s own reference architecture requires AD on-prem (and the bridge technology Azure AD Connect) for AAD to manage on-prem resources and non-Windows 10 systems. As a result, most organizations use an on-prem Active Directory instance to manage their on-prem infrastructure, while still managing an additional identity solution (Azure AD) for their Azure cloud infrastructure. These two connect together using yet another solution from Microsoft called Azure AD Connect.

Don’t Forget About Okta

Falling under the broad identity and access management (IAM) realm and more specifically IDaaS, web app SSO solutions are at the forefront of IT admins’ minds with the migration to the cloud. Okta, which went public in 2017, was one of the first cloud-based web application SSO solutions on the market. Web app SSO solutions, commonly referred to as first generation Identity-as-a-Service (IDaaS) platforms, are popular due to the wide use of web applications such as Slack, GitHub, Salesforce, and thousands of others.

While Okta is a leading web application SSO platform, according to Okta it is paired with a core on-prem identity provider, which historically has been Active Directory, over 95% of the time. While this multi-product approach may work, it certainly creates challenges, including high cost. It also creates a strange dynamic for Okta where they compete with Microsoft with respect to AAD, yet work together in IT organizations where Okta and Active Directory are present.

Where Solutions Intersect 

Now that we understand that Azure AD provides user management for Azure, M365, and SSO to select web apps and Okta is primarily a web app SSO provider, we can investigate where these two point solutions collide.

The overlap between the two is due to the fact that Azure AD, unlike Active Directory, has built in web application SSO capabilities. In fact, Azure Active Directory rivals strong web app SSO providers, like Okta, in the marketplace and has caused Google to take them on with their own SSO solution, Google Cloud Identity management solution as well (not to mention that Amazon has recently gotten into the web app SSO game, too). Of course, the reasons behind the interest from Microsoft, Google, and Amazon isn’t to dominate the SSO market, but rather to hold organizations captive with their identities and ultimately use that leverage to sell them other services.

Okta, of course, primarily focuses on web app SSO, so it makes sense that IT admins compare Azure AD and Okta, although Azure AD’s services extend beyond SSO. As many IT admins realize quickly, Azure AD and Okta are only pieces of the overall identity management puzzle that they are trying to solve. For example, how do organizations control access to macOS and Linux systems, on-prem applications, on-prem VPN and WiFi networks, and more with solely AAD or Okta as their identity management platform?

With the desire to move to cloud identity management, the place where IT admins need to start is finding a replacement for Active Directory, or a core-identity provider in the cloud. The identity provider serves as the core platform from which IT organizations build out their IAM approach.

Once the foundation is set with a cloud directory, it can make sense to consider a web app SSO solution, or depending upon the organization’s needs, it may not be necessary.

A Modern Approach With a Cloud Directory Platform

We reinvented the approach to the cloud directory service with the JumpCloud Directory Platform. This cloud identity management platform integrates web app SSO with securely managing users’ access to systems, web applications, WiFi and VPN networks, legacy applications, as well as cloud or on-prem files—all using one cloud directory. The result is that you don’t need to consider add-on solutions such as Azure AD or Okta (or even system management solutions / MDMs such as Intune, as well). JumpCloud is an all-in-one access control and device management platform from the cloud, but for virtually any type of resource.

To learn more about Azure AD versus Okta and the role that SSO plays in the overall IAM strategy for an organization, drop us a note. You can also schedule a demo, and sign up for a free account to learn about how JumpCloud replaces web app SSO solutions and Active Directory altogether. Your first 10 users and 10 devices are free. For questions as you proceed, hit our in-app chat 24×7 within the first 10 days and our Customer Success Engineers will help.


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