Why Aren’t Startups Using Active Directory®?

Written by Rajat Bhargava on August 16, 2019

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Why aren’t startups using Active Directory® (AD)? Well, there’s been a sea of change in the IT landscape over the last decade or so. The rise of corporate Gmail (called Google Apps for Work or G Suite) during that period completely changed the game for Microsoft® back-office IT solutions. 

It was proof that cloud-based services could overtake on-premise stalwarts like Exchange and Outlook. Now, the same can be said for the legacy AD platform as next generation cloud directory services alternatives have emerged. Let’s head back in time to the early 2000s and take a closer look. 

Back in Microsoft’s Hey-day… 

Startups didn’t have the cloud, but they did have commodity hardware. So, the way they started was to leverage Microsoft’s back-office suite, including the on-prem directory services platform, Active Directory, the Domain Controller, and Exchange. 

Very likely, these organizations were also using Windows® servers for file and print sharing and their employees were outfitted with Microsoft desktops or laptops. The engineers in the organization may have had Linux® machines, too, and they would often vacillate back and forth between managing and working against the two operating systems.

Microsoft for Startups?

Even though Microsoft would try to be a cost-effective solution for startups, it was expensive to get off the ground with just the basics. Then, there’s the fact that you needed to hire a Microsoft expert as one of the first few employees because of the specialized skills (which developers often didn’t have) needed to set up and maintain the Microsoft suite. 

Essentially, costs would include the dedicated hardware, software, and personnel required. Additionally, one hidden cost was data center space. Back in the early 2000s, most companies still had their own data centers or server closets. There would nearly always be additional costs to factor in to manage the Microsoft back-office infrastructure.

Google Changes the Game

Fast-forward to late in the 2000s and earlier in this decade, and Google Apps for Work started to kick in as a go-to solution for companies just starting out. Google initially offered companies 25 users free and that was enticing. There was no need to set up and run Exchange. 

In fact, Google made it so easy to get going that even relatively savvy business people could get email going for their companies, thereby eliminating any ‘Microsoft expertise’ in the IT ranks. As we all know, email at this stage was as, or even more, important than having a phone number.

Complexity Builds

So startups had email, but how would they create a domain or manage their PCs? In the early phases of Google Apps, growing startups may have complemented it with Active Directory—but another funny thing happened. Startup employees were moving away from Microsoft Windows too. 

They started using Apple® devices such as MacBooks and iMacs. As natural innovators, startups were aggressive about using new technology and Macs and iPhones were a part of that. Unfortunately, hooking them up to Active Directory wasn’t very easy, and managing them via Active Directory was next to impossible.

Reimagining Traditional Microsoft Solutions

Startup admins were in a quandary. Google Apps, which would become G Suite, was an easy check off for email—but how would they manage and control their other devices? And, was it important enough to warrant the cost and expense of bringing in AD

As you can imagine, most admins punted. They believed it was not worth the time, effort, and cost to bring in Active Directory. They would go naked and unmanaged with no domain controller or user and device management. 

At a stage when cash is critical, the savings were tremendous. Startups didn’t need to procure hardware, license software from Microsoft, and perhaps most importantly, deal with the on-going maintenance in house. They just used Google Apps and they were good.

The Need for Centralized Identity Management

Here’s the rub, though. As the startup succeeds, they end up having to rethink this decision. A directory service is critical for two major things: authenticating and authorizing users to IT resources and managing devices

Both of these things end up being critical for security and efficiency over the long-term. As a startup grows, they will need to hire a dedicated IT admin for desktop support, management of the Internet connection / VPN, and various on-prem and cloud-based services. 

Consequently, it ends up making sense to have a tool that helps control and manage users and devices to enable IT admins. As startups in the cloud era reach this stage, though, they aren’t interested in an on-prem solution like Active Directory or OpenLDAP. Rather, they’re looking for a cloud-based directory services solution that cleanly matches up with their existing cloud infrastructure, for example, G Suite or even Microsoft Office 365™.

The Solution for Startups Using Active Directory

That’s where JumpCloud® Directory-as-a-Service® comes in. If you’re a startup and are thinking about how you could leverage a cloud-based directory that is complementary to G Suite or Office 365, drop us a line. We’d be happy to chat with you.

Rajat Bhargava

Rajat Bhargava is an entrepreneur, investor, author, and CEO and co-founder of JumpCloud. An MIT graduate with over two decades of high-tech experience, Rajat is a ten-time entrepreneur with six exits including two IPOs and four trade sales.

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