There are many benefits to leveraging your AD environment. For one, AD is most likely mature and you have already configured features such as Group Policy Objects (GPOs) that define password complexity requirements. Furthermore, from a day-to-day management standpoint, you and your administrators are probably using tools such as the Active Directory User and Computer (ADUC) management console. In this scenario, if you introduce cloud identities with Office 365, you would have to maintain a second set of user accounts in Office 365, thereby doubling your workload.
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