Both Azure Active Directory (Azure AD) and on-premises Active Directory (Active Directory Domain Services or AD DS) are systems that store directory data and manage communication between users and resources, including user logon processes, authentication, and directory searches.+
AD DS is a server role on Windows Server, which means that it can be deployed on physical or virtual machines. It has a hierarchical structure based on X.500. It uses DNS for locating objects, can be interacted with using LDAP, and it primarily uses Kerberos for authentication. Active Directory enables organizational units (OUs) and Group Policy Objects (GPOs) in addition to joining machines to the domain, and trusts are created between domains.
Azure AD is a multi-customer public directory service, which means that within Azure AD you can create a tenant for your cloud servers and applications such as Office 365. Users and groups are created in a flat structure without OUs or GPOs. Authentication is performed through protocols such as SAML, WS-Federation, and OAuth. It's possible to query Azure AD, but instead of using LDAP you must use a REST API called AD Graph API. These all work over HTTP and HTTPS
More Reading: https://docs.microsoft.com/en-us/azure/active-directory/active-directory-whatis
More Reading: https://docs.microsoft.com/en-us/azure/active-directory/active-directory-whatis
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