HELP Exchange Online Plan 1 and Active Directory Integration

Hello

We are entertaining on moving our Internal Exchange 2007 setup to Microsoft's Exchange Online PLAN 1.  We are trying to get a couple of questions figured out and can't seem to get clear cut answers and were wondering if we could get some help

1.  Exchange Online Plan 1 : Does this support AD integration/sync? I know Office 365 plan does, but cannot get a clear answer if the Exchange Online Plan 1 does. We want the AD integration as we do not want users to have to remember another set of passwords for exchange online.  I know with 365 you use ADFS to make the sync, and I have also seen some people refer to AZURE AD services ( but not sure what this is )

2.  For an organization of our size ( about 250 mailboxes ) is this the right route to go, or should we be putting our own exchange 2013 box in to replace our 2007 box? We currently have two DB store in 2007. One is 275GB  one is about 60GB.

3.  Can Exchange 2007 in its current setup like we have be moved to a virtual machine to at least get it off the ancient hardware it is on now? Does 2007 even run well in a VM?

We are just trying to figure out the best solution for us here. Thanks for the time
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TechEagleAsked:
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Edward ChoManaging Exciting Technology ThingsCommented:
1.  The E1 plan is just a plan of O365 so it supports ADFS or Azure Directory Sync.  Azure is the easiest to use and setup (it syncs the AD creds at intervals). ADFS reaches out to your on-prem AD to test credentials (and is more complex to setup and maintain).

2.  In my opinion, it depends on your users.  My users prefer a seamless experience (didn't want to type in a password again after logging into their Windows workstation) so we stuck with on-prem.  O365 makes things easier to manage though and you don't have to deal with maintaining a server (for the most part).  

3.  You should be able to migrate to a VM (assuming you have SP1): http://blogs.technet.com/b/ucedsg/archive/2008/11/12/exchange-server-2007-sp1-now-supported-on-vmware.aspx
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