Local Domain Controller or Azure?

We run a small IT company.
For customers with between 5-25 users, we've always installed the Essentials version of Windows (e.g. WIndows Server 2012 R2 Essentials). We've always found this a good solution for smaller businesses.
I'm curious to understand how people are now designing solutions for their clients with the rise of Azure - are people still installing on-premise domain controllers? Or are they using Azure instead?
I've read that nothing is Azure can really replace a domain controller?
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Michal ZiembaIT AdministratorCommented:
It all depends of:
  • budget - some companies (even small) do not want to invest in on-premise solutions and have enough budget to use Azure.
  • fast and reliable Internet connection with a possibility to establish a VPN to Azure or even better ExpressRoute to Azure - well, without this forget about Azure
  • a topology of your customer facilities - are users work from one location within a local network or are they working remotely
  • available of the local IT/technical support to maintain the on-premise server - without that kind of person you need to support the installation on the customer's site (sometimes remote administration is not enough to replace a faulty disk in the array). If you don't like it you might consider Azure
  • available of the local infrastructure (room with AC, backup of power and data, etc.). Having solution in Azure you don't need to worry about that
Cliff GaliherCommented:
I've designed cloud-only business solutions. I've designed on-premises (aka domain controller solutions). I've designed hybrid solutions.  All have their place.

Can Azure AD replace a domain controller?  It really depends on the meaning of the question.  Azure AD is *not* a drop-in replacement for ADDS.  But if the business is "cloud-first" then it may not need a drop-in replacement.  It needs a re-thinking of how they do business, and Azure AD alone may be a good fit.  

A car was not a drop-in replacement for a horse and carriage.  And getting a car meant thinking about things like "where to get gas."  And electric cars...which is arguably a smaller change, still has that challenge of charging on longer road trips.  But each was a replacement for what came before, and eventually did (or will) fully phase out the old tech.  I conjecture Azure AD will eventually do the same, despite its massively different approach.

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carrgater31Author Commented:
Thanks all.
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