What is Azure Active Directory?

Azure Active Directory (Azure AD or AAD) is Microsoft’s multi-tenant, cloud-based directory and identity management service that offers a subset of the services of Windows Server active directory but in the cloud. 

Azure AD can be integrated with an existing Windows Server Active Directory and should be if your company is using Office 365 or Azure services. 
If you are using Office 365 or Azure services, guess what?  You are already using Azure AD. 
Every Office 365 portal, Azure and Dynamics CRM tenant uses Azure AD tenant in the background.
While Azure Active Directory does not have all the services that are found in an onsite active directory domain, Microsoft is continuing to expand the capabilities of Azure AD.

How does Azure Active Directory and Active Directory coexist?

Azure Active Directory was initially intended for Microsoft’s and others cloud apps a prime example is Office 365.   Office 365 uses Azure Active Directory for identity management and tools such as Cloud System Manager can be used by site administrators to manage tenants, however having two different accounts for users would be hard to manage.  With this in mind Office 365 can and should be synchronized with your local onsite active directory.  With this integration with your on premise Active Directory it simplifies the identity management into a hybrid cloud environments. 

Azure AD Connect
The process is easy and only takes a few minutes, to download Azure AD Connect.

The Azure AD connect can also be manually started See Azure AD Connect manual sync instructions.