Azure AD, B2B, B2C Puzzled Out – What Makes The Difference?

Looking at questions on the Internet (on sites like Quora or StackOverflow), I see a growing number of people confused by Azure Active Directory acronyms. We have Azure AD, Azure AD B2B, Azure AD B2C… yeah, you can get lost. So, it’s time to clear things up a bit! Here is your quick guide that will help you to find your way in this maze.

We will keep it up to date in case any other “three characters” will pop-up, so save the link for the future.

Here’s our main question: What is the difference between just Azure AD, B2B, and its B2C? Are these different versions?

Azure AD

Azure Active Directory (in short Azure AD) is a cloud identity provider service or Identity as a Service (IdaaS) provided by Microsoft. Its primary purpose is to provide authentication and authorization for applications in the cloud (SaaS apps).

One of the key applications relying on Azure AD right now is Microsoft’s own Office 365 or Azure itself. In my previous blog post, you’ll find the relationship between Azure and Azure AD described in detail.

Who will use it?

Azure AD’s main purpose is supporting business organizations with extending their identity reach to the cloud and SaaS applications. On top of this, there are tons of enhancements and services provided, such as conditional access, identity protection, application publishing, access to pre-configured applications and so on.

Developers can build applications and secure them with Azure AD. In this case, an application can be developed for a single organization (single-tenant) or as a general application (multi-tenant) accessible by any company using Azure AD. Example? Our time tracking application.

In short – Azure AD is meant for businesses to allow their users to work with cloud applications. You have your corporate users there, logging on with your domain name, and it is dedicated to your organization.

You can also create users on-premises and synchronize them with Azure AD (read here for more details) or create them in the cloud directly (we have covered it in another post).

The key scenario: you set up synchronization and SSO from your current AD and your users can log on to SaaS applications. Done.

Simple, huh?

azure ad

Access structure: Azure Active Directory

Azure AD B2B

Now for Azure AD B2B (which of course stands for Business-to-Business). Is it a different version of Azure AD? No! It’s only one of its service features. It allows one organization to invite members from other organizations to share application access.

A simple scenario here at Predica, we use our Grandler app (for skills management). We start to co-operate with your business, and we want your people to also benefit from it and start assessing our and their own skills.

We can use Azure AD B2B feature to invite your users to Grandler based on our Azure AD. You don’t have to deploy it on your Azure AD. You don’t have to configure it. We are just sharing this with you for collaboration.

What are the benefits here?

Cross-organization collaboration is a hot topic and at the same time not so easy to roll out. When you collaborate with an external party there are some things to be considered:

  • Is our security policy matching yours?
  • Do we have to create accounts for your users?
  • If we give accounts to your users, who will disable them if needed? And who will take care of those pesky password resets?

Azure AD B2B aims to address this problem. When you invite a user to your application, they will get access using their Azure AD account. No need to create an account for them. No need for a new password. They sign on to your app with their credentials.

Hint: As stated earlier, Azure is controlled by Azure AD. If you want to grant access to your Azure instance for an external consultant, don’t use a Microsoft Account for that. Invite them with Azure B2B if they have an account in this service.

On the other hand, you are still in control of your application. You decide if it requires multi-factor authentication. You choose who has access.

Azure AD B2B provides API around it so you can build your onboarding process and send invitations to apps. Or you can use the default one in the service.

The key scenario: An organization is using applications based on Azure AD and wants to collaborate in them with another business. Azure AD B2B allows working together by granting access to these apps to users from another Azure AD tenant.

azure ad b2b

Access structure: Azure Active Directory B2B

Azure AD B2C

Time for the last one my favorite, which deserves a separate write-up (and it will get one)  Azure AD B2C, Business-to-Consumer.

It is a separate service from Azure AD. Built on the same technology, but still… for different purposes.

The main difference it is not to be used by single organization users. It’s built to allow anyone to sign up as a user in a service with their email or social media provider like Facebook, Google or LinkedIn.

You don’t need on-premises AD here since you’re not creating a synchronization process.

The purpose of Azure AD B2C is to allow organizations to build a cloud identity directory for their customers.

To learn some Azure AD B2C tricks and tips, I encourage you to read this excellent posts by Predica’s expert Daniel Krzyczkowski:

Example scenario

Let’s imagine your business wants to build a website for your clients might that be a shopping site, a customer-facing CRM app or a mobile directory of your products. You want to have it online, as a mobile application, and there might be other projects in the future.

Usually, in that case, organizations are building some solutions to handle user identities in the app. Database with users, login process, sign-up process, password reset… OMG how we will store passwords?!

Then someone says Hey, are we going to support Facebook login? We have to do this.

Azure AD B2C does all of this for you. It is an identity repository in the cloud that allows your users to sign up for your applications with an email address and password (no restrictions on the email domain) or social media logins. The service itself handles all the processes like sign-up, sign-in, password reset and so on. You don’t have to worry about it.

If you establish it once and your customer is signed up, and later you spin off a new application it is all there. They don’t have to sign up again. They can use their existing account for your applications.

The key scenario: Consumer-facing applications and websites. A business wants to maintain a relationship with customers online their Azure AD B2C handles the identity and access part. Multiple applications can use the same directory to provide the client with SSO experience in your applications.

Azure Active Directory B2C

Access structure: Azure Active Directory B2C

And that’s it.

There are lots of technical details about these services. We have APIs, tenants, service features, policies and other things. There is also a licensing model be sure about that 🙂 Check it here for Azure AD and here for Azure AD B2C.


To sum up, what you need to know is:

  • Azure AD is an identity as a service provider aimed at organization users to provide and control access to cloud resources
  • Azure AD B2B is not a separate service but a feature in Azure AD. It allows cross-organization collaboration in applications from an identity standpoint.
  • Azure AD B2C is an independent service for building a consumer application identity repository. If you need a service to handle email or Facebook login it is there for you.

That’s all for now. I hope that you’re now finding it nice and easy. For more technical details on these services make sure to follow our blog posts here, our videos and Facebook profile. There’s more to come!

Key takeaways
  1. Azure AD – identity as a service provider for organization users, providing and controlling access to cloud resources
  2. Azure AD B2B – a feature in Azure AD which allows cross-organization collaboration through authentication
  3. Azure AD B2C – an independent service for building consumer application identity repository


See also

A Summary Of 2019: Predica Is 10! But What’s Next?


Churn & Score Analysis in Action: Building Loyalty Measurement System


5 Steps to Master Access Governance in Your Organization


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