Deciding whether Office 365 is the right option for your enterprise means answering a number of important questions. Admins should be ready to answer questions about domain names and Active Directory, as well as how Office 365 will identify each end user or group.
The Office 365 administrative console provides three general options for establishing user accounts: Active Directory synchronization, identity federation and multi-factor identification.
Read more at – Three ways to manage user accounts in Office 365