Update - 4/2/18: Hybrid modern authentication for Outlook mobile with Exchange on-premises mailboxes is now generally available. For more information see the A new architecture for Exchange hybrid customers enables Outlook mobile and security.
Principal Program Manager
Office 365 Customer Experience
What's the intended approach for customers who do not want to have their data stored in the cloud - be that for compliance, preference or otherwise? The authentication piece is only half of it - I have customers who are "lukewarm" at best on cloud, and their parent company policies are unambiguous - data must not ever be stored in a datacentre outside of the customers' control regardless of what the provider claims about security and access control. They will certainly not permit any form of writeback or hybrid.
Yes, they realise this precludes certain technologies - but this seems to be enforcing "cloud only" (which is distinct from "cloud first") and means they cannot use the Microsoft apps and would potentially mean transitioning to other technologies that can be compliant with internal policy.
And before you ask - no, the parent company will not change its tune in the near future.
