Forum Discussion
Tips to use Azure AD Connect with online Exchange management
If all you want is password synchronization you can look at deploying the Windows Server Essentials role (not the server edition, just the server role) and connect on-prem AD accounts with Office 365 accounts. This will sync password changes to the cloud, but isn't the full directory sync that you get with Azure AD Connect. This works for small customers, which I imagine are the ones most feeling the pain of having to keep an on-prem Exchange server.
If you want the full directory sync experience, for now you need an on-prem Exchange server. Microsoft made announcements at Ignite 2016 and again at Ignite 2017 with their plans to create a "hybrid connector" that will do away with the on-prem Exchange server requirement, but that is still probably at least a year away (perhaps we'll get the good news at Ignite 2018).
If all you want is password synchronization you can look at deploying the Windows Server Essentials role (not the server edition, just the server role) and connect on-prem AD accounts with Office 365 accounts. This will sync password changes to the cloud, but isn't the full directory sync that you get with Azure AD Connect. This works for small customers, which I imagine are the ones most feeling the pain of having to keep an on-prem Exchange server.
If you want the full directory sync experience, for now you need an on-prem Exchange server. Microsoft made announcements at Ignite 2016 and again at Ignite 2017 with their plans to create a "hybrid connector" that will do away with the on-prem Exchange server requirement, but that is still probably at least a year away (perhaps we'll get the good news at Ignite 2018).
