Merger and Acquisition Challenges with Entra ID

• Organizations that regularly acquire other organizations must consider cross-organizational Entra ID integration.
• Entra Cloud Sync technology lets small acquirees remain independent while merging identity information into the parent organization’s tenancy of Entra ID.

The architecture of Entra ID (previously Azure Active Directory [AAD]) can create operational and licensing challenges for organizations during the merger and acquisition (M&A) process. Entra Cloud Sync, which is expected to gradually replace the earlier synchronization tool, Entra Connect Sync, enables large organizations to integrate small acquisitions into their larger Entra ID tenancy (isolated instance of Entra ID). There are many limitations to the approach, but these are likely to improve in future versions.

This report assumes that an acquiree organization and its acquirer have each implemented Entra ID (necessary for Microsoft 365/Office 365 services), and each has Active Directory (AD) on-premises with synchronization between AD and Entra ID.