Office 365 allows for different identity management options, each of which has its merits. Let's look at one option -- Active Directory Federation Services -- to get a better understanding of how it ...
I've got a customer who has 40 users on Office 365 E1, recently transitioned from BPOS. Right now they don't have an on-premises server at all; therefore, no AD - just workgroup with a QNAP NAS.