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Deploying Azure AD

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I have a few questions about deploying Azure AD to a client.

1. We are looking to move a client to Azure AD. It is a mostly Windows 10 environment with 2 Windows 7 workstations though. There is currently an onsite Domain Controller with local AD. Is it possible to do a hybrid setup and have the Azure AD as the primary AD?

2. How does moving to Azure AD take our pre-existing GPO's in our environment

3. What are the licenses and costs the clients will need. They currently have Business Premium licenses.

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