Before we get into understanding of Azure Active Directory (AAD), let us understand what is an Identity.
What is an identity?
An identity is an Object mostly userid with a password that is used for authentication / authorization.
What is Azure Active Directory?
Azure Active Directory (Azure AD) is a cloud-based identity and access management service. This service helps your
employees access external resources, such as Microsoft 365, the Azure portal, and thousands of other SaaS applications.
Why do we need identities on Azure i.e., AAD?
Azure AD or Identies on azure are needed for
1)login to portal==>>portal.azure.com
2)Get access to azure resources (RBAC)
3)Get access to SaaS (Software as a Service) Applications.