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Azure MFA cloud vs server | Microsoft Docs
Choose the multi-factor authentication security solution that is right for you by asking, what am I trying to secure and where are my users located. Then choose cloud, MFA Server or AD FS.
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Choose the Azure Multi-Factor Authentication solution for you

Because there are several flavors of Azure Multi-Factor Authentication (MFA), we must answer a few questions to figure out which version is the proper one to use. Those questions are:

The following sections provide guidance on determining each of these answers.

What am I trying to secure?

To determine the correct two-step verification solution, first we must answer the question of what are you trying to secure with a second method of authentication. Is it an application that is in Azure? Or a remote access system? By determining what we are trying to secure, we can answer the question of where Multi-Factor Authentication needs to be enabled.

What are you trying to secure MFA in the cloud MFA Server
First-party Microsoft apps
SaaS apps in the app gallery
IIS applications published through Azure AD App Proxy
IIS applications not published through Azure AD App Proxy
Remote access such as VPN, RDG

Where are the users located

Next, looking at where our users are located helps to determine the correct solution to use, whether in the cloud or on-premises using the MFA Server.

User Location MFA in the cloud MFA Server
Azure Active Directory
Azure AD and on-premises AD using federation with AD FS
Azure AD and on-premises AD using DirSync, Azure AD Sync, Azure AD Connect - no password sync
Azure AD and on-premises AD using DirSync, Azure AD Sync, Azure AD Connect - with password sync
On-premises Active Directory

What features do I need?

The following table is a comparison of the features that are available with Multi-Factor Authentication in the cloud and with the Multi-Factor Authentication Server.

Feature MFA in the cloud MFA Server
Mobile app notification as a second factor
Mobile app verification code as a second factor
Phone call as second factor
One-way SMS as second factor
Two-way SMS as second factor
Hardware Tokens as second factor
App passwords for clients that don’t support MFA
Admin control over authentication methods
PIN mode
Fraud alert
MFA Reports
One-Time Bypass
Custom greetings for phone calls
Customizable caller ID for phone calls
Trusted IPs
Remember MFA for trusted devices
Conditional access
Cache

Now that we have determined whether to use cloud multi-factor authentication or the MFA Server on-premises, we can get started setting up and using Azure Multi-Factor Authentication. Select the icon that represents your scenario!

Cloud                          Proofup