The cloud identity scenario is ideal for smaller organizations, including those that do not maintain an on-premise Active Directory. Each Lync Online user’s identity is maintained only in the cloud, resulting in a simple deployment and minimal management. However, if password-protected systems are maintained on-premise, users will need to manage several sets of credentials. An additional consideration is that cloud identity does not allow for two-factor authentication options. For these reasons, the cloud identity scenario is not likely to be used by organizations that use Active Directory.