Microsoft Defender for Identity Architecture

According to Microsoft’s 2024 Cybersecurity Threat Intelligence report, identity-based attacks account for more than 80% of security breaches, especially in hybrid environments where on-premises Active Directory (AD) remains deeply embedded. This is exactly where Microsoft Defender for Identity becomes indispensable — and understanding the Microsoft Defender for Identity architecture is key for security teams who want full visibility into identity threats.

Defender for Identity (formerly Azure Advanced Threat Protection) is a cloud-based security solution designed to detect compromised credentials, lateral movement, suspicious activities, and advanced identity attacks across hybrid AD infrastructures.

This guide breaks down the architecture, core components, and how everything works together to safeguard enterprise identities.

*What Is Microsoft Defender for Identity? *

Microsoft Defender for Identity is a cloud-delivered identity security solution that monitors:

• On-prem Active Directory
• AD Federation Services (AD FS)
• Domain controllers
• User behavior
• Authentication patterns
• Lateral movement paths

It detects threats such as:

• Pass-the-Hash attacks
• Pass-the-Ticket attacks
• Golden Ticket / Silver Ticket attacks
• Kerberoasting
• Reconnaissance and privilege escalation
• Suspicious logins and domain persistence

To achieve this level of insight, the Microsoft Defender for Identity architecture uses a layered, hybrid model that combines on-prem sensors with Microsoft’s cloud analytics engine.

*Microsoft Defender for Identity Architecture: Key Components *

Below is a clear breakdown of the main architectural components that work together to deliver threat detection and identity intelligence.

**

1. Defender for Identity Sensors (On-Premises Agents) **

Sensors are lightweight agents installed directly on:

Domain Controllers

AD FS Servers (optional)

Azure AD Connect Servers (optional)

*What sensors do: *

• Collect authentication logs
• Monitor LDAP queries
• Track NTLM traffic
• Inspect Kerberos activity
• Detect lateral movement patterns
• Analyze user behavior and permissions

Sensors send telemetry to Defender for Identity’s cloud service in real time.

Why it matters:

Sensors provide the raw identity signals needed for high-fidelity detection without requiring port mirroring or additional infrastructure.

*2. Cloud-Based Defender for Identity Workspace *

All identity data collected by sensors is aggregated, normalized, and analyzed in Microsoft’s cloud workspace.

This cloud layer handles:

• Machine learning-based threat detection
• Behavioral analytics
• Anomaly identification
• Correlation across multiple sensor inputs
• Integration with Microsoft 365 Defender and Sentinel

*Why it matters: *

The cloud analytics engine enhances detection accuracy by comparing enterprise identity data with global threat intelligence.

*3. Microsoft 365 Defender Integration Layer *

Defender for Identity is tightly integrated with the broader Microsoft 365 Defender ecosystem, including:

• Defender for Endpoint
• Defender for Cloud Apps
• Defender for Office 365
• Identity Protection (Azure AD)

*Benefits of this integration: *

• Unified incident correlation
• End-to-end attack timeline
• Cross-domain visibility (endpoint → identity → cloud apps)
• Faster investigation and response

*Why it matters: *

Identity-based attacks rarely happen in isolation. Integration provides an “identity lens” across the entire kill chain.

*4. Cloud Services & Log Pipelines (Azure Infrastructure) *

The entire Microsoft Defender for Identity architecture leverages Azure services for secure processing and data flow.

*Includes: *

Azure Monitor for log aggregation

Azure AD for identity authentication

Azure Storage for encrypted data retention

Azure Key Vault for key and certificate security

*Why it matters: *

Azure services ensure the platform is scalable, reliable, and fortified with enterprise-grade security.

*5. API Layer & SIEM/SOAR Integrations *

Defender for Identity offers robust integration with:

*SIEM Tools: *

Microsoft Sentinel

Splunk

QRadar

*SOAR Tools: *

Sentinel automation rules

Logic Apps

Custom playbooks

*Why it matters: *

Security teams can automate investigation, pivot across logs, and orchestrate response actions seamlessly.

How the Architecture Works: End-to-End Flow

*Step 1 — Data Collection *

Sensors capture identity signals from domain controllers, including authentication logs, traffic patterns, and event data.

Step 2 — Secure Transmission

Data is encrypted and securely transmitted to the Defender for Identity cloud service.

*Step 3 — Analytics & Correlation *

Cloud engines use AI, behavioral analytics, and threat intelligence to detect anomalies.

*Step 4 — Alert Generation *

High-confidence alerts are generated for suspicious activity or compromised identities.

*Step 5 — Integration & Response *

Alerts flow into Microsoft 365 Defender and optional SIEM/SOAR systems for incident response.

*Architectural Benefits for Security Teams *

Understanding the Microsoft Defender for Identity architecture helps teams maximize protection and efficiency.

*✔ Real-Time Threat Detection *

Sensors process activity instantly without waiting for logs to sync.

*✔ Identity-Centric Attack Visibility *

Detects sophisticated AD attacks that traditional tools miss.

*✔ Hybrid Protection *

Supports both on-prem AD and Azure AD for a unified identity defense.

*✔ Minimal Infrastructure Overhead *

No need for port mirroring or additional servers.

*✔ Built-In Zero Trust Alignment *

Strong identity monitoring forms a core pillar of Zero Trust security.

✔ *Correlated Investigation *

Links alerts to endpoint, cloud, and email activity through Microsoft 365 Defender.

Ideal Use Cases for Defender for Identity

• Hybrid AD environments
• Organizations with privileged identity requirements
• Enterprises using Microsoft 365 E5 security stack
• SOC teams seeking deeper identity visibility
• Environments facing credential theft or lateral movement attempts

*Final Thoughts *

The Microsoft Defender for Identity architecture is purpose-built to secure hybrid identity environments by combining lightweight on-prem sensors, cloud analytics, and deep integration with Microsoft’s security ecosystem. For security teams, understanding this architecture is essential to implementing a resilient defense against today’s identity-centric attacks.