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But is Azure AD free? When I checked it out, it looked like you have to pay for using it?

Azure AD is 6$/mo per Premium P1 user as far as I know, but I think yrro is talking about Azure AD B2C and that's free up until something like 200,000 monthly active users (not affiliated with Azure but their calculator is my start page)

AAD without all the security features (p1/p2) is free, with some limitations you'll quickly hit if using as your main directory. https://jumpcloud.com/blog/understanding-aad-pricing-free is a decent overview

* 50,000 monthly active users

I think there's a very limited edition available for free.

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