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Everything on hosted 365 - What do MS recommend WRT AD control?

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Moving many of our small clients (6 to 20 users) to 365 - email and sharepoint. We end up with a server which is doing nothing except being a DHCP server and an AD server. Seems a bit of a waste, having moved everything on line and got all the advantages of cloud based robustness to have to maintain a svr just as a logon authentication device.
Anyone got a sensible thought on best practice here?

Ta

James


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