Active Directory Federation Services (ADFS) in Windows Server 2012 allows organizations to share identity information with partners or cloud service providers. ADFS includes support for single-sign on, centralized federated identity management through the ADFS management console, support for Active Directory Rights Management and deployment control through Group Policy.
One of the biggest drawbacks of ADFS is that it can be quite difficult and time consuming to deploy, but for smaller businesses that would like to integrate Active Directory and Office365, Windows Server Essentials 2012 has a handy add-in that allows provisioning of Office365 users from the local server dashboard, to assign an Office365 license, and synchronize Windows passwords to the cloud.
To enable integration for Office365 in Windows Server Essentials 2012:
Once the dashboard has restarted, notice that as well as some information about your Office365 account, you can now connect Windows Server Essentials 2012 accounts to corresponding Office365 users. There’s also a feature that allows you to import multiple accounts from the Office365 website. Once a Windows Server Essentials 2012 account is linked to an Office365 user, access to Exchange, SharePoint, and other Office365 features requires users to enter their Windows password. Remember that once integration is configured, you should manage users from the Windows Server Essentials dashboard. Resetting user passwords in Office365 will break password synchronization.