Azure AD DS is a managed service that provides domain services such as domain join, group policy support, and LDAP and Kerberos-based authentication for cloud-based applications. It allows you to use your Azure AD directory as a managed domain without the need to set up, maintain, and secure an on-premises domain controller. This can help reduce the administrative effort required to maintain the infrastructure and ensure that the legacy applications continue to function as expected.

Other identity services, such as Azure Active Directory (Azure AD) or Azure Active Directory (Azure AD) B2C, may not be as suitable for this scenario because they do not provide the same level of support for legacy applications that rely on LDAP and Kerberos-based authentication. Similarly, using an on-premises Active Directory Domain Services (AD DS) instance would require maintaining additional infrastructure and may not be as cost-effective or efficient as using a managed service like Azure AD DS.