You are talking about 2 different features here.
Staged Rollout allows you to selectively test groups of users with cloud authentication capabilities like Azure AD Multi-Factor Authentication (MFA), Conditional Access, Identity Protection for leaked credentials, Identity Governance, and others, before cutting over your domains.
Basically, staged rollout is a feature that is used to change the authentication authority. For example, if currently users are getting authenticated by on-preimses AD using any federated IDP's and now you want to change the authentication method Azure AD or you want to use pass-through authentication, then staged rollout is a feature that you can use to migrate the authentication in groups.
And changing the user status to cloud only is a feature which is used when you want to decommission AD connect and allow Azure AD to take complete control for managing users.
To change the user status to cloud only, you will have to follow below steps,
- Run command "install-module MsOnline
- Connect-Msolservice (Enter the global admin credentials once it prompts for credentials)
- Now run the command "Set-MsolDirSyncEnabled -EnableDirSync $false"
- This will change all users "on-premises sync enabled" property in portal to "No".
This indicates all users are now cloud only.
Let me know if you have any further questions on this.
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