Hello Johnny,
Thank you for posting your query here!
You do not need a Windows Server VM with Active Directory Domain Services (AD DS) installed to set ACLs and manage file shares based on Azure Active Directory (AAD) for Azure Files. Azure Files supports Azure AD authentication directly, allowing you to manage access control at the file share level using Azure AD identities without the need for an on-premises AD DS server. The integration with Azure AD provides the capability to configure access control lists (ACLs) and file share permissions for Azure Files.
Once Azure Files is configured with Azure AD, you can manage access control at a granular level using Azure AD identities. Assign Azure AD users or groups to specific roles on the file share to control access.
Please let us know if you have any further queries. I’m happy to assist you further.
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