Thanks for your post! This announcement is not related to whether you have an on-prem setup or not. The recommendation you cited is related to the Authentication methods policy and the deprecation is related to the existing MFA and SSPR configuration in your Azure tenant. The legacy settings are located under Microsoft Entra ID > Users > All users > Per-user MFA > service setting (for MFA configuration) and Identity > Users > Password reset > Authentication methods (for SSPR configuration). The guidance is to move to the new unified experience under Microsoft Entra admin center Protection > Authentication methods . You need to make sure that the settings for your tenant (available MFA methods in service settings and users in scope for SSPR) are noted so that when you migrate to the new experience, the configuration is ported over. https://learn.microsoft.com/en-us/entra/identity/authentication/how-to-authentication-methods-manage
The on-prem setup is a separate question. If you are using an existing on-prem MFA server setup, MFA server will also be deprecated in the future and the recommendation is to migrate to Azure MFA. https://learn.microsoft.com/en-us/entra/identity/authentication/how-to-migrate-mfa-server-to-azure-mfa?source=recommendations
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