Do Multiple Microsoft 365 Tenancies Make Sense?

• In certain situations, multiple Microsoft 365 tenancies may be required or beneficial.
• Segmenting into multiple tenancies always results in additional costs and complexity.
• Organizations should carefully consider how and when multiple tenancies of Microsoft 365 will be deployed.

When customers provision Microsoft 365, they generally deploy a single tenancy for their entire organization. In each tenancy, all Microsoft 365 services and most other Microsoft hosted services that rely on it are rooted in a single instance of Entra ID that cannot easily interoperate with other instances of the service, other than by individual users or groups of users of tenancy A being invited to collaborate within tenancy B, etc. In a limited set of circumstances, the organization might decide strategically to deploy—or might be forced to deploy—multiple tenancies of Microsoft 365. Some of these scenarios do not exist on-premises due to the more extensive flexibility of Active Directory and on-premises software; others might have workarounds that are not possible with Microsoft-hosted services.