“External User” is used as a licensing term by Microsoft to describe individuals accessing an organization’s on-premises systems or online services tenancy who are neither employees of the licensed organization (or its affiliates), nor vendors, contractors, or agents working on the organization’s physical premises. Certain special Microsoft licensing exceptions are frequently made for external users (that are not applicable to internal users).

Some server and online services products licensed through volume licensing programs provide special accommodations for external users. For example, Teams, SharePoint Online, and Office 365 Groups provide external users with limited forms of use without requiring a User Subscription License (User SL). In addition, external users may access an Azure Active Directory (AAD) tenancy as guests. Each paid AAD User SL also licenses five external guest users for that edition.

Microsoft often tells customers that an off-site vendor, contractor, or agent can only be considered an external user if their time is shared between multiple customers, although this is not stated explicitly in the Microsoft volume licensing Product Terms.

“External User” is used as a licensing term by Microsoft to describe individuals accessing an organization’s online services tenancy or on-premises systems, where the accessing user is neither an employee of the licensed organization or its affiliates, nor vendors, contractors, or agents working on the organization’s physical premises or network. Microsoft often tells customers that an off-site vendor, contractor, or agent can only be considered an external user if their time is shared among multiple customers, although this is not explicitly stated in the Microsoft Product Terms.

Some server and online services products licensed through volume licensing programs provide special accommodations for external users that are not applicable to internal users. For example, Teams, SharePoint Online, and Microsoft 365 Groups provide external users with limited forms of use without requiring a User Subscription License (User SL). In addition, authorized external users may access an Azure Active Directory (AAD) tenancy as guests. This is usually accomplished using AAD Business to Business (B2B) or AAD Business to Consumer (B2C), which Microsoft collectively refers to as Azure AD External Identities.