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Why Office365 external user adoption is so low

Office365 is an ocean with hidden gems. One of the highly underutilized features is external user collaboration. Office365 offers seamless integration capabilities for external users without compromising on security. There are endless possibilities in terms of solving real business problems with the use of external user features.

Most companies add external users to their Office365 tenant and restrict their usage to just share files and add them to Teams calls and channels. This is such a basic use case of an external user that I would say is like having a Ferrari and limiting its speed to 10 miles per hour.

External user functions can enhance your collaboration capabilities with vendors, sub-contractors, customers, temporary workers, frontline workers, students, community members, and so on. Be it managing projects, timesheets, tasks, or information flow, the capabilities of external user features extend beyond just file sharing.

I would like to highlight some of the underlying reasons for such a low adoption of external user features.

External User Governance

Adding a new external user to Office365 tenant: The process of adding a new external user to your tenant creates a dependency on your tenant administrator. This dependency can cause a significant delay in this process especially when the requests are very frequent and the external user count is large.

Tracking external user acceptance: Acceptance by an external user completes this invitation process. In the case of a large volume of external users, tracking is very difficult especially when tenant admin must access Azure Active Directory to confirm their acceptance status. Lack of auto-reminders even further delays this onboarding.

Lack of ownership by business users: Not empowering business users with a workflow to manage their external users creates another roadblock for the mass adoption of this feature. Active Directory users and external users must have a mechanism for user management without creating any dependency on the Office365 tenant administrator. In many cases, Office365 users would like to add external users for a limited period and giving them limited permissions. Lack of this level of management discourages an enterprise to fully leverage external users' features.

Guest User Interface

Usability and UX is the key to successful adoption for any feature. Guest users may not know anything about Office365 and for them, their portal or user interface is all that matters. Customizing users’ interfaces for guest users would cost a fortune. This is one of the reasons why companies are yet to see real benefits for the external user feature.

Identity Governance

Some of the challenges that I have highlighted above can be resolved by implementing Microsoft's Azure Active Directory Identity Governance (AAD-IG). It allows you to manage identity lifecycle, build workflows, put an expiry to external users, etc. However, there is a significant cost impact as customers must additionally subscribe to AAD P2 plans or upgrade their Office365 plan to E5.

If you wish to learn more about external users, please contact us at

In July 2021, our Workplace Solution Titan Workspace will solve all these pain areas as we are launching our new Guest User Portal feature. This will totally transform the way you are using Microsoft Teams or Office365. Follow us for more exciting news and watch this in action.

  • Ashish Kamotra
  • June 28, 2022
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