Suppose we have

  • 100 external users that need access to the SharePoint Online website to browse some content
  • These users don't need Lync, Word, Mail etc from office 365. Just a site access
  • We have 0 licenses left for Office 365
  • We want to create a lot of users without the need of creating a ton of mail boxes on outlook.com/hotmail
  • We don't want ask our external users to create Microsoft accounts (because it's not great customer experience and many users fail to do it even with a good manual)

Can we create 100 users using Azure AD, via Azure Portal (not Office 365 Tenant admin!) and just add these 100 users to the SharePoint site? I've just checked. Technically it works.

Now the question is this: Is it really supported by Microsoft? is not considered a violation of some sort? Will some audit notice that we have 100 AD users with no licenses and ask us to pay?

We really want to use this approach since we can create many accounts at once and just send login/password to the users and all we want the users to do is just access the SharePoint site.


  • I know that users, created in our own AD are not considered external
  • Even if I don't apply the licenses it just works
  • I could not find any written information specifically prohibiting scenario I've described above, but I want an official answer still, because at least two people I talked to say It sounds fishy but they could not provide any evidence for their suspicions.

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This is a technical license violation. Yes, SharePoint Online licensing is loosely or outright not enforced, but if Microsoft were to ask or audit you, you would be responsible for acquiring those additional licenses.

  • Is there a text where it's explicitly said? I find it hard to believe that Microsoft could not enforce this polocy if this scenarion is a violation – Denis Molodtsov Apr 1 '16 at 11:23
  • What you're asking is "What is the point of SharePoint Online licensing". The point is that you must license all of your users. If you need further information on Microsoft licensing, contact Microsoft Licensing directly as they are fully aware of licensing requirements. And no, enforcement is not there for SPO. – Trevor Seward Apr 1 '16 at 13:36
  • Thank you, Trevor. Unfortunately I have to agree with you here. Looks like there are quite a few people saying that it's not a supported scenario. That's such a shame though! – Denis Molodtsov Apr 1 '16 at 14:10

Check out this link: https://support.office.com/en-us/article/Manage-external-sharing-for-your-SharePoint-Online-environment-c8a462eb-0723-4b0b-8d0a-70feafe4be85 It seems you can invite external users to collaborate on your Sharepoint Online without the need to assigning them your O365 licenses. Definitely worth considering!

  • This is a question specifically about Azure AD accounts. Everyone knows you can invite external users for free using their private emails. I was asking about Azure AD because it's a very nice option since you can create a bulk of accounts with passwords, whereas, when you invite, let's say 100 external users, super messy. It's super-hard to control true external users if they are not part of your AD – Denis Molodtsov Jul 13 '16 at 15:17

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