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My company has an exchange online and SharePoint online a la carte as i understand. Right now we have 10 licenses for SPO, but users without a license can get to SharePoint just fine... and haven't seemed to have any reduced capability.

So besides just having 1 license to keep our provision of SPO, why would we need to license the rest of our users?

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Yes, you must license users for SPO. It is, of course as you've seen, on the 'honor system', but if you're audited you will need to get those SPO licenses.

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The below URL defines what External Users can do and the limitations.

https://support.office.com/en-us/article/Manage-external-sharing-for-your-SharePoint-Online-environment-c8a462eb-0723-4b0b-8d0a-70feafe4be85?ui=en-US&rs=en-US&ad=US

You need to use the right licenses for users. External users are not a part of your domain. During audits it can be a pain point as rightly pointed out by Trevor.

Besides, these external users are actually defined from the SharePoint Online portal. There is an option for external users. How do you see your users in that location? Also, are you syncronizing to Azure using DIRSync?

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