When you need to communicate and collaborate with people outside your organization, Microsoft Teams gives you two different ways to make that happen. The first – external access (federation) – lets you find, call, and chat with users in other domains (for example, contoso.com). The second – guest access – lets you add individuals to your teams, as guests, using their email address. You can collaborate with guests as you would with any other users in your organization.
You can use both external access and guest access if you want – one doesn’t preclude the other.
Use external access (federation) when you need a solution that lets external users in other domains find, call, chat, and set up meetings with you. External users have no access to your organization’s teams or team resources. Choose external access when you want to communicate with external users who are still on Skype for Business (online or on premises) or Skype (coming in early 2020).
External access is turned on by default in Teams, which means your org can communicate with all external domains. The Teams admin can turn it off or specify which domains to include (or exclude).
If you want external users to have access to teams and channels, guest access might be a better way to go.
Use guest access to add an individual user (regardless of domain) to a team, where they can chat, call, meet, and collaborate on organization files (stored in SharePoint or OneDrive for Business), using Microsoft 365 or Office 365 apps such as Word, Excel, or PowerPoint. A guest user can be given nearly all the same Teams capabilities as a native team member.
- Guests are added to your organization’s Active Directory.
- To communicate with a guest, the guest has to be signed in to Teams using their guest account. This means that a guest may have to sign out of their own Teams account to sign in to your Teams account.
- Guest users have access to more resources in Teams – such as files, teams, and channels – than external-access (federated) users.
- The Teams admin controls everything that a guest can (or can’t) do in the Teams admin center.
To find our more about the comparison between Guest and External users click here