What is an external user?

So, what is an external user? According to the Office 365 definition, an external user is someone outside of your organization who can access your SharePoint Online sites and documents but does not have a license for your SharePoint Online or Microsoft Office 365 subscription. External users are not employees, onsite contractors, or onsite agents for you or your affiliates. Technically speaking, it is simply the user which does not have an account registered in your Office 365, and therefore Windows Azure Active Directory, tenant. Also, mentioned definition is related to SharePoint Online only. Both Exchange and Lync have mechanisms of sharing data with external users and we will cover them as well.

http://www.adrit.de/Blog/Post/22/External-sharing-with-Office-365,-part-1–Introduction

last post about external sharing with Office 365 we covered options, possibilities and limitations of Office 365 in terms of the sharing content with external users. Now when we know what we can and can’t do, let’s see how to set up external sharing. This article will cover setting up SharePoint Online for the sharing content with external users. To mention this again, for SharePoint Online, we have following types of external users:

• Microsoft Office 365 user (different tenant)
  
• Microsoft Account (formerly: Windows Live ID)
  
• Anonymous users (accessing individual documents via guest link)
  

For more information on what features are available for external users and which aren’t, please read external sharing with Office 365 – Part 1: Introduction.

External sharing is a “feature” which must be enabled on the site collection level first. To do so, open the Office 365 Admin console, click on the Admin link in the top navigation bar and click SharePoint. This will take you to the SharePoint Admin center.

https://www.pluralsight.com/blog/it-ops/sharepoint-online-how-to-manage-sharing-with-external-users