We want to provide contractors with access to some areas of our SP Online environment.Have read about external sharing and it seems suitable as:*contractors may work infrequently (from a few days a year to many days a year)*all contractors have their own external email (own company or gmail/ hotmail etc.) MS guidance says that contractors are not eligible to be external users --> "External users are not employees, contractors, or onsite agents for either you or your affiliates".https://support.office.com/en-us/article/Share-sites-or-documents-with-people-outside-your-organization-80e49744-e30f-44db-8d51-16661b1d4232?ui=en-US&rs=en-US&ad=US How do other people share SP Online with contractors?

My take on this topic is that the term ""contractor" is very generic and differs from company to company depending on the market they operate within, their business model, and country. The so-called "gig economy" has created many contractors, if you accept that these people are not full-time employees but are engaged by enterprises to deliver specific services on behalf of those enterprises. Like any legal agreement, you have to read it to understand what the intent is. My understanding is that Microsoft does not want to create a situation where long-term contractors, who are almost employees, are brought into the Office 365 ecosystem without licenses. In other words, you use a tenant with a few licenses to generate documents that are then farmed out to hundreds of contractors via sharing to allow them to work on those documents. This might be acceptable for a short-term burst of activity, but unacceptable over a longer term. If in doubt, the safest approach is to assign contractors an account within the tenant and license them for whatever work they need to do. TR

Vivek,I have to say that your first paragraph is not true. You can indeed have a gmail address granted that you create an MS account with it. Even corporate email addresses too. Have you tried? I have a handful of times.Once you do that, you can do external sharing with that email address.

One of the many benefits of Azure AD is that MS is aware of hacks like occurred with Yahoo, and will provide warnings to you when those accounts are being used to access applications such SharePoint online. The B2B functionality (eliminates the need to bring outsiders into your directory while providing many powerful controls) and when used in conjuction with other Azure AD Services (MFA, Identity Protection, Privileged Identity management, etc) is a very powerful set of security capabilities. Creating SPO site collections for each client is a common method for managing a security boundary and when used with Azure B2B and AAD Groups provides an easily understandable and maintainble security structure.

You have to buy licenses for them in your tenant.

If the contractor is considered 'outside the organization' as a vendor and works off site rather than on-site, then you can share. For example, if you hired a contractor and you gave them a desk, laptop and corp email address, then they need a license.For 'outsiders' and they have their own email address, then you can share site or documents as an external user. The outsider contractor would have to create an MS account and there user id would be their email address.

SP Online and contractors | Microsoft Community Hub

Dean_Gross
Silver Contributor
Apr 18, 2017
Are these people contractors that are staff augmentation or contractors that are providing deliverables with whom you want to collaborate. If the former, they need a license, if the latter, you can use Azure B2B to manage their accounts and authorize them to access your systems (SPO and/or any other SAAS system) see https://docs.microsoft.com/en-us/azure/active-directory/active-directory-b2b-faq to help get starte
Salvatore Biscari
Silver Contributor
Apr 18, 2017
You have to buy licenses for them in your tenant.
- roykim
  MVP
  Apr 18, 2017
  If the contractor is considered 'outside the organization' as a vendor and works off site rather than on-site, then you can share. For example, if you hired a contractor and you gave them a desk, laptop and corp email address, then they need a license.
  
  For 'outsiders' and they have their own email address, then you can share site or documents as an external user. The outsider contractor would have to create an MS account and there user id would be their email address.
  - Paul O'Neill
    Copper Contributor
    Apr 18, 2017
    @Roy K wrote:
    If the contractor is considered 'outside the organization' as a vendor and works off site rather than on-site, then you can share. For example, if you hired a contractor and you gave them a desk, laptop and corp email address, then they need a license.
    
    For 'outsiders' and they have their own email address, then you can share site or documents as an external user. The outsider contractor would have to create an MS account and there user id would be their email address.
    Hi Roy K. What you say makes sense, and also would fit our situation, as contractors are all off-site/ external. But where does Microsoft officially say this?
    
    All I can find is the statement posted above "External users are not employees, contractors, or onsite agents for either you or your affiliates".
    This does not distinguish between on-site and off-site contractors.

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