Every week, we hear from software companies asking the same fundamental questions: "How do I add enterprise-grade document management to my application?" "What will my customers actually use?" "How do I handle security and compliance without building it myself?" Rather than theoretical answers, we've compiled real questions from software development company partners who've successfully implemented SharePoint Embedded. Here's what they asked, what they learned, and how their customers are benefiting.
Getting Started: The Foundation
Q: "We're a SaaS platform with multiple customers—how do we keep their data separate?"
A: The most successful multi-tenant software companies use the owning and consuming tenant approach. Once you have developed your application and it’s ready to be deployed to a customer, customers want to maintain control of their data, use the security configuration they have configured and compliance controls across their entire data estate. What they don’t want to do is store data outside of their tenant. When using SharePoint Embedded, you control the application, your customer controls their data.
Software companies create their application in the owning tenant. When you’re ready to bring on a new customer, you simply register SharePoint Embedded on the consuming tenant (your customer). As documents are added through your application, they reside in the consuming tenant and all the security boundaries they have configured.
Scale reality check: You can create millions of containers per tenant, with each container holding up to 30 million documents. That's serious enterprise scale.
Q: Our customers demand specific geographic data storage and compliance. Can SharePoint Embedded handle this?
A: SharePoint Embedded inherits Office 365's data residency capabilities, which often exceeds what most software companies can provide on their own:
- Geographic controls: Data stays within customer-specified regions
- Government clouds: FedRAMP support for government tenants or contractors
- Compliance inheritance: Customers leverage their existing Microsoft compliance investments
Game-changer example: Customers need FIPS compliance and ITAR support for government contractors. Rather than building this infrastructure themselves, they leverage Microsoft's existing certifications.
Q: What's the real story on costs? How do software companies handle SharePoint Embedded billing?
A: When a software company is ready to deploy their app there are two primary billing models:
Pass-through model: Customer pays Microsoft directly through an Azure subscription they choose.
- The software company handles integration, customer handles billing
- Customers maintain control over their data and costs
- Works well for enterprise customers with existing Microsoft relationships
Software company-standard model: Software companies include SPE costs in their pricing and then invoices the customer
- Easier for customers, but software companies must manage costs closely.
- Storage: ~$0.0067/GB/day + API transaction costs + egress costs
- Works well for SMB customers or all-inclusive service models
Success Pattern: Legal sector software companies typically use pass-through, while financial management apps include costs in their SaaS pricing.
Document collaboration: it’s all about the user experience
Q: Our customers hate our current document editing experience. What changes with SharePoint Embedded?
A: The collaboration transformation is usually immediate and dramatic:
Before SharePoint Embedded:
- Web-only editing with limited functionality
- Version conflicts and manual merging
- External users need full software licenses
- Downloading a document to edit it and then re-uploading it increases risk
After SharePoint Embedded:
- Native desktop Office applications with full feature sets
- Real-time co-authoring with automatic conflict resolution
- External users collaborate without Office licenses
- Zero custom integration maintenance
Customer impact story: A Construction Cloud customer was frustrated with web-only Office editing. With SPE, their construction teams can collaborate on specifications in desktop Word, cost sheets in Excel, and project presentations in PowerPoint—all simultaneously. Customer satisfaction scores improved immediately.
Q: How do we handle external users—clients, contractors, reviewers—who aren't employees?
A: This is where SharePoint Embedded really shines for software companies:
- Guest user support: External users can collaborate using their existing email addresses
- No license requirements: Guests don't need Office licenses to edit documents
- Time-bound access: You can grant temporary access for specific projects
- Granular permissions: External users see only what they need to see, and you control this through existing Entra ID security practices.
Real-world scenario: A pharmaceutical customer needs external regulatory reviewers to collaborate on drug approval documents. These reviewers (often using Gmail accounts) can access specific documents, make comments, and track changes—all while maintaining strict security controls and audit trails.
Q: What about industries with specialized document formats? Will SharePoint Embedded work?
A: SharePoint Embedded handles standard Office formats natively, and provides extensibility for specialized formats:
- Native support: Word, Excel, PowerPoint can be viewed or edited using the browser or full desktop experience.
- Custom formats: Through Power Platform connectors and custom viewers depending on how you built the user interface.
- Industry-specific: Many software companies build viewers for CAD files, proprietary image documents or medical records. This is the real value add for your app.
Specialized example: Engineering companies use CAD files and Office documents, relying on custom viewers for technical drawings as well as built-in Office collaboration tools for handling specifications and project documentation.
AI and intelligence: The future-forward
Q: Everyone talks about AI, but what are software development company customers really using?
A: Based on real implementations, customers are getting value from three AI capabilities:
- In app experience
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- Customers can find information across documents using natural language
- "Show me all contracts with renewal clauses" instead of keyword searches
- Provides a robust alternative to the custom search solutions that many find challenging to develop effectively.
- Document summarization
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- Automatic summaries of meeting notes, reports, contracts
- Executives get briefings without reading full documents
- Particularly valuable for legal and consulting software companies
- Content extraction
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- Automatic metadata extraction from uploaded documents
- Classification and tagging without manual effort
- Useful for compliance and organization
AI success story: A market research platform uses AI to mine insights from massive survey result repositories. They can identify patterns across client studies and provide competitive intelligence that drives premium service offerings—capabilities that would have required a dedicated AI team to build.
Q: How does SharePoint Embedded content fit into the Microsoft AI story?
A: Content is king and when it’s stored in SharePoint Embedded you can use the Microsoft AI stack to reason over it.
- Copilot Studio – Build custom agents that can access and reason over your SharePoint Embedded content, enabling tailored workflows and conversational experiences for your business scenarios.
- Azure AI Foundry – Use advanced AI models and orchestration tools to analyze documents, extract insights, and apply generative reasoning directly on your embedded content (coming soon).
- M365 agents – Empower Microsoft 365 Copilot and domain-specific agents to leverage your SharePoint Embedded data securely, delivering contextual answers and automation across apps like Teams, Outlook, and Word.
Control flexibility: You can disable Copilot at the container level, so customers only pay for what they use. This lets you offer different service tiers based on AI capabilities.
Q: How much prep work do our documents need for AI to be effective?
A: The software companies seeing best AI results focus on structured metadata and information architecture fundamentals.
Document organization:
- Clear document types (contracts, reports, specifications)
- Consistent metadata fields across document types
- Permissions, sensitivity labels and container architecture reduce the accidental data leakage risk.
Users simply add the document to a container through your application and SharePoint Embedded does the rest by automatically indexing the content, which adds it to the semantic index, so you get all the reasoning power in the LLM's.
Preparation benefit: Software companies find that organizing their document metadata and permissions before enabling Copilot improved AI accuracy. Customers get better results and more relevant document summaries.
Security and compliance: Enterprise requirements
Q: Our customers are in highly regulated industries. How do we handle their compliance requirements without becoming compliance experts ourselves?
A: This is SharePoint Embedded's biggest advantage for software companies—compliance inheritance:
Your customer's compliance = Your application's compliance
Following the owning/consuming deployment model provides:
- Customer's DLP policies automatically apply to containers
- Their retention policies govern document lifecycles
- Their audit requirements are automatically met
- Their security controls protect your application's data
Compliance success: Financial services software companies don't need to become SOX compliance experts—they inherit their customers' existing Microsoft Purview policies. Legal software companies get automatic GDPR compliance without building privacy infrastructure.
Q: What about audit trails and eDiscovery? Do we need to build this ourselves?
A: SharePoint Embedded provides enterprise-grade audit capabilities automatically:
- Complete audit trails: Every document access, modification, and sharing event is logged
- eDiscovery Integration: Native integration with Microsoft eDiscovery tools
- Retention policies: Automatic retention based on customer's existing policies
- Legal hold: Built-in legal hold capabilities for litigation scenarios
Audit reality: Legal sector software companies can provide their clients with comprehensive audit trails for regulatory compliance without building any custom audit infrastructure. Everything is handled through Microsoft's existing compliance tools.
Q: How do we handle customers who want to keep control of their data?
A: SharePoint Embedded gives customers more control than most software company solutions:
- Customer tenant: Data stays in the customer's Microsoft tenant, not yours
- Customer policies: Their security and compliance policies govern the data
- Software company access: You only access data through APIs with customer-granted permissions
Control example: SaaS platform software companies explain to customers that their documents live in the customer's tenant with customer-controlled governance. This made enterprise sales easier because customers maintain complete control over their data.
Have more questions or want to talk to the team, contact us: SharePointEmbedded@microsoft.com
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Resources
SharePoint Embedded overview: SharePoint Embedded Overview | Microsoft Learn
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