Pros and Cons of Single Tenant vs Multiple Tenants in Office 365

Office 365 Single Tenant vs Multiple Tenants, what is the best option for you and why?

I recently was involved in a scenario with a customer that had to choose between having multiple Office 365 tenants or just a single tenant. This post will talk about some of the technical considerations that you will have to ask yourself if you are considering choosing between a single or a multi-tenant approach and the impacts that this decision has on the end user experience.

Introduction

The decision of going with multiple tenants for your organization should not be taken lightly since it has a LOT of implications for the end user experience. I will discuss the end user experience implications in a greater detail below but let me be clear: you should choose to use a single Office 365 tenant for your organization if you can.

Common Scenarios for Multiple Tenants

There are a few scenarios that organizations may feel that the best or even the only option is to go with multiple tenants. Here are some of the most common scenarios:

• Our organization is composed by several divisions worldwide and each division must have its data stored in different geographies
• We must provide complete autonomy of administrative control for each division within the organization
• We want to avoid network latency problems with Office 365 workloads (Ex: Exchange Online, SharePoint Online, Teams)
• One of your divisions may one day leave the organization and we want to ensure that if this happens, data is properly isolated
• The organization has multiple Office 365 licensing providers from different geographies

Going with multiple tenant is a possible way to solve the problems above but there are almost always alternative solutions. Recently, Multi-Geo capabilities were announced that allow organizations to split its data residency across different geographies without the need to have multiple tenants. To learn more about Multi-Geo Capabilities in Office 365, click here.

Important Technical Questions To Consider

Domains

One fairly common mistake that many organizations can make is to think that because they have multiple DNS domains, they need to have multiple Office 365 tenants. This is NOT true and you can have multiple domains in a single tenant (you can have up to 900 domains in a single Office 365 tenant, more details here).

Identity

In Office 365, users will authenticate to every workload using their identity, typically in one of the following scenarios:

• An Azure Active Directory account synchronized with your local Active Directory environment (recommended scenario for most organizations)
• A Cloud Only Account (if your organization doesn’t have a local Active Directory or some users will only need to access Office 365 and Cloud resources)

Azure Active Directory

If you need to sync your local Azure Active Directory with Azure Active Directory, there are a few considerations you have to take into account:

• An Azure Active Directory tenant is associated to a single Office 365 tenant
• Each user is unique in Azure Active Directory and you cannot synchronize the same user into multiple tenants. This has a very important implication: each user is a member of a single tenant and is consider as a Guest user in any other tenant
• If you have multiple tenants, each DNS domain can only be registered in a single tenant
• If you have several local Active Directory forests and you want to sync all forests into a single tenant, you can only have one Azure AD Connect instance that will have to have access to all the local AD forests. To learn more about the Azure AD Connect supported topologies, click here

Tenant Migration

If you are in a case where there are already several tenants in your organization and you want to migrate users and Office 365 workloads into a single tenant, it is important to evaluate which workloads are already being used. The easiest migration path is if the only workload in use is email and the more workloads in use, the harder the migration will be.

If you still evaluating if you are going for a single tenant or multiple tenants, read on.

User Experience

One of the most important things to consider before deciding between a single or multiple tenants is the end user experience. Next, I will discuss in greater detail, what the end user experience will be like in each of the two scenarios.

Single Tenant

This is how the end user experience will look like if you go with a single Office 365 tenant:

• All users are treated as from the same company
• Single point of access for all collaboration (single Intranet Portal for collaboration), users will only have to access one URL, making it easier for users to find the information they are looking for
• Better user experience overall
• Seamless sharing experience
• Sharing Office 365 groups can be done directly from SharePoint
• SharePoint Search will returns results for all information in the organization that each user has access to and the new intelligent/modern search recommendations will have a full experience on all the organization’s content, making it easier for users to find the information they are looking for
• Term Store can be used across the whole organization
• Users will access their OneDrive for Business site from any location in the tenant
• Users will access their user profile from any location in the tenant
• Using services like Flow, PowerApps, PowerBI, Stream, and Forms will be much easier:
  • PowerApps applications are all in one tenant and can be shared with all users in the organization without restrictions (Ex: Vacation Request App to allow all users in the organization to shedule their vacations)
  • Flows can be used by all users in the organization
  • Forms can be responded by all users in the organization
• Full Microsoft Teams Experience (no need to switch between tenants). This is how Microsoft Teams experience will look like with a single tenant:
  • Users do not have to switch between tenants in Teams and can talk to everyone in their organization
  • Users are notified of new conversations (or conversation replies) they have with anyone inside their organization
  • Presence of users in Teams is consistent (there is only one tenant and users are always connected to the same tenant)
  • You can talk to anyone in the organization in Teams and you can easily find anyone in the organization in the Teams search bar
• Full Experience in Office 365 Groups
• A single tenant already supports Multiple Geographies (for Exchange, OneDrive and SharePoint). To know more about Multi-Geo Capabilities in Office 365, click here
• Shared mailboxes may include users from different domains as all users are in the same tenant
• Sync offline any document library in any SharePoint site in the tenant using the same identity
• Office 365 App Launcher will appear for all users since they are always using the tenant they belong to

Multiple Tenants

This is how the end user experience will look like if you go with multiple Office 365 tenants:

• Users from other tenants are treated as Guests (limited user experience)
• Several points of access for collaboration (several Intranet Portals for collaboration), users will have to access several different URLs, making it harder for users to find the information they are looking for
• Delve is limited to one Office 365 tenant and users will not be able to collaborate using Delve with users from other tenants
• Shared mailboxes cannot include users from different tenants
• Across Office 365 tenants, external Out of Office replies will be used. The internal Out of Office replies will only work for users within the same tenant
• Guest users cannot be pre-authorized on SharePoint content; they need to follow the invitation workflow on a case-by-case basis through an email invitation. External Access will also need to be enabled in the tenant
• Adding external users to a Office 365 group must be done from Outlook Web App (confusing for users, since they have two places to share an Office 365 group: SharePoint for internal users, Outlook Web App for external users)
• SharePoint Search and Term Store are bound to a single tenant. Users will have to search in multiple tenants, making it harder for users to find the information they are looking for
• Microsoft Search does not work across tenants, and the new intelligent/modern search recommendations will not be nearly as helpful as they could be
• Users will only be able to access their OneDrive for Business site from the tenant they belong to
• Users will only be able to access their user profile from the tenant they belong to
• Trying to use the services like Flow, PowerApps, PowerBI, Stream, and Forms will be much harder:
  • PowerApps only supports users from one tenant . For example, a Vacation Request App can only be used by users in one tenant (or the app should be installed in all tenants and data gathering for all organization would have to be merged)
  • Flow can only be used by users in one tenant
  • Forms can only be answered by users in the same tenant. If we want to share the form with other tenants, the form must be public which allows users from any organization or an anonymous user to respond
• Users can’t sync offline document libraries from multiple tenants using OneDrive for Business with the same identity (there is a user voice request to enable this feature)
• Limited Teams Experience (users from one tenant need to switch between tenants to talk with users from another tenant).
  This is how Microsoft Teams experience will look like with multiple tenants:
  • Users have to switch between tenants in Teams to talk to people from another tenant
  • Users are not notified of conversations of other tenants in which they are Guests when connected to another tenant (eg, the tenant to which they belong)
    • Only when there is a direct mention to the team, users are notified of other tenant’s conversations in the upper right corner of Teams
  • Users, when connected to another tenant as Guests, are only notified of their tenant’s conversations in the upper right corner of Teams
  • The names of users when connected as Guests to other tenants appear with suffix “(Guest)”
  • Presence of users in the Teams is not consistent, and the indication of presence is only correct in the tenant to which the user belongs to. Example:
    • User as Guest appears as Offline
    • User in the tenant that belongs to appears as Busy
  • By default, it is only possible to talk with people of the same tenant at the same time. If we want to talk to people from other tenants, we have the following possibilities:
    • We have to switch tenants in Teams and we can no longer talk to people in our tenant
    • We add the person as guest in our tenant in one of the teams to which we also belong
• There are several Teams features limitations for Guest users (see the table below)

• Limited Experience in Office 365 Groups (see table below)

• Office 365 App Launcher will only be displayed for users when they access the tenant they belong to. When they access other tenants, the App Launcher will not be displayed, making it a confusing experience for the user

Conclusion

The analysis above takes in consideration the current features in Office 365 and things may change in the future. Despite the changes that may occur in the future, the user experience with multiple tenants will always be limited in comparison with the end user experience with a single tenant.

If your organization needs to collaborate without barriers and have a richer collaboration experience, a single tenant scenario is your best option.

You may go for multiple tenants but in the way I see it, this should only be an option if technically there is no other option.
One of strongest arguments in favor of a multi tenant scenario is the case of organizations that are composed by multiple divisions or companies (ex: hotel chain with multiple hotel units) and one of the companies may leave the organization. Even in this case, the decision to go for multiple tenants should be carefully evaluated since the degree of separation that this solution imposes within the organization and the limitations in what regards to collaboration experience are very significant and should not be overlooked. No doubt that if, in the scenario above, a company leaves an organization that has a single Office 365 tenant, migrating users and Office 365 workloads will be harder but should this alone make organizations go for multiple tenants, sacrificing the collaboration experience? I would love to hear your thoughts on this subject and feel free to leave your opinion in the comments section of this post below.

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Happy SharePointing!