Glossary
Tenant
By Emil Björk · Microsoft ecosystem consultant, Gothenburg
An isolated instance of Microsoft 365 belonging to a single organisation.
A tenant is the isolated instance of Microsoft 365 that belongs to a single organisation. It has its own Entra ID directory, its own users and groups, its own SharePoint and Exchange Online services, and its own settings — all separated logically from every other tenant. Each tenant has a primary .onmicrosoft.com domain (assigned at sign-up) and one or more custom domains (yourcompany.com) that you verify and bind to it. Tenant boundaries are strict: data, identities, and policies do not cross them by default. Cross-tenant access settings, B2B collaboration, and Multi-Tenant Organisations exist to bridge tenants when needed.
Worked example
A company acquires a smaller business that already runs its own Microsoft 365 tenant. Rather than instantly merging the two — which isn't a supported operation Microsoft offers as a simple button — IT sets up cross-tenant access settings so the acquired company's users can be invited as B2B guests into shared Teams channels and SharePoint sites while each organisation keeps its own tenant, its own Entra ID directory, and its own licensing. A full tenant-to-tenant migration, moving mailboxes and OneDrive content from the old tenant into the parent company's tenant, is a separate, much larger project usually done later and deliberately.
Common pitfalls
Assuming a single organisation always has exactly one tenant is a common wrong assumption — mergers, acquisitions, and separate business units often leave a company running two or more tenants side by side, sometimes for years, and each one needs its own licensing, security baseline, and admin attention. Treating tenant boundaries as something Conditional Access or sharing settings can quietly bridge is another mistake: by default nothing crosses a tenant boundary, and any exception (B2B collaboration, cross-tenant sync, a multi-tenant organisation) has to be explicitly configured, not assumed. And confusing the .onmicrosoft.com domain with a company's real email domain trips up new admins — the .onmicrosoft.com name is a permanent, Microsoft-assigned identifier for the tenant itself, separate from whichever custom domains get added and used for actual mail.