Microsoft 365 Extranet: External Sharing Portals for B2B in SharePoint or Office 365

What Is The Difference Between Intranet and Extranet?

Intranets and extranets are both private networks based on internet technology, but that is where the similarities end. Let’s take a look at the definition of an extranet vs. intranet!

Invite externals to M365 security groups?

What is an intranet?

An intranet is a private, internal network that is restricted to an organization’s employees or authorized personnel. It uses internet protocols (e.g. TCP/IP) but operates behind a firewall, making it inaccessible from the public internet.

The main purpose of an intranet is to serve as an Internal Communications tool for sharing information and documents with employees and internal departments.

Access to an intranet is typically restricted by authentication mechanisms, such as email address and password combinations, and is only available to individuals within the organization. It can be accessed from within the corporate network or through a VPN (Virtual Private Network) for remote employees.

Within Microsoft 365, an intranet can be built with tools like SharePoint Online, Viva, and Microsoft Teams, made accessible only to employees or authorized users within the organization. An intranet based on M365 can employ its security features, such as Entra ID (formerly Azure Active Directory or AAD) for authentication and role-based access control (RBAC).

What is an extranet?

The meaning of „extranet“ is a collection of data that extends „outside“ or „beyond“ the borders of a company. An extranet is a private network that allows controlled access to authorized external users (such as business partners, suppliers, or customers).

An extranet’s main function is to facilitate business-to-business (B2B) or business-to-customer (B2C) interactions. It allows external stakeholders to access certain internal resources, share data, and collaborate on specific projects.

Extranet access is granted through secure authentication methods similar to those used in intranets, but with additional layers of security to manage external connections. External users might connect via secure web portals, VPNs, or specific access credentials.

An extranet built in Microsoft 365 allows a company to share e.g. SharePoint sites or Teams channels with external partners or clients.

Uses of Extranet

In a Microsoft 365 (M365) extranet setup, you can provide external partners, suppliers, and customers with secure remote access to resources within your organization’s environment. You can create dedicated SharePoint sites or Teams channels or even a full extranet portal for external stakeholders to share and collaborate on documents, manage projects, and communicate in real-time.

For example, you might have a SharePoint site where suppliers can access and update delivery schedules or a partner portal where you manage ongoing projects with external contractors and provide information on your products. This setup ensures that all parties are always working with the most current information, while maintaining strict control over who has access.

Well-known B2B Extranet Examples

The extranets of well-known companies like Booking.com, Delta Air Lines, Expedia, and ATP (Airline Transport Pilot training) share several similarities, but they also exhibit significant differences tailored to their specific industries and user needs.

Similarities of these extranets:

All these extranets serve as secure portals that facilitate interactions between the company and external users—whether they be partners, suppliers, or customers. They provide tools for managing various aspects of their business relationships.

For instance, Booking.com’s extranet allows property owners to manage listings, rates, and availability, while Expedia’s Partner Central offers similar functionality across multiple platforms like Hotels.com and Vrbo. Both platforms focus on real-time updates, content management, and promotional activities to enhance business outcomes. Similarly, Delta’s extranet is used by external partners and employees to access critical operational and training resources, and ATP’s extranet is designed to manage pilot training and certification programs.

Differences of these extranets:

The primary differences lie in the specific functionalities and user groups targeted by each extranet. Booking.com and Expedia are primarily focused on hospitality management, providing tools for content management, promotions, and guest communication to property owners and travel agents. These platforms are designed to handle high volumes of user interactions, including complex pricing models and promotional strategies tailored to different demographics and seasons.

On the other hand, Delta Air Lines’ extranet is more specialized, catering to aviation industry needs. It supports operational tasks such as pilot training, crew scheduling, and compliance with regulatory requirements, which are far more specialized than the hospitality-focused tools of Booking.com and Expedia. ATP’s extranet, specifically, focuses on managing training programs for airline transport pilots, providing access to course materials, schedules, and certification processes.

In summary, while all these extranets are designed for external collaboration and business process management, they differ significantly in their target audience, functionality, and the complexity of the tasks they support​.

SharePoint Extranet in Microsoft 365

Companies can set up a Microsoft 365 extranet by using SharePoint as an extranet to securely collaborate with external partners, clients, or vendors. For instance, a project management team might set up a SharePoint Online extranet to coordinate project milestones and document sharing with a third-party contractor. In this setup, SharePoint provides version control, granular permissions, and access management through Azure AD B2B (or Entra B2B), which allows external users to authenticate using their own organization’s credentials, enhancing security and simplifying access.

In supply chain management, SharePoint extranet solutions can streamline workflows by creating a centralized document library for vendors to submit invoices, track shipment updates, or access procurement guidelines. Each vendor can have access limited to the relevant sections, ensuring data segregation while allowing real-time document collaboration. Using a SharePoint Online extranet, companies can automate processes like approvals and notifications with Power Automate, further enhancing efficiency.

Additionally, for customer support or training, SharePoint as an extranet can serve as a knowledge base, where external clients access documentation, FAQs, and training materials specific to their contracts. This approach not only improves customer engagement but also offers analytics on content usage, helping teams optimize resources based on customer interactions within the Microsoft 365 extranet.

User Management in a SharePoint Extranet 

In a SharePoint extranet setup, user management for external users—referred to as extranet users—relies heavily on Azure AD B2B (Business-to-Business) integration, allowing organizations to invite external users while maintaining control over data access and security. When external collaborators are added, they are generally categorized as B2B users or guest users. To initiate guest access SharePoint permissions, an administrator can send invitations directly, after which extranet users log in using either their home organization’s credentials or a personal Microsoft account.

One of the key points of extranet access control is applying granular permissions to users to define exactly which libraries, lists, and folders each user can view or edit. Additionally, user delegation in this environment allows administrators to assign specific management rights to internal users. A delegated user within the organization can manage extranet user(s), such as by adjusting permissions or approving access, without granting them full administrative privileges. Using an extranet user manager tool (either built-in or third-party) can further streamline these processes by automating invites, permissions adjustments, and access monitoring, helping maintain security standards.

Finally, extranet user manager tools often offer enhanced tracking and compliance reporting, which is essential for monitoring the activity of B2B users. These tools support user delegation by allowing specific roles or individuals to manage groups of extranet users, reducing the workload on central administrators while still enabling precise extranet access control across multiple projects and departments.

What Admins Should Know About Extranets

When setting up and managing an extranet, admins should consider these key factors and best practices:

1. Secure Access Management

Each extranet portal should use secure authentication, e.g. through Azure AD B2B, to manage access and identity. Two-factor authentication (2FA) or multi-factor authentication (MFA) is recommended for enhanced security, especially when sensitive information is involved.

2. Defined Permissions and Access Control

Implement strict permissions within the extranet partner portal or extranet vendor portal. Granular permissions ensure that each external user has access only to the resources necessary for their role. Role-based access control (RBAC) and user group segmentation can further secure the portal, ensuring data is segregated based on need-to-know criteria.

3. Monitoring and Compliance

Set up activity logging and access monitoring to keep track of actions within the extranet portal. This helps with compliance reporting and allows admins to identify any suspicious activity. Regular audits of permissions and user activity within the extranet help ensure ongoing security and alignment with compliance requirements.

4. User Experience and Branding

For external stakeholders, the extranet should be easy to navigate, clearly branded, and structured for intuitive use. Simplified navigation, clear document organization, and consistent branding within the extranet partner portal can enhance collaboration by making resources easy to find and interact with.

5. Content Management and Collaboration Tools

Since extranets are used for collaboration with external parties, the extranet vendor portal should be integrated with tools like SharePoint and Microsoft Teams to allow seamless document sharing, co-authoring, and real-time updates.

6. Automated User Management

Using extranet-specific user management tools can simplify guest onboarding, permission adjustments, and removal processes for external users. Automated workflows for inviting and removing external users can help reduce administrative workload while maintaining access control.

Extranet Security

For intranets, ensuring a secure environment is easier: Intranets can focus primarily on internal security, with limited exposure to external threats. Since intranets are isolated from the public internet, it benefits from enhanced security. Firewalls, access controls, and encryption protocols are commonly used to protect sensitive information.

Extranets, however, face greater security risks due to external connections, thus requiring more and stricter security measures.

Admins managing an extranet setup need to prioritize extranet security just as much as, for example, Microsoft Teams governance, in order to protect against data breaches, unauthorized access, and compliance risks. Here’s a breakdown of what they need to know!

Authentication and Access Control to Extranet

To mitigate extranet security risks, admins should enforce strict authentication protocols. Using multi-factor authentication (MFA) and Entra ID B2B (formerly Azure Active Directory B2B) for external user management in a SharePoint extranet security context helps ensure only verified users receive guest access to resources. MFA adds an extra layer of security, reducing the likelihood of unauthorized access through compromised credentials.

Granular Permissions

SharePoint extranet security allows admins to implement fine-grained access control, defining which users or user groups can access specific sites, libraries, and documents. By applying role-based access control (RBAC), admins can segregate access by role (e.g., partner, vendor, or client), minimizing the risk of unauthorized data exposure.

Data Protection and Encryption

Data within a SharePoint extranet should be encrypted both at rest and in transit. Microsoft 365 supports BitLocker encryption for stored data and TLS encryption for data in transit. Ensuring that sensitive documents are restricted to the appropriate users and applying sensitivity labels can further safeguard data within the extranet.

Monitoring and Alerts

Proactive monitoring is essential to identify potential security incidents early. Audit logging and Azure AD monitoring tools enable admins to track login attempts, data access, and permission changes within the extranet. Alerts can be set up to notify admins of suspicious activities, such as multiple failed login attempts or access from unusual locations.

Periodic Security Reviews

Regular audits of permissions, user activity, and access policies are necessary to ensure compliance and security integrity. By periodically reviewing access levels, especially for external users, admins can promptly revoke unnecessary permissions and update security policies to adapt to emerging extranet security risks.

Full Control of Guest Access in A SharePoint Extranet

External User Manager can invite externals to a Microsoft 365 security group, which is then authorized to access specific communication sites of your SharePoint extranet.

With External User Manager, you can provide portals and data within Microsoft 365 for external access in an Extranet Manager – for example a partner portal or a distributor portal.

External User Manager also…

• Automates guest user lifecycles by removing access automatically when no longer required.
• Provides a detailed overview of guest users and their access to sites, groups, and teams.
• Offers insight into externally shared files.
• Simplifies guest user onboarding with customizable information materials.
• Ensures compliance by requiring guests to sign essential documents (e.g., NDAs, communication guidelines, data protection agreements) before access is granted. Signed documents are securely stored and available for download as proof.

Automate your external access management: