People who need to see or work with your SharePoint Online site content but who don’t have user accounts for your SharePoint Online environment are considered “external users.” External users might be vendors or customers, for example. With SharePoint Online, after you activate the sharing feature, you can invite an external user to your site just by sending them an email with an invitation (the invitation expires after one use).
Just follow the simple three steps in the article "Share a site with external users" to enable the sharing feature and then follow the steps in this article "Grant permissions for a site" to grant and restrict access to your site and content. This is called managing permissions and you do it by using security groups, which control membership, or by using fine-grained permissions, which help you control content at the item or document level.
The Office 365 terminology for external users is Partner Access Licenses (PALs). A PAL
Is it possible to set the display name for PALs to identify them more easily rather than something like: live.com#email-address?
If so, it would be in the user profiles in the SharePoint Admin. Haven't tested it myself.
Can External Users also use search in a Website-Collection?
@Mike: Not exeactly sure if you mean the public website (you cant invite external users to that one) or a private site collection. External users can search the latter like any other user.
Aaron, your external users need to add their first and last name to their Windows Live ID. They can do this by logging in at login.live.com. If they are already in SharePoint, you will need to remove them from their groups and delete from overall site collection, then resend the invitation to join SharePoint. This will then display their first and last name. The live ID will still be used to search for and add users to fields in SharePoint however.
The office.microsoft.com/en-us... links seems to be broken, since they only redirect to office.microsoft.com/en-us
When I invited a user via their corporate user, and they logged in via their Hotmail address, once they accessed the SharePoint Online environment, it resolved their name to their Hotmail profile name, and now it's even harder to assess who is internal vs external when looking at user names. How can we manage 10,000 external users when we can't even see who is external? MSFT needs to add a flag field for external users.