How to create Microsoft 365 guest users and contacts 

This video serves as a lab exercise aimed at explaining the concept of contacts within Microsoft 365. It explores the creation of contacts and demonstrates how they can be referenced when sending emails to users.
Furthermore, the video provides a thorough examination of the differences between guest and external users within Microsoft 365. It offers detailed insights into the various methods for creating guest users, highlighting their unique characteristics and functionalities.
This link will be useful to distinguish between guest users and external users.
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