Do D365 and M365 need to be in the same tenant to enable Single Sign-On (SSO)?

Single Sign-On (SSO) is a feature that enables users to authenticate once and gain access to multiple applications without needing to log in again for each one. In the context of Dynamics 365 (D365) and Microsoft 365 (M365), it is important to understand how tenant relationships work.

When D365 and M365 are set up in different tenants, it is still possible to achieve SSO through external identity management solutions or federated identity strategies. This means that users can authenticate through one service and be granted access based on that validation without being constrained to the same tenant. Multi-tenant architectures allow for this flexibility, as they are designed to support a broader range of integrations and user scenarios, including SSO for applications that operate in distinct environments.

In contrast, the other options imply a restriction or limitation regarding the usage of SSO across tenants, which is not the reality for multi-tenant applications. Hence, the ability to facilitate SSO across different tenants exemplifies the robustness of Microsoft’s ecosystem and its integration capabilities.