When Microsoft released cross-tenant access settings into preview, the natural focus was on how this capability enabled external access to Teams shared channels. However, the story is deeper because cross-tenant access settings are also available for Azure AD B2B Collaboration (aka guest user access). A different blocking mechanism is used and it delivers better results, once you're used to the new method.
Azure AD cross-tenant access settings or policies define how your tenant collaborates with other Microsoft 365 tenants. By default, collaboration using Azure B2B Direct Connect is disabled, so some work is needed to prepare for Teams shared channels. In this article, we look at how to set up cross-tenant policies to enable collaboration to begin using Teams shared channels.
A year after announcing Teams shared channels, Microsoft is preparing to release the code into public preview in March 2022. The new collaboration mechanism uses Azure AD B2B Direct Connect instead of guest accounts, meaning that external members of shared channels use credentials issued by their home tenant to gain access. You'll need to configure a cross-tenant access policy to allow shared channels to work externally. Once that's done, the collaboration floodgates open.