Not Every File’s a Nail: Secure External Sharing

In IT, and data governance in particular, it’s easy to fall into a “see a nail, hit it with a hammer” mindset. When we think about permissions and searchability, the hammer we reach for most often is Microsoft Purview.

But what about securing files outside your organization? SharePoint was built for collaboration, and external sharing is part of modern work. But when you must share sensitive content with partners beyond your network, what’s the best way to keep it protected?

To find out, we gave the Cadence team a scenario to solve. While there are many tools that can do the job, one approach consistently works best.

The Scenario

You frequently exchange large design files with a trade partner. Email attachments are too big, and not recommended for document sharing anyway. This partner also competes with parts of your business, so you practice strict least‑privilege access internally.

How do you extend that same discipline to third‑party collaborators who may one day become competitors?

What the Solution Must Deliver

• Local guest authentication

• Session-based or encrypted access

• Data leak protection (no copy, download, print, or extract)

• Monitoring and alerts for bypass attempts

• Instant access revocation

• Consistent, low-maintenance enforcement

The Options

Sensitivity Labels with Encryption

Microsoft’s preferred method encrypts the file itself so policies follow it anywhere. But external users need compatible apps, labels multiply quickly, and admin overhead balloons. This approach is great for documents that must travel outside your tenant, but it isn’t ideal for simple guest viewing.

Double Key Encryption (DKE)

DKE requires both Microsoft’s key and your own, offering exceptional security. But it demands heavy engineering for everyday collaboration. It’s designed for protecting national‑security‑level assets, not routine vendor work.

Information Rights Management (IRM)

IRM applies encryption at the SharePoint library level. It works, but it is coarse, inflexible, and considered legacy. Microsoft is moving away from IRM, making it more of a stopgap than a future‑ready solution.

Third‑Party DRM

Vendor‑neutral DRM platforms provide strong controls, revocation, and reporting. But they add cost, complexity, and yet another console to manage. This can be useful in multi-cloud environments but may be overkill if you’re already committed to Microsoft 365.

The Approach That Works Best

Entra + Microsoft Defender for Cloud Apps

The best balance of security, usability, and simplicity comes from combining Conditional Access with Defender for Cloud Apps. Together, they enforce a browser‑only, read‑only experience for guests:

• No downloads

• No printing

• No copying

• No extra apps or infrastructure

Guests authenticate, view the content, and cannot take it with them. Revocation is instant, and administration is straightforward. This provides external least‑privilege control without the operational friction of heavier solutions.

Don’t Stress About Sharing

If you’re struggling with how to share files securely, don’t overthink it. Chances are you already have the tools you need. From there, it’s simply a matter of finding the right partner to help you put them to work.