How to Enable External Sharing in OneDrive for Business?

Requirement: Enable external sharing in OneDrive for Business

How to Enable External Sharing for OneDrive for Business Sites?

OneDrive for Business sites are meant for personal storage in Office 365, However there are times you may want to allow your users to share content from OneDrive sites with external users such as vendors, clients, customers, etc. To enable external sharing in OneDrice for Business, you should turn on external sharing from OneDrive for Business Admin center. Here is how to enable external sharing in OneDrive for Business:

• Login to OneDrive Admin center at https://admin.onedrive.com
• Click on "Sharing" link in the left navigation
• Under the "External sharing", To enable external sharing, set the configuration for OneDrive to anything other than "Only people in your organization" (meaning disable external sharing!). Please note, Your "OneDrive" sharing settings can't be more permissive than SharePoint External sharing settings.
  
  These are the options available in External sharing settings:
  
• Anyone -  sets the user to share with specific people and anonymous links. 
• "New and existing external users" - Enables end-users to share with specific people and can invite other users who are not in the Active Directory.
• "Existing external users" - This requires the external user to be in the Active Directory.  
• "Only People in your Organization" - Disables external sharing

• Hit "Save" button in the bottom of the page to commit your changes.

PowerShell to Enable External Sharing in OneDrive for Business:
To configure external sharing settings for OneDrive sites, use this PowerShell script:

#Parameter
$AdminCenterURL = "https://crescent-admin.sharepoint.com"
$OneDriveHostURL = "https://crescent-my.sharepoint.com"
$SharingSettings = "Disabled" # Disabled, ExistingExternalUserSharingOnly, ExternalUserSharingOnly, ExternalUserAndGuestSharing

#Connect to Admin Center
Connect-SPOService -Url $AdminCenterURL

#Set External Sharing settings for a OneDrive sites
Set-SPOSite -Identity $OneDriveHostURL -SharingCapability $SharingSettings

Enable External Sharing for a OneDrive for Business Site:
By default, All existing OneDrive sites inherits external sharing settings from the OneDrive admin center. However, there are times you may want to either enable or disable external sharing for a particular user's OneDrive for Business site. (Provided, you have external sharing enabled for OneDrive for Business at tenant level!)

• Login to Microsoft Admin Center at https://admin.microsoft.com
• Expand Users >> Active Users >> Search and find the user you want to enable External Sharing OneDrive for Business
• Click on the User name to open user properties >> Click on "OneDrive" tab >> Click on "Manage external sharing" link under "Sharing" (You won't get this link, if external sharing is disabled at OneDrive Admin center!).
  
• Tick the "Let people outside your organization access your site" checkbox and choose any of the option as per your requirement.
  
  

E.g. If your OneDrive for Business Tenant-wide configuration is set to allow only external users by inviting them to Azure AD, then you can go for the last option "Only allow sharing with existing guest users in the directory"

Please note, Since SharePoint and OneDrive products are tightly coupled, and OneDrive is on top of SharePoint Online, External sharing at Individual OneDrive sites can't be more permissive than the OneDrive for Business external sharing settings configured at the tenant level. E.g. If the external sharing settings at your OneDrive for Business Admin site is set to "Existing external users", then settings at your OneDrive site should be "Only allow sharing with existing guest users in the directory" or lesser (External sharing disabled!), Otherwise, You'll receive an error message "Update failed for ‎OneDrive‎ external sharing setting. It needs to be more restrictive. Please check the sharing setting under Resources > Sites."

PowerShell to Enable External Sharing for a OneDrive Site:
We can set the external sharing settings at site level using PowerShell as well:

#Parameter
$AdminCenterURL = "https://crescent-admin.sharepoint.com"
$OneDriveSiteURL = "https://crescent-my.sharepoint.com/personal/vahab_crescent_com"
$SharingSettings = "Disabled" # Disabled, ExistingExternalUserSharingOnly, ExternalUserSharingOnly, ExternalUserAndGuestSharing

#Connect to Admin Center
Connect-SPOService -Url $AdminCenterURL

#Set External Sharing settings for a OneDrive site
Set-SPOSite -Identity $OneDriveSiteURL -SharingCapability $SharingSettings

Here is my another post on configuring external sharing for SharePoint Online: How to Enable External Sharing in SharePoint Online?