Microsoft (#GuyInAcube) suggest to think of it as follows:

  1. An apartment complex representing either AAD / Office 365
  2. An apartment representing a tenant.
    • The tenant can be an individual, company or an organisation
    • The tenant will be assigned a unique domain of the form <account>.onmicrosoft.com (This can be updated to the company domain if required)
    • The tenant represents a relationship with Microsoft
    • An Azure AD tenant is a specific instance of Azure AD. Each instance is completely isolated from each other and has a default environment named “{Azure AD tenant name} (default)”
  3. Each apartment contains environments, users, groups & billing (subscriptions)
    • An example environment URL being contosodev.crm6.dynamics.com
    • An example user being user@contoso.onmicrosoft.com