There are three steps to adding a domain to your Office 365 tenant:
- Prove that you own the domain (aka domain validation or domain proof).
- Add users and assign licenses (optional).
- Set domain purpose and configure DNS.
Once these three steps are complete the domain is active for use in Office 365.
The second step is to add users and assign Office 365 licenses. Most of my customers use DirSync to synchronize Active Directory objects with Office 365, so this step is unnecessary. In this case I usually select, I don’t want to add users right now.
The third step is to set the domain purpose and configure external DNS so you can use this domain in Office 365. This is the step that trips most people up because Office 365 is so unforgiving about the DNS records it expects. Office 365 expects you to only use the records they specify, exactly as provided in the wizard.
But if you update or add these SPF and MX records required for Exchange Online, it will affect your mailflow sooner than you probably intended.
The trick here is to uncheck all the Office 365 services and then click Next to activate the domain without specifying a purpose. This has no effect on the way Office 365 works for the domain – the services still work and user licenses are unaffected. It simply bypasses the DNS configuration and checks.
Once the domain has been activated you will be able to assign that domain as a sign-on domain for cloud users.
After a short while you will see the newly activated domain in the Exchange Admin Center (Mail Flow > Accepted Domains) and you will be able to add email addresses using that domain to cloud users.