This MS-900 practice question tests your understanding of describe microsoft 365 apps and services. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company uses Microsoft 365 E3 and wants to implement a collaboration solution that allows multiple users to co-author documents in real time, track version history, and set permissions at the document level. Which THREE Microsoft 365 services can fulfill these requirements?
SharePoint Online
SharePoint provides team collaboration with co-authoring and permissions.
OneDrive for Business
OneDrive supports co-authoring and version history for individual files.
Microsoft Teams
Teams uses SharePoint and OneDrive for file sharing and co-authoring.
Exchange Online
Why wrong: Exchange Online is email, not document collaboration.
Yammer
Why wrong: Yammer is a corporate social network, not for document co-authoring.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
SharePoint Online
SharePoint Online is correct because it provides document libraries that support real-time co-authoring, version history tracking, and granular permission settings at the document level. These features align directly with the requirements for collaborative document management in Microsoft 365 E3.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
SharePoint Online
Why this is correct
SharePoint provides team collaboration with co-authoring and permissions.
Related concept
Read the scenario before looking for a memorised answer.
OneDrive for Business
Why this is correct
OneDrive supports co-authoring and version history for individual files.
Related concept
Read the scenario before looking for a memorised answer.
Microsoft Teams
Why this is correct
Teams uses SharePoint and OneDrive for file sharing and co-authoring.
Related concept
Read the scenario before looking for a memorised answer.
Exchange Online
Why it's wrong here
Exchange Online is email, not document collaboration.
Yammer
Why it's wrong here
Yammer is a corporate social network, not for document co-authoring.
Common exam traps
The trap here is that candidates often confuse Microsoft Teams as a separate collaboration tool, but Teams relies on SharePoint Online and OneDrive for its file storage and co-authoring capabilities, making it a valid answer when the question explicitly asks for services that fulfill the requirements directly.
Detailed technical explanation
Under the hood, SharePoint Online uses the Office Online Server infrastructure to enable real-time co-authoring via WebSocket-based sync, while version history is stored as a series of file versions in the content database, each with a unique version ID. Document-level permissions are enforced through SharePoint's role-based access control (RBAC), which can break inheritance from the parent site to apply unique ACLs on individual files, a critical capability for compliance scenarios like legal document review.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
What to study next
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FAQ
Describe Microsoft 365 apps and services — This question tests Describe Microsoft 365 apps and services — Read the scenario before looking for a memorised answer..
The correct answer is: SharePoint Online — SharePoint Online is correct because it provides document libraries that support real-time co-authoring, version history tracking, and granular permission settings at the document level. These features align directly with the requirements for collaborative document management in Microsoft 365 E3.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
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