Explanation
You can invite guest users to the directory, to a group, or to an application. After you invite a user through any of these methods, the invited user's account is added to Azure Active Directory (Azure AD), with a user type of Guest. The guest user must then redeem their invitation to access resources. An invitation of a user does not expire.
The invitation will include a link to create a Microsoft account. The user can then authenticate using their Microsoft account. In this question, the external vendor already has a Microsoft account (
[email protected]) so he can authenticate using that.
Reference:
https://docs.microsoft.com/en-us/azure/active-directory/b2b/add-users-administrator