A question that comes up in forums very often is about the object limits in Office 365.
The limitations are different based on where you are with your deployment. Following are the points to note.
If you only have the default something.onmicrosoft.com domain in Office 365 portal, you can sync a maximum of 50,000 objects. This includes users, groups and contacts.
If you only have the default something.onmicrosoft.com domain in Office 365 portal and want to sync more than 50K objects, you need to contact Azure AD support team who can increase the limit.
If you have a vanity domain (say yourcompanydomain.com) in Office 365 portal, your 50K limit is automatically increased to 300,000 objects. You DO NOT have to contact the support team for this. The limit is increased automatically once the domain is verified.
If you have a vanity domain (say yourcompanydomain.com) in Office 365 portal and you want to sync more than 300K objects, you need to contact the Azure AD support team to increase the limit.
Only one increase per tenant is allowed.
Any deleted objects in Office 365 (whether it is pure 0365 or on-premise AD sync’d ones) are retained for 30 days by default and this will be taken into account when the object limit is calculated. For example, if you have deleted 100 users, you can sync 49,900 or 299,900 objects to Office 365 as the case may be.
You can purge the deleted users completely using PowerShell, rather than waiting for the default object retention period of 30 days.