You’re looking to set up an international Office 365 environment, and cannot find anything about it? That’s correct, because there is nothing like that at all. Neither a guide with best practices.

Some people suggest to set up a tenant on each continent. Give this a thought for a minute, and you can come up with even more questions.

  • You can only use your domainname on one tenant, how to handle the other tenants?
  • What to do with multiple SharePoint Online, OneDrive for Business and Yammer tenants, thinking in terms of replicating data?

From my point of view, setting up only one tenant is just fine. The only thing you might take in mind is setting one up on the continent on which the biggest part of your users reside.

Deep diving this matter, this is what I have learned from Microsoft:

Office 365 resides in Microsoft datacenters around the world which help keep the service up and running even when there’s a major problem in one region, such as an earthquake or a power outage. When you connect to your Office 365 tenant, the client connection will be directed to the appropriate datacenter where your tenant is being hosted. The rules that determine where your tenant can be hosted are defined by your agreement with Microsoft. The rules that determine how your client acquires the data from that datacenter location depend on the architecture of the service you’re using.
For example, when you log on to the Office 365 portal, you’re usually connected to the closest datacenter to the client and then directed depending on the service you use next. If you launch email, the initial connection to display the UI may still come from the nearest datacenter, but a second connection might be opened between the nearest datacenter and the datacenter where your tenant is located to show you what’s in the emails you read. Microsoft operates one of the top ten networks in the world resulting in incredibly fast datacenter-to-datacenter connections fast.

Connecting to the nearest datacenter

This is the most common type of connection, and it’s used by both the Office 365 portal and Exchange Online. In this situation, when clients attempt to connect to Office 365, their computer’s DNS query determines the region of the world their computer is coming from, and Office 365 redirects the request to the nearest datacenter.
Connections to the portal stop at the nearest datacenter, and the client computer is presented with information about the client’s tenant from that location.
Exchange Online goes a step further. Once the client computer is connected to the nearest datacenter, an Exchange server in that datacenter connects to the datacenter where the tenant is actually located as illustrated below. The Exchange Online servers in the nearest datacenter then proxy the requests from the client computer to the mailbox server. This speeds up the experience for the client computer by moving the heavy lifting of retrieving emails and calendar items to the Microsoft network.
This connection process is standard for high traffic, high value web applications like Office 365. When the client computer is not in the same region as the tenant, the connection looks much different depending on the service the client is connecting to.
The diagram depicts a customer using a standard Office 365 offering with a tenant in North America. In this scenario, the person making the request has traveled to Europe and is using Office 365 from that location..

  1. The client computer asks the local DNS servers for the IP address associated with Office 365.
  2. The client computer’s local DNS servers ask the Microsoft DNS servers for the IP address associated with Office 365.
  3. Microsoft’s DNS servers return the regional server name (based on the location of the client’s DNS servers), and the client computer repeats steps 1 and 2 to obtain the IP address of the regional Office 365 datacenter.
  4. The client computer connects to the regional datacenter IP address.
  5. The Exchange Online servers establish a connection to the active datacenter where the customer’s tenant resides.

Network connectivity to Office 365

Connecting to the active datacenter

Connecting to the active datacenter is designed for heavier data transfer workloads and is currently used by SharePoint Online. In this situation, when clients attempt to connect to Office 365, their browser is redirected to the active datacenter for their SharePoint Online tenant.
When the client computer is connecting to SharePoint Online from a different region, the connection is redirected to the active SharePoint Online datacenter. In this scenario, the customer is using a standard offering, resulting in the portal connections remaining local and the SharePoint Online connections being directed to the active datacenter.

  1. The client computer asks the local DNS servers for the IP address associated with Office 365.
  2. The client computer’s local DNS servers ask the Microsoft DNS servers for the IP address associated with Office 365.
  3. Microsoft’s DNS servers return the server name of the active SharePoint Online datacenter (based on the location of the client’s Office 365 tenant), and the client computer repeats steps 1 and 2 to obtain the IP address of the active Office 365 datacenter.
  4. The client computer connects to the active datacenter IP address.

Network connectivity to Office 365

Source: https://support.office.com/en-us/article/Network-connectivity-to-Office-365-64b420ef-0218-48f6-8a34-74bb27633b10