Chatter External license and feature

Each Salesforce org will get 5000 free Chatter Free license and 500 free Chatter External license, but I heard is possible to request for more if you purchase lot of Salesforce paid licenses.

Chatter External
This license is designed to invite customers to Chatter groups. Customers are users outside of a company’s email domain. Customers can access information and interact with users only in the groups they’re invited to. They have no access to Salesforce objects or data.

Chatter Free
The Chatter Free license is designed for users who don’t have Salesforce licenses but need access to Chatter. These users can access standard Chatter items such as people, profiles, groups, and files, but they can’t access any Salesforce objects or data. Chatter Free users can also be Chatter moderators. Chatter Free users don’t see tabs like other Salesforce users. Chatter Free users access Chatter feeds, people, groups, and files using the links in the sidebar of the Chatter page.

Chatter Only aka Chatter Plus
The Chatter Only license is also known as the Chatter Plus license. It is designed for users that don’t have Salesforce licenses but need access to some Salesforce objects in addition to Chatter. These users can access standard Chatter people, profiles, groups, and files, plus they can:

•  View Salesforce accounts and contacts
•  Use Salesforce CRM Content, Ideas, and Answers
•  Access dashboards and reports
•  Use and approve workflows
•  Use the calendar to create and track activities
•  Modify up to ten custom objects

Note: You can upgrade a Chatter Free license to a standard Salesforce or Chatter Only license at any time. You can’t convert a standard Salesforce or Chatter Only license to a Chatter Free license.

So, what is the difference between Chatter Free with Chatter External license in features? Here are few limitations of Chatter External license compare to Chatter Free license:

Feed
- No option for All Company feed
- Not able to Follow people

Groups
- Not able to create new Group
- Not able to see all Active Group and request to join

Topic
- Not able to search by Topic

See the difference in screenshot below:

Chatter External

Chatter Free

If you use Salesforce or Chatter Free and your business partner invite you to join their Chatter Group, you will receive email, by default, it will add guest in the username before domain name, example: yujohan@guest.gmail.com

Reference: Chatter User Licenses