How to launch Office Web Add-in from Web Application hosted on-premises?

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We have built an Office Web Add-in for Excel, which renders a Web Application inside Excel Task pane.

The Web Application is hosted on-premises on IIS/ASP.NET.

We are able to launch the add-in within Excel desktop.

What network infrastructure / hosting is required to launch the add-in within Office 365 Excel online in a way that only allows users within the organisation to access the Web Application - would it require public IP?

From an authentication standpoint, we can restrict access to Web Application using SSO with our Azure AD tenant.

The add-in will be deployed and managed through centralized deployment.

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Office add-ins don't introduce any restrictions where and how to host the application. You just need to address the same-origin policy, read more about that in the Addressing same-origin policy limitations in Office Add-ins article.