Which service enables collaboration with external business partners as guest users?

The correct answer is Azure Active Directory (Azure AD) B2B, as it is specifically designed to facilitate collaboration with external business partners by allowing them to access resources in your organization as guest users. This service provides the ability to securely share applications and services with guest users from any organization while enabling those guests to use their own credentials.

Azure AD B2B allows organizations to invite external users, manage their access through policies, and ensure that they can participate in collaborative efforts without needing to create new accounts within the company's internal directory. This streamlines partnerships and enhances productivity by allowing seamless interactions across organizational boundaries.

In contrast, Active Directory Domain Services (AD DS) is primarily for managing internal domain-joined resources rather than guest access. Azure Active Directory B2C is focused on providing secure identity management for customer-facing applications, targeting individual consumers rather than business partners. Azure Active Directory forest trusts relate to a specific method of establishing trust relationships between multiple Active Directory forests, which is not designed for external guest collaborations.