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Very confused on how to sync Documents folder to Office 365

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I'm very confused on how exactly documents created and saved on Word are synced to the cloud.  Stated clearly, what I want is the ability to create a document on my mac and have it uploaded to my account (skydrive?) automatically, much like how if I create or modify a contact in Outlook it updates that same contact on my outlook web app.  


I assume this involves Skydrive, but I have not had much success with this.  First, the only way I've been able to access my skydrive is through the Office 365 admin dashboard (by the way, I'm signed up to the Office 365 Small Business Premium version).  When I launch the Microsoft Document Connection app, it won't let me connect to my skydrive account with the username/password that I use to login to Office 365 (are they different?).  Whenever I try to log in it says, "You do not have permission to connect."  So how do I get permission?  Or are these different accounts.  


I'm using the latest mac operating system (my mac was purchased only a few days ago) and I would very much like to get this sorted out.  Can someone tell me how exactly I'm suppose to setup this skydrive (or sharepoint) thing so that a created and saved word document on the client side is reproduced and modified on my skydrive (cloud).


Thanks,


John


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