Q: (from Beth)
[We have] an end user looking at Office 365 for Office, Exchange, SharePoint and Lync. They are concerned about keeping their DNS in-house as they have existing ecommerce servers. We want to confirm that this can be done…
From the Office 365 FAQ:
Q. What if I already own a domain name?
A. Your Microsoft Office 365 account comes with a domain name—(eg: contoso.onmicrosoft.com)—but if you have your own domain name already, you can use that domain name with Microsoft Office 365 services too.
If you already own a domain name for your company, you can add it to Office 365 to create both domain-based email addresses and public facing website. If you wish to keep your current website hosted with another provider, we offer the flexibility to associate your company domain with that website provider while also associating your company domain with your Office 365 email account. You can manage your domain configuration within the Management portion of your Admin account information center.
So the short answer appears to be that you have to pass domain management over to Microsoft’s DNS servers, but you can continue to maintain your own custom DNS records. There is a long answer with a lot of control through the PowerShell: