I'm trying to set up SMTP authentication for my Exchange 365 tenant and I've made some changes to my settings. I've disabled the option to turn off SMTP AUTH in the Exchange admin center, turned off legacy authentication blocking in conditional access, created a connector for my WAN IP, and enabled authenticated SMTP in the user settings of the 365 admin center. Despite these steps, I'm having trouble getting it to work. Does anyone have insights or tips?
5 Answers
I've switched to using SMTP2Graph for our needs now. It's been working well for us!
I would recommend looking into alternative services. Microsoft has indicated that if you're using Office 365 to send emails to external recipients, it may be limited unless you subscribe to their high-volume email service. I switched to SMTP2Go, and it’s been smooth sailing since then.
The high-volume email service is mainly for internal recipients. Exchange Online can relay externally, but if you’re doing bulk mailing, consider using a third-party service like Amazon SES.
We used to utilize SMTP authentication, but we found we had to exempt the account from any conditional access policies that enforced multi-factor authentication for it to function properly. I’ll confirm our steps and see if we still have documentation on that.
You can test your SMTP settings with telnet. Try connecting using telnet [your.exchange.server.host] 25, and send an EHLO command. If you see a line starting with 250-AUTH, it means that authentication is enabled. Just remember, AUTH may not be available until a STARTTLS session is done, so you'll need a tool that can show the session logs, like EmailSender from xeams.
Have you considered using SMTP relay instead of authenticating directly? If you only need to send mail and not receive it from those devices, creating a connector to allow emails from your organization's IP address to Office 365 could simplify your setup. You can send without authentication in that case.
I had that setup before; I’ll add it to my list of options to try.

They still support SMTP relay for both internal and external mail. It’s a viable option without needing third-party help.