I have been using an on premises Windows Server 2008 to relay email from applications and hardware to Office 365. It's worked perfectly fine for the last several months. Suddenly, all mail has stopped flowing. I have done the obvious troubleshooting tasks: Made sure TLS encryption was checked. Logged in to OWA as the user I am using for authentication. Deleted and re-added the remote domain on my SMTP server. Double checked the SMTP address I am using (smtp.office365.com). Made sure I was using port 587. Restarted IIS, then rebooted the whole server. Re-entered the user name and password for SMTP authentication. Verified I could telnet from the server to Office 365 on port 587. No matter what, I get a Client is not Authenticated error, the queue backs up, and everything ends up in the bad mail folder. Other than some MS Updates being applied a week ago, nothing has changed on my server or network.
Any suggestions? I opened a support ticket, but haven't spoken to anyone about this issue yet.