SMTP AUTH in Exchange Online Is Being Phased Out: What IT Teams Should Prepare for Now

Email delivery quietly powers many business processes. Printers send scanned documents, monitoring tools push alerts, applications generate invoices, and automation scripts notify teams without anyone thinking twice about how the messages actually leave the system.

For years, many of these systems have relied on SMTP AUTH using Basic Authentication in Exchange Online. That long-standing method is now approaching its end, and organizations using Microsoft 365 should start preparing before the change becomes disruptive.

This article explains what is changing, why it matters, and how IT administrators can prepare without panic.

Why Microsoft Is Moving Away from SMTP AUTH Basic Authentication

Basic Authentication works using only a username and password. While simple, it creates several security problems:

• Credentials are more vulnerable to password spray attacks
• Legacy devices cannot enforce modern security policies
• Multi-Factor Authentication cannot be properly applied
• Compromised accounts can be abused to send spam or phishing emails

Microsoft has been gradually removing Basic Authentication across Microsoft 365 services for the past few years. SMTP AUTH remained available mainly because many organizations still depend on legacy devices and applications that cannot easily modernize.

Now Microsoft is moving the ecosystem toward Modern Authentication (OAuth).

The Updated Deprecation Timeline

Microsoft has introduced a staged approach instead of an immediate shutdown, giving organizations time to adapt.

Key milestones:

• Until December 2026: SMTP AUTH using Basic Authentication continues to work as it does today.
• End of December 2026: Basic Authentication for SMTP AUTH will be disabled by default for existing tenants. Administrators can temporarily re-enable it if required.
• January 2027 onward: Newly created Microsoft 365 tenants will no longer support SMTP AUTH Basic Authentication.
• Second half of 2027: Microsoft plans to announce the final retirement date.

This phased rollout signals a clear direction: Basic Authentication is living on borrowed time.

Systems Most Likely to Be Affected

Many organizations underestimate how many services still rely on SMTP AUTH. Common examples include:

• Multi-function printers and scanners (scan-to-email)
• Monitoring and alerting platforms
• Backup systems sending status reports
• Legacy business applications
• Automated PowerShell or scripting workflows

When SMTP AUTH stops working, emails simply fail to send. The failure often looks unrelated at first, which makes troubleshooting frustrating.

Why This Change Matters More Than It Seems

Email notifications are often part of critical workflows. When they fail:

• invoices may not reach customers
• alerts may never reach administrators
• approval workflows can silently stop
• automated reporting breaks

The technical change is small, but the operational impact can be large. The real challenge is not flipping a setting  it’s changing how applications authenticate and send email.

Recommended Alternatives Going Forward

Instead of relying on Basic Authentication, organizations should start evaluating modern approaches.

1. SMTP Relay (Connector-Based)

Best suited for internal devices such as printers and scanners sending emails within trusted networks.

2. OAuth Authentication

Modern authentication using secure tokens instead of passwords. This is Microsoft’s preferred long-term solution.

3. Azure Communication Services Email

Useful for applications that send emails to both internal and external recipients at scale.

4. Hybrid Exchange Environments

Organizations running on-premises Exchange servers may temporarily route authentication through hybrid configurations while migrating systems

How to Check If Your Organization Still Uses SMTP AUTH

Before making changes, identify dependencies.

Start with:

• Entra ID sign-in logs filtered by SMTP client usage
• Exchange Online mailbox settings
• Device configuration reviews (especially printers)

Many organizations discover forgotten systems still sending emails years after deployment.

A Practical Migration Strategy

Rather than waiting until enforcement begins, take a gradual approach:

1. Inventory all email-sending devices and applications
2. Identify which ones use Basic Authentication
3. Test modern authentication alternatives
4. Migrate low-risk systems first
5. Disable SMTP AUTH tenant-wide after validation

Early testing avoids emergency fixes later.

Final Thoughts

SMTP AUTH Basic Authentication has survived longer than many expected, largely because real-world infrastructure moves slower than security standards. Microsoft’s updated timeline provides breathing room, but it should not be seen as permission to delay preparation.

Organizations that start auditing and modernizing now will avoid last-minute disruptions and improve overall security posture at the same time.

The change is coming gradually, not suddenly. The best time to prepare is while everything still works.