Thank you very much for sharing your findings. Our client is facing the similar scenario. I also tested and confirmed basic authentication works. Since OAuth 2.0 is a more secure way, I would like to find out if it is possible to configure SMTP with OAuth 2.0 for a multi-tenant environment. May I know if you may be aware of any update from Microsoft and see if OAuth 2.0 can be used?
1. In a Multi-tenant environment you have to use SMTP. The Office 365 and Shared Mailbox options will not work.
2. When setting up the SMTP you need to use Basic Authentication. This is obviously less secure so not all customers will want to do this.
3. When using this option you need to set a Password. The password is not your normal Office 365 password but an App Password. This can be setup in your Office 365 account.
There maybe other considerations here for the Office 365 tenant as there could be Group Policies, Security Groups, etc blocking the Basic Authentication. However as long as there is nothing stopping this it will send.
I believe this option would also work in those scenarios where a users do not have Office 365 accounts, such as Gmail, Yahoo, etc.
Not sure this is the answer as the users are Guests. They aren't Delegated Admin nor are they External Accountants. We also need to consider he scenarios whereby they don't have Office 365, what if they had Gmail, Yahoo, etc. How would that work?
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