Authentication unsuccessful error can occur for Microsoft 365 account users when sending emails that are using IMAP as a server type. This is because SMTP authentication is blocked by default due to security reasons in Microsoft 365 organization settings. We strongly advise using the Exchange protocol that is part of our Business plan to access Microsoft 365 accounts instead - it is more stable and secure.
Nevertheless, it is also possible to use an IMAP account but in order to fix the Authentication unsuccessful error, users need to have Authenticated SMTP enabled in organization settings. That setting can be enabled only by the organization administrator for specific users in Microsoft 356 admin center or for the whole organization via PowerShell.
In order to enable Authenticated SMTP for a specific account:
- Go to Microsoft 365 admin center (https://admin.microsoft.com/)
- Go to Users -> Active users and choose the user you want to enable the setting for
- Go to Mail -> Manage email apps
- Make sure Authenticated SMTP is enabled and save changes.
In order to enable Authenticated SMTP for the whole organization:
- Log in to the organization via PowerShell
- Execute "Set-TransportConfig -SmtpClientAuthenticationDisabled $false".
Note that GoDaddy Microsoft 365 users can only do it for the whole organization via PowerShell as they do not have access to Microsoft 356 admin center.