Database mail configuration is not working with office365

Hi there!
I' looking for some help debugging a blocking error in our DEV environment.
We're currently using Windows 2008 R2 Standard, with IIS 7.5 and MS SQL Server 2012 Standard.
We're experiencing troubles while trying to use database mail in conjunction with Office365 SMTP.
We've generated our self-signed certificate, via IIS, and configured SMTP Virtual Relay Server with local (machine-name) and remote domain, following a step-by-step tutorial from configureoffice365.com.
We've also checked at the original MSDN tutorial, but it's been of little use (at least for us).
We would like to use our Office365 SMTP server to send out notifications and we're currently using Office365 working credentials to try the SMTP authentication, but we're stuck with this error (x is used to hide sensible data):
OutboundConnectionCommand [12/May/2014:13:35:08 +0100] "STARTTLS - SMTP" 0 8
OutboundConnectionResponse [12/May/2014:13:35:08 +0100] "- -?220 2.0.0 SMTP server ready SMTP" 0 27
OutboundConnectionCommand [12/May/2014:13:35:08 +0100] "EHLO -?SQLDEVxxxxx SMTP" 0 4
OutboundConnectionResponse [12/May/2014:13:35:08 +0100] "- -?250-xxxxx.outlook.office365.com Hello [x.x.x.x] SMTP" 0 58
OutboundConnectionCommand [12/May/2014:13:35:08 +0100] "AUTH - SMTP" 0 4
OutboundConnectionResponse [12/May/2014:13:35:08 +0100] "- -?334 xxxxx SMTP" 0 16
OutboundConnectionResponse [12/May/2014:13:35:14 +0100] "- -?535 5.7.3
Authentication unsuccessful SMTP" 0 37
Any idea or suggestion?
Thank you.

Hi giovannizuccaro,
According to your description, when you configure database mail in your SQL Server Management Studio,
Please note that you enter the server to send to as localhost and the email address as the email you have on the office 365 Exchange online for the same account you used to configure the delivery configuration of the local SMTP server. And
you should choose anonymous authentication for SMTP authentication. Once finished the configuration, you can test the email sending, check if you are able to send emails to any external recipient using you Exchange online.
For more information, there is detail about how to configure SQL Database mail so send emails using Office 365 (Exchange Online):
http://blogs.msdn.com/b/momalek/archive/2013/02/25/how-to-configure-sql-database-mail-so-send-emails-using-office-365-exchange-online-a-walkthrough.aspx
If there are still some errors, I recommend you post your error message on the Office 365 forums (https://community.office365.com/en-us/f/default.aspx ), It is appropriate and more experts
will assist you.
Regards,
Sofiya Li
Sofiya Li
TechNet Community Support

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