SAP SMTP Office 365

Hi,
I received message like below from one of my colleague : Is there any work around for configuring the SMTP for Office 365 in ERP6 EHP6.
it is looking good now. After I checked the current situation, I
noticed, that you use office365 as a mailserver.
Sadly this is requiring an authentication method (AUTH LOGIN) which is
not supported by SAP SMTP.
We are also looking for a solution for it, but currently this
authentication is not possible.
Kind regards
Hope you will help me to configure if you are already done....
Thanks in advance...
Regards,
Mathew Vaidyan
29th April 2014

So can you kindly let me know for us EHP4 (SAP_BASIS 7.01) what would be the step?
Also in few other forums i have seen with Office 360 with EHP4 configuration is not possible and in few it is possible with intermediate SMTP relay has to be installed.
I have configured and when i try to send an email(External Other domain)am getting the below error in trace log.
27.05.2014
01:37:44
SX_PERFORM_SMTPSEND
G
SMTP Plugin raises error:
27.05.2014
01:37:44
SX_PERFORM_SMTPSEND
G
Could not connect to smtp.office365.com: 25
27.05.2014
01:37:44
SO_SYNCHRON_STATUS_UPDATE
G
Message cannot be transferred to node SMTP due to connection error (final)
I have also tried with the port 587.

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    Received: from DBXPR05CA0014.eurprd05.prod.outlook.com (10.255.178.14) by
    AMSPR05MB065.eurprd05.prod.outlook.com (10.242.89.142) with Microsoft SMTP
    Server (TLS) id 15.1.99.14; Thu, 5 Mar 2015 16:16:30 +0000
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    DBXPR05CA0014.outlook.office365.com (2a01:111:e400:9434::14) with Microsoft
    SMTP Server (TLS) id 15.1.106.15 via Frontend Transport; Thu, 5 Mar 2015
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    by DB3FFO11FD028.mail.protection.outlook.com (10.47.217.59) with Microsoft
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    15.00.0913.011; Thu, 5 Mar 2015 16:15:55 +0000
    From: Jake Ives <[email protected]>
    To: Jake Ives <[email protected]>
    Subject: Test01
    Thread-Topic: Test01
    Thread-Index: AdBXX6dyI5u99OGoSKmXroKKyMA3Tg==
    Date: Thu, 5 Mar 2015 16:15:54 +0000
    Message-ID: <[email protected]>
    Accept-Language: en-US, en-GB
    Content-Language: en-US
    X-MS-Has-Attach: yes
    X-MS-TNEF-Correlator:
    x-originating-ip: [192.168.142.73]
    Content-Type: multipart/related;
                boundary="_004_081f834d85b7436193fa887613b9dac7INTEX01localdomainhere_";
                type="multipart/alternative"
    MIME-Version: 1.0
    Return-Path:
    [email protected]
    X-EOPAttributedMessage: 1
    Received-SPF: Pass (protection.outlook.com: domain of domain.com
    designates <IP OF ONPREM SERVER HERE> as permitted sender)
    receiver=protection.outlook.com; client-ip=<IP OF OUR ON-PREM SERVER GOES HERE;
    helo=mail.domain.co.uk;
    Authentication-Results: spf=pass (sender IP is <IP OF OUR ON-PREM SERVER GOES HERE>)
    [email protected]; ives.gb.net; dkim=none (message not
    signed) header.d=none;ives.gb.net; dkim=none (message not signed)
    header.d=none;ives.gb.net; dmarc=none action=none header.from=domain.com;
    X-Forefront-Antispam-Report-Untrusted: CIP:<IP OF ON PREM SERVER HERE>;CTRY:GB;IPV:NLI;EFV:NLI;BMV:0;SFV:NSPM;SFS:(10019020)(438002)(189002)(199003)(71364002)(87936001)(2656002)(98436002)(92726002)(102836002)(108616004)(19625215002)(19618635001)(512954002)(92566002)(229853001)(107886001)(66926002)(18206015028)(84326002)(16796002)(19300405004)(450100001)(19580395003)(2900100001)(77156002)(15974865002)(62966003)(5250100002)(5310100001)(99936001)(15395725005)(16236675004)(110136001)(17760045003)(67866002)(86362001)(19617315012)(19627595001)(15975445007)(19580405001)(54356999)(22756005)(50986999)(6806004)(46102003)(74482002)(106466001)(33646002)(7099025)(24736002)(15669805003);DIR:OUT;SFP:1102;SCL:1;SRVR:DB3PR04MB236;H:mail.domain.co.uk;FPR:;SPF:Pass;MLV:ovrnspm;MX:1;A:1;PTR:mail.domain.co.uk;LANG:en;
    X-Microsoft-Antispam: UriScan:;BCL:0;PCL:0;RULEID:;SRVR:DB3PR04MB236;UriScan:;BCL:0;PCL:0;RULEID:;SRVR:AMSPR05MB065;
    X-Microsoft-Antispam-PRVS: <[email protected]outlook.com>
    X-Exchange-Antispam-Report-Test: UriScan:;UriScan:;
    X-Exchange-Antispam-Report-CFA-Test: BCL:0;PCL:0;RULEID:(601004)(5001007)(5005006);SRVR:DB3PR04MB236;BCL:0;PCL:0;RULEID:;SRVR:DB3PR04MB236;BCL:0;PCL:0;RULEID:(601004);SRVR:AMSPR05MB065;BCL:0;PCL:0;RULEID:;SRVR:AMSPR05MB065;
    X-Forefront-PRVS: 05066DEDBB
    X-MS-Exchange-Transport-CrossTenantHeadersStamped: DB3PR04MB236
    X-MS-Exchange-Organization-MessageDirectionality: Incoming
    Received-SPF: Fail (protection.outlook.com: domain of domain.com does not
    designate 157.56.112.128 as permitted sender)
    receiver=protection.outlook.com; client-ip=157.56.112.128;
    helo=emea01-am1-obe.outbound.protection.outlook.com;
    Authentication-Results: spf=fail (sender IP is 157.56.112.128)
    [email protected];
    X-Forefront-Antispam-Report: CIP:157.56.112.128;CTRY:US;IPV:NLI;IPV:NLI;EFV:NLI;SFV:NSPM;SFS:(339900001)(489007)(189002)(71364002)(199003)(102836002)(92726002)(15975445007)(92566002)(17760045003)(62966003)(106466001)(15395725005)(16236675004)(77156002)(110136001)(107886001)(450100001)(5310100001)(229853001)(22756005)(98436002)(2900100001)(5250100002)(19625215002)(66926002)(99936001)(33646002)(15974865002)(19617315012)(19627595001)(67866002)(54356999)(108616004)(19300405004)(19618635001)(87836001)(2656002)(18206015028)(85426001)(512954002)(86362001)(6806004)(46102003)(74482002)(84326002)(19580395003)(50986999)(19580405001)(7099025)(24736002)(15669805003);DIR:INB;SFP:;SCL:1;SRVR:AMSPR05MB065;H:emea01-am1-obe.outbound.protection.outlook.com;FPR:;SPF:Fail;MLV:ovrnspm;MX:1;A:1;PTR:mail-am1on0128.outbound.protection.outlook.com;LANG:en;
    X-MS-Exchange-Transport-CrossTenantHeadersStripped: DB3FFO11FD028.protection.gbl
    X-MS-Exchange-Transport-CrossTenantHeadersPromoted: DB3FFO11FD028.protection.gbl
    X-MS-Exchange-Organization-Network-Message-Id: 927151e3-02c4-4c46-5539-08d22576df82
    X-MS-Exchange-Organization-AVStamp-Service: 1.0
    X-MS-Exchange-Organization-SCL: 1
    X-MS-Exchange-CrossTenant-OriginalArrivalTime: 05 Mar 2015 16:16:28.9728
    (UTC)
    X-MS-Exchange-CrossTenant-Id: cd52bfe2-da2e-446d-b8f1-e78db861d489
    X-MS-Exchange-CrossTenant-OriginalAttributedTenantConnectingIp: TenantId=bfa61dad-1543-4f3b-8075-03498e9f4fcb;Ip=[IP OF ON PREM SERVER HERE]
    X-MS-Exchange-CrossTenant-FromEntityHeader: Internet
    X-MS-Exchange-Transport-CrossTenantHeadersStamped: AMSPR05MB065
    X-MS-Exchange-Organization-AuthSource: DB3FFO11FD028.protection.gbl
    X-MS-Exchange-Organization-AuthAs: Anonymous
    X-MS-Exchange-Transport-EndToEndLatency: 00:00:03.5565465

    MX records are not set to office 365, the MX is pointing directly to the on-prem exchange server. 
    The problem is; Office 365 Mail Delivery Trace is displaying mail we've sent via our On-Prem server - We are having trouble understanding why this is happening.
    To clarify, the message tracer in Office 365 is displaying outbound mail (Which for example, a user has sent out from their outlook) BUT only outbound mail which is being sent to other office 365 users.
    We do not have mail on office 365, only on-premise hence the reason why we are flabbergasted to why the mail we are sending out would be displaying on the office 365 message tracer.
    To further clarify, we are only seeing addresses in the office 365 message trace which belong to recipients whom use office 365 for their mail.
    Hope this makes sense.
    getting messy O365 users to another O365 you mean?
    You mentioned if they send email using their MS Outlook Client.
    I'd suggest you to send another email to the same recipient but using OWA
    There may have been an office 365 connector in Outlook.
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