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Relay Access denied : Exchange 2003..

Outside vendor created an application for us that sends out Email alerts using SMTP.when sending emails it goes to all intranet users which is configured in our exchange server,but external domains it gives relay access denied error message.
Please note,
In the application,there is no provision to authenticate outgoing messages.
The application is installed in windows2008 server.
The database is Sql.

Thanks
Giri
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Have you added the ip address of the server to allow it to relay through your exchange server?
I dont have exchange 2003 any more so I cant post screenshots for you but I believe following the page below will give you the steps necessary to add the relay ip address

http://www.quantumsoftware.com.au/support/kb/article.aspx?kbarticleid=50

Commented:
If you know the IP Address of the outside vendor you can allow that IP Address to connect in and relay. In exchange 2008, you should create a receive connector specific to this app, set the ip address of the originating server in the Networks tab, change the authentication type to Anonymous & run the script to allow relay:
Get-ReceiveConnector "" |  Add-ADPermission -User "NT AUTHORITY\ANONYMOUS LOGON" -ExtendedRights "Ms-Exch-SMTP-Accept-Any-Recipient"

 

Commented:
So that was what my phone does! Sorry, posted dirs for E2008 cuz I couldn't see the whole thing on my phone & assumed.

For E2003, modify the Default SMTP server under org - servers - servername - protocols - smtp -  there is an Access tab that has a "let these people relay" button.
 

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Commented:
My problem is resolved.Thanks