Hybrid Office 365 Exchange 2010 Outlook 2007

Hi experts, we have Hybrid setup with Office 365 and Exchange 2010 on premise. On moving mailboxes to Office 365, Outlook 2007 profile keeps prompting for password. If I setup a manual profile then it works no issues. With the existing profile if I go in and change authentication to Anonymous then it connects

However that is not acceptable we need the existing 2007 profile to prompt once for email address and password and then connect to Office 365. The existing Outlook profile correctly shows email server as Office 365 with Proxy connection also correctly populated only thing preventing change seems to be Authentication

how can this be fixed? Outlook 2007 SP3 for all clients are upto date with patches.

Also I need to change internal and external URI to point to autodiscover.outlook.com. How to do this?

TIA
abhijitm00Asked:
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Vasil Michev (MVP)Commented:
Outlook 2007 needs the latest updates AND the Office 365 desktop setup tool to work correctly with Exchange Online. You should really move to a newer version, it's not supported anymore and Microsoft can decide to block it at any point.
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abhijitm00Author Commented:
Thanks. How do I resolve this issue though? Do you have commands to change internal and external URI for autodiscover?
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Vasil Michev (MVP)Commented:
You dont need to mess with the URIs, all you need configured for Autodiscover in relation to O365 is the CNAME DNS record.
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abhijitm00Author Commented:
Thanks so autodiscover should address authentication issue for Outlook 2007 as well correct?
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Vasil Michev (MVP)Commented:
Not exactly, as noted above 2007 needs special treatment. At the very least, you need to run the desktop setup tool from the Office 365 portal.
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abhijitm00Author Commented:
Thanks for the assistance we were able to install needed updates using WSUS, SP3 and installing external and internal Autodiscover URIs
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