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Donald HendersonFlag for United Kingdom of Great Britain and Northern Ireland

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SharePoint 2010 email to O365

We have moved our email to O365, but retain our Sharepoint 2010 on-prem. So now the Alerts no longer work. I've set up a IIS SMTP relay and a O365 Connector and got that working with other apps. However, when I configure SharePoint CA to use the IIS SMTP server as the outbound SMTP server I get entries in the Mailroot/badqueue folder saying the "Client does not have permissions to send as this sender".
My understanding is that the IIS Relay uses an authenticated connection, which is the account I have put into the Sharepoint CA setting, but it is actually sending the mail as From a different account (which is the site Admin account).
I've tried just putting smtp.office365.com and our MX record address into the Sharepoint CA mail setting, but they don't work as there is no TLS. All the guides just say set up a IIS SMTP relay, but it doesn't work without setting the authenticating account with Send As permissions for every user. Surely there is a better way to do this?
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Adam Brown
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Thanks Adam.