Office 365 Not Working with Outlook 2007/10 Keeps asking for Password

Problem with Office 365 working with Outlook 2007/2010:

We recently decided to move our internal email (Currently running our our SBS2007 Server) to Microsoft Office 365.  We have opened an Office 365 account and loaded all of our office workers email profiles.  We made the proper changes to the DNS for our Dot Com name.  Auto discover is functioning normally.  I disabled all of the Exchange functions on our SBS server so as not to interfere with the setup of the Office 365 profiles for our users.  Each workstation is currently using Outlook 2007.  When we try to setup the user for Office 365 it keeps asking for a password for the user.  The password is correct since we login with the users ID and password on the Office 365 Portal without issue.  

If I go to another workstation outside our network and try to load the user it works with outlook.  Only when we try to setup the user within our current network does it keep asking for the password.  I am thinking that it has something to do with our server but Im not sure.  I am hoping that someone has come across the same issue and may have a fix for me.

We tried researching it on the web and applied several fixes but no joy.

All of the setting within the Outlook setup are correct and verified.  Microsoft is absolutely no help.

Any suggestions would be greatly appreciated.
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Todd NelsonConnect With a Mentor Systems EngineerCommented:
As of 10 Oct 2017, Outlook 2007 hasn't been supported--period--and hasn't been supported with O365 since early 2015.  Connectivity to O365 was prevented with Outlook 2007 on 31 Oct 2017.

Since Oct 2015, Outlook 2010 hasn't been supported with O365.  The trend with Office is that when the product enters extended support (after 5 years since release) it is no longer supported with O365.  It may work, but it's not supported.  If you cannot connect to O365 with Outlook 2010, then you most likely do not have the latest Office 2010 SP installed along with all of the updates and the Microsoft Sign-On Assistant installed on the workstation Outlook 2010 is installed on.

My guess however, is that the end of accessibility via 2010 is getting real close.  Time to really start considering Office 2016.

BTW ... Office 365 ProPlus (2013 version) hasn't been supported since the beginning of 2017.  However, Office 2013 (the retail and EA versions) should still work with O365 but will most likely enter extended support this year and no longer be supported with O365.
MaheshConnect With a Mentor ArchitectCommented:
1st of all, outlook 2007 is not supported by O365 as client as far as I know.
test with at least outlook 2010 or onwards

Also what you need to do, you need to tell AD that do not provide user SCP for onpremise autodiscover
for that you need autodiscover record ALIAS in local DNS pointing to
also I have not worked on SBS exchange but you can check if below powershell works
Get-ClientAccessServer | Set-ClientAccessServer -AutodiscoverInternalURI $null

Open in new window

if it works, then client machine will not getting pointed to onpremise sbs exchange for autodiscovery function and it will look for DNS autodiscovery function
Éric MoreauSenior .Net ConsultantCommented:
have you tried ipconfig /flushdns on both servers and computers?
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mcgowrayAuthor Commented:
Flush DNS Did not work
Cliff GaliherCommented:
Outlook 2007 cannot work with O365. It doesn't support any of the newer exchange protocols. That's a non-starter.
Todd NelsonSystems EngineerCommented:
Sufficient information provided for resolution.
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