SMTP Relay with Office 365 Email Alert Notification

Continuing my experience of migrating from Windows Server 2003 to Windows Server 2012 Essentials I came across a problem configuring the Email Alert Notification. In Small Business Service the SMTP server would be the same machine, however with Exchange cloud hosting on Office 365 this isn’t as straight forward and you must configure an SMTP relay instead as follows:

Step 1: Obtain the SMTP server setting
To obtain the SMTP server setting, follow these steps:

• Sign in to Outlook Web App.
  Take one of the following actions:
  In Office 365, click Settings , and then click Options.
  In Office 365 pre-upgrade, click Options, and then click See All Options.
• Take one of the following actions:
  In Office 365, in the left navigation pane, click Account, and then click Settings for POP and IMAP access.
  In Office 365 pre-upgrade, in the left navigation pane, click Account, click My Account, and then, in the Account Information area, click Settings for POP, IMAP, and SMTP access.
  Note the SMTP server setting information that’s displayed on this page.

Step 2: Create a user who has an Exchange Online mailbox
To do this, use one of the following methods:

• If you’re in a hybrid deployment or if you’re using directory synchronization, create the user in Active Directory, Exchange Management Shell, or either Exchange Management Console or Exchange Admin Center (depending on your version of Exchange Server). Run directory synchronization, and then activate the user by using an Exchange Online license.
• Note The user must not have an on-premises mailbox.
  Create the user by using the Office 365 portal or by using the Windows Azure Active Directory Module for Windows PowerShell, and then assign the user an Exchange Online license.

Step 3: Set up the Internet Information Services (IIS) SMTP relay server
To set up Internet Information Services (IIS) so that your LOB programs can use the SMTP relay, follow these steps, as appropriate for your situation.

1. Start Server Manager, click Features, and then click Add Features.
2. On the Select Features page, select the SMTP Server check box. If you’re prompted, click Add Required Role Services. Note This step automatically installs all prerequisite roles and features, including IIS (if they’re not already installed).
3. On the Select Features page, click Next. Then, on the Web Server (IIS) page, click Next.
4. On the Select Role Services page, make sure that the following role services check boxes are selected, and then click Next:
   The ODBC Logging check box under Health and Diagnostics
   The IIS Metabase Compatibility check box in IIS 6 Management Capability under Management Tools
   The IIS 6 Management Console check box in IIS 6 Management Capability under Management Tools
5. On the Confirm Installation Selections page, click Install.
6. After the SMTP Server installation is completed, click Finish.
7. Open IIS 6.0 Manager, right click Default SMTP Virtual Server, and then click Properties.
8. Click the Access tab, and then click Relay.
9. In the Select which computers may relay through this virtual server area, click Only the list below, and then enter the IP addresses of the on-premises LOB devices and application servers that will relay through the SMTP server.

   Warning Make sure that you enter only the IP addresses of the devices and servers that you trust. This setting lets you relay mail that’s coming from these sources to any destination. In effect, this makes the on-premises server that’s running IIS an open relay.

10. On the Access tab, click Authentication, make sure that the Anonymous access check box is selected, and then click OK.
11. Click the Delivery tab, click Advanced, and then, under Smart host, enter the fully qualified domain name (FQDN) of the SMTP server from the “Step 1: Obtain the SMTP server setting” section.
12. On the Delivery tab, click Outbound Connections.
13. In the TCP Port box, type 587, and then click OK.
14. On the Delivery tab, click Outbound Security, and then follow these steps:
    Click Basic Authentication.
    In the User name box, type the user name of the Office 365 user that you created in the “Step 2: Create a user who has an Exchange Online mailbox” section.
    In the Password box, type the password of the Office 365 user.
    Select the TLS encryption check box, and then click OK.