Following these instructions, you can edit Exchange Authentication Policies: First, connect to the  Exchange Online PowerShell module from Microsoft here,  and run the Get-AuthenticationPolicy command. If you see a blank return, it means there is no policy and you need to configure one. Create a new authentication policy named Allow Basic Auth. New-AuthenticationPolicy -Name “Allow Basic Auth”   To enable AllowBasicAuthPowershell and AllowBasicAuthWebService in the new authentication policy: Set-AuthenticationPolicy -Identity “Allow Basic Auth” -AllowBasicAuthPowershell Set-AuthenticationPolicy -Identity “Allow Basic Auth” -AllowBasicAuthWebService   Assign this policy to the Virtual Systems service account by replacing <UserIdentity> with the Virtual Systems Veeam O365 Backup account: Set- User -Identity – <UserIdentity> -AuthenticationPolicy “Allow Basic Auth” If you have a policy but true is not listed for AllowBasicAuthPowershell andAllowBasicAuthWebService, update with the following PowerShell cmdlets to update your policy. Set-AuthenticationPolicy -Identity “name of your authentication policy” -AllowBasicAuthPowershell Set-AuthenticationPolicy -Identity “name of your authentication policy” -AllowBasicAuthWebService Assign this policy to theVirtual Systems Veeam O365 Backup account, replacing <UserIdentity> with theVirtual Systems Veeam O365 Backup account. Set-User -Identity <UserIdentity> -AuthenticationPolicy “name of your authentication policy“