MSP Opportunity: Microsoft Disabling legacy SMTP Authentication in March 2026

Table is for illustrative purposes. Not every model will apply to table parameters – contact your MSP or reseller or check online for vendor-specific models.

🔴 High Risk (Immediate Action Required)

🟢 Low Risk (Future-Ready)

🟠 Medium Risk (Audit & Plan)

Microsoft has announced that, as of March 2026, it will disable legacy SMTP authentication (basic authentication) for email sign-in to Microsoft 365 services and require the use of modern authentication (OAuth 2.0). Time frame is 1 March to 30 April 2026.

This means:

Traditional username/password access via SMTP AUTH will no longer work
Applications and devices must use OAuth-based tokens to authenticate securely
Legacy clients (that don’t support OAuth) more than likely will be blocked

This change aligns with Microsoft’s broader push to improve security and reduce credential abuse (see FAQ’s for more information “Why is Microsoft making this move?”)

Impact on Legacy Systems

Systems that rely on username/password SMTP (print servers, MFPs, scanners, CRM/email automation tools, IoT devices, monitoring systems) will stop sending mail unless updated.

What can MSP (Managed Service Providers)/Resellers and IT teams do?

Audit all email sending sources: printers, scanners, embedded apps, network appliances
Update clients that don’t support OAuth, and use the opportunity to provide education
Enable OAuth 2.0 authentication flows in apps and scripts
Register applications in Azure AD (if needed)
Use app-specific tokens where appropriate

Failing to act could result in email outages, meaning a high surge in support tickets, operational impact(s), and potentially compliance failures.

End-User Experience

Users with modern mail clients will likely not notice any change.
Legacy mail clients (older Outlook versions, scripts) will be unable to authenticate. Legacy apps that can’t support OAuth may need Vendor updates, replacement or Gateway services (SMTP relay with modern auth)

If organisations rush to workarounds (e.g. open relays, SMTP proxies), they may inadvertently reduce security or create misconfigurations.

Opportunity for MSPs, Resellers and Integrators

Organisations will seek help to identify legacy usage, migrate to OAuth and/or test and validate their systems and printers.

Customers will need MSPs who have skills in:

Azure AD app registration
OAuth flows integration
Conditional access policy design

Resellers should proactively communicate:

When the change is happening
What systems might break
Migration paths and timelines
Stolen password abuse will be low to nil in the future with the move
Credential leaks from scripts or logs will be low to nil in the future with the move
Administrators will gain better visibility and control with conditional access control, device posture checks and risk-based access policies

FAQs

Why is Microsoft Making This Move?

Security First

Legacy SMTP auth is low-security because:

Credentials are often stored or transmitted insecurely
No second-factor or token-based protections exist in legacy systems
Easy target for credential stuffing and brute force attacks

OAuth 2.0 improves security by:

Using tokens instead of passwords
Supporting multi-factor authentication (MFA)
Allowing granular access scopes
Revoking access without password resets
Reduces risk of account compromise via email protocols.

Microsoft has been deprecating basic authentication across Exchange, Outlook, EWS, POP/IMAP, etc., for several years. SMTP AUTH is one of the last holdouts. Requiring OAuth ensures consistency across all access vectors.

Regulatory & Threat Pressure

As cyberattacks (especially ransomware) increasingly exploit stolen credentials, organisations and regulators expect stronger authentication controls. OAuth token issuance and use are logged centrally, improving auditing, incident investigation and SIEM integration. It supports compliance frameworks like: