Dell iDRAC and HPE iLO alert email (AlertMail) with Microsoft 365: email through Microsoft 365 after Basic auth ends

Short answer: Neither Dell iDRAC nor HPE iLO documents OAuth for alert email: both log in to SMTP with a user name and password, which stops working when Microsoft switches Basic auth off. Point them at your MX host on port 25 with authentication off, behind a relay connector that trusts your static IP.

Deadline: Microsoft 365 turns off SMTP AUTH Basic auth by default at the end of December 2026 – dates and background.

Modern authentication (OAuth) support

Not documented. Dell's iDRAC9 SMTP settings offer Authentication with a Username and Password, and Dell's email alert article doesn't mention OAuth or Microsoft 365. The iDRAC10 user guide's email alert section has SMTP server settings but no OAuth option; its OAuth 2.0 topics are separate from email alerts. HPE's AlertMail pages for iLO 5, iLO 6 and iLO 7 offer SMTP Authentication with an SMTP Username and password only, and HPE says iLO supports only STARTTLS SMTP servers. So a controller that logs in to smtp.office365.com with a mailbox password is Basic auth and is hit by the SMTP AUTH Basic auth switch-off. Dell says SMTP alerts need an iDRAC Express license or higher.

What you will see when it breaks

Reported: RAC0225: Sending the test mail failed (Dell Community threads on iDRAC test email)
The iDRAC Test Email or iLO Send Test AlertMail doesn't arrive (HPE: check the iLO event log to confirm a test message was sent)
"535 5.7.3 Authentication unsuccessful" or "5.7.57 Client not authenticated to send mail" (Microsoft Learn: SMTP AUTH login refused; check that Authenticated SMTP is on for the mailbox)
iDRAC mail stops after a firmware update to 4.00.00.00 or later (Dell: StartTLS became the default connection encryption)
Alerts reach internal mailboxes but not outside addresses (Microsoft Learn: the controller uses direct send to the MX host without a relay connector)

Best fix

Find controllers that log in to Microsoft 365: an SMTP server of smtp.office365.com with authentication on. The free SMTP AUTH sender script lists mailboxes that still log in over SMTP AUTH.
Create a relay connector in Exchange admin center (Mail flow → Connectors, from Your organization's email server) that trusts the static public IP the management network sends from.
iDRAC9: Configuration → System Settings → SMTP (Email) Configuration. Set SMTP (Email) Server IP Address or FQDN/DNS Name to your MX host (for example contoso-com.mail.protection.outlook.com), SMTP Port Number 25, turn Authentication off, and set Sender Address to an address in your domain. Then Alert Configuration → Alerts: Enable, tick the Email alerts you want and Apply.
iDRAC9: add a destination address, tick State, Apply, then click Send under Test Email. Dell recommends Register iDRAC on DNS. Leave connection encryption at StartTLS unless the test fails; Dell's fallback is racadm set idrac.RemoteHosts.ConnectionEncryption None. iDRAC7/8 use Server → Alerts → SNMP and Email Settings and have no STARTTLS.
iLO 5 and iLO 6: Management → Mail tab. iLO 7: iLO Settings → Alert and Logging, ellipsis next to Mail Settings, Edit Settings. Keep Enable iLO AlertMail on, set SMTP Server to your MX host, SMTP Port 25, keep SMTP Secure Connection on (STARTTLS) and turn SMTP Authentication off.
iLO: set Sender Domain or Email Address to an address in a domain your tenant owns (a bare domain becomes iLO-hostname@domain). A sender outside your domains is rejected; see 550 5.7.64 TenantAttribution. Click Apply (iLO 7: Update), then Send Test AlertMail and check the iLO event log.
iDRAC10: Dell's guide documents SMTP server settings under email alert settings (RACADM attribute iDRAC.RemoteHosts.SMTPServerIPAddress); use the same relay values. The iDRAC10 web menu path is not covered here.

If it can't do OAuth

No static IP? Without a connector, the MX host on port 25 is direct send, which only reaches mailboxes inside your organization (Microsoft Learn). That is usually enough for an ops team mailbox. If your tenant blocks it, see 550 5.7.68.
Or send alerts to a local SMTP relay on your network that signs in to Microsoft 365 itself. Dell and HPE only ask for an SMTP server address, so any relay you run works.
Stopgap only: an admin can turn Basic auth for SMTP AUTH back on for now. It ends when Microsoft removes it for good; the date is due in the second half of 2027. See the SMTP AUTH change.

iDRAC9 SMTP path	`Configuration > System Settings > SMTP (Email) Configuration`
iDRAC9 alert switch	`Configuration > System Settings > Alert Configuration > Alerts: Enable, Email alerts ticked`
iDRAC connection encryption	`StartTLS by default from firmware 4.00.00.00; racadm set idrac.RemoteHosts.ConnectionEncryption None to disable`
iDRAC license	`iDRAC Express or higher (not iDRAC Basic)`
iLO 5 / iLO 6 path	`Management > Mail tab`
iLO 7 path	`iLO Settings > Alert & Logging > Mail Settings > Edit Settings`
iLO encryption	`STARTTLS only; SMTP Authentication requires the secure connection option`
Relay values (both)	`SMTP server: your MX host, port 25, authentication off, sender address in your domain`
OAuth for alert email	`Not documented (iDRAC9, iDRAC10, iLO 5, iLO 6, iLO 7)`

Check your domain's SPF and DMARC

A relay sends from your office IP, so it must be in your SPF record.

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Sources

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