Email Not Sending — Hosted Exchange / Office 365 Disconnected

Section: Email & Microsoft 365 Tags: email, exchange, office365, not-sending, bouncing, smtp, disconnected, third-party-host Source tickets: #22007 Confidence: High — diagnosis workflow confirmed through escalation

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Symptom

All machines in an organisation cannot send email. The email client shows "Disconnected" or "Offline". Outgoing emails bounce back to the sender. Incoming email has also stopped. Affects all users simultaneously.

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Root Cause

Three common causes, in order of likelihood:

• Third-party hosting issue — Email is hosted by an ISP or third-party provider (e.g., SynStar, Cobweb, Krystal) who has an outage or has made a change to the hosting configuration
• Expired or lapsed M365 subscription — The Office 365 subscription has lapsed, causing the mailboxes to enter a grace period or go read-only
• Domain DNS records changed — MX or SPF records were modified (domain renewal, registrar migration) breaking mail flow

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Diagnosis Steps

Step 1 — Confirm scope: all users or one user?

• If all users on all machines are affected simultaneously → likely a hosting/DNS/subscription issue (server-side)
• If one user on one machine → likely a local client configuration or password issue

Step 2 — Check M365 subscription status

• Log in to https://admin.microsoft.com with a Global Admin account
• Go to Billing → Your products
• Confirm the subscription is active and not in an expired/suspended state
• Check Health → Service health for any active Microsoft incidents affecting Exchange Online

Step 3 — Identify who actually hosts the email

Many SME clients have email hosted by their ISP or a third party rather than directly with Microsoft. To identify:

• Run an MX lookup: https://mxtoolbox.com/MXLookup.aspx — enter the domain
• The MX record hostname reveals the hosting provider (e.g., cluster3.eu.messagelabs.com = Messagelabs/Symantec, mail.protection.outlook.com = Microsoft directly)
• If not Microsoft: contact the actual hosting provider — they are the first point of escalation

Step 4 — Check for expired/misconfigured subscription with the host

If hosted by a third party and they confirm no outage:

• Ask them to confirm the specific mailbox is active under their management
• Ask for their account manager or second-line — first-line agents often cannot see individual account details
• Confirm the subscription/licence covering the affected mailboxes is paid and active

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Remediation Steps

Scenario A — Third-party hosting outage (most common)

• Confirm the outage with the hosting provider
• Set user expectation: no fix possible until provider resolves — no agent action needed
• Advise client to use webmail as a temporary workaround: https://outlook.office.com or the provider's webmail URL
• Chase provider for ETA and ticket reference number
• Consider migrating to directly-managed M365 to remove dependency on third-party host (raise a project ticket)

Scenario B — M365 subscription lapsed

• In admin.microsoft.com → Billing → Your products — renew or reactivate the subscription
• Allow up to 15 minutes for services to restore
• If payment is the blocker: contact the client to resolve billing directly with Microsoft
• Once active, verify Exchange Online shows "Healthy" in Service Health

Scenario C — Domain DNS / MX records changed

• Run: https://mxtoolbox.com/MXLookup.aspx — confirm MX records point to the correct mail server
• Compare against the expected MX value (find in the M365 admin DNS setup page or the hosting provider's control panel)
• Log in to the domain registrar and correct the MX record
• TTL propagation: changes can take up to 48 hours; typically < 1 hour if TTL was low

Scenario D — Remove and re-add the mailbox on the client

If server-side is confirmed healthy but a specific machine stays disconnected:

• In Outlook: File → Account Settings → Email — remove the account
• Close Outlook completely
• Re-add the account: File → Add Account — enter the email address and let Autodiscover configure it
• Enter password when prompted

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Verification

Send a test email from an external account to the affected mailbox and confirm receipt. Send a reply and confirm the external party receives it. Check Outlook → Send/Receive → Work Offline is not enabled (toggle it off if so).

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If This Fails

If the domain is locked at a third-party registrar and you cannot access DNS: contact the registrar's support. If the mailbox is with a provider who is unresponsive, consider escalating to a domain transfer and migrating to M365 directly — raise a project ticket with the scope: domain transfer + MigrationWiz email migration.

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Related

• Article: Office 365 Email Migration via MigrationWiz — for moving away from third-party hosting
• Article: Office 365 Licence Activation Failure — licence-specific issues on the client