Veeam Backup for Microsoft 365 use backup proxy servers to leverage network when backup or restore data. The Veeam Backup for Microsoft 365 manager server is the default local backup proxy server.
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If you try to add organization at Veeam Backup for Microsoft 365, it happens Connect to PowerShell: Connecting to remote server outlook.office365.com failed with the following error message: Access is denied error, that’s because Microsoft begin disabling Basic authentication for Outlook, EWS, RPS, POP, IMAP, and EAS protocols in Exchange Online.
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You are required to provide a username and password to authenticate to your Microsoft 365 organization if you add an organization using the basic authentication method.
I won’t recommend adding organization with basic authentication, Microsoft announced that effective October 1, 2022, we will begin disabling Basic authentication for Outlook, EWS, RPS, POP, IMAP, and EAS protocols in Exchange Online. SMTP Auth will also be disabled if it is not being used.
You will use both Veeam Backup account and Azure AD application for authentication if you add an organization using the modern authentication method with legacy protocols allowed. Veeam Backup for Microsoft 365 uses Veeam Backup account and an application to establish a connection to your Microsoft 365 organizations with disabled security defaults and maintain data transfer during backup and restore sessions.
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When you add an organization using the modern app-only authentication method, you are required to provide Azure AD application settings. Please reference following link to create and configure Azure AD Application permissions.
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