Mail Users in Office 365 don’t have SMTP access

On-premises mail users (at least in Exchange 2010) had access to send mail as their organizational address through the on-premises SMTP server. However, mail users in Exchange Online cannot send mail as their organizational address using

So what can we do?

In order to use SMTP, users need full mailboxes. But these users should not actually have mailbox access. As a test, created a mailbox and I disabled all email apps for the mailbox in Exchange Online:

An Office 365 user's email app settings
An Office 365 user’s email app settings

The test user was no longer able to log in to Outlook on the Web (also known as OWA). SMTP still worked. Email forwarding still worked (although the user would not be able to set the forwarding address themselves).

Creating a user mailbox requires a user license, whereas mail users do not require a license. If you have a lot of on-premises mail users that now need full mailboxes, this could be problematic.

In Exchange Online, a UserMailbox with all email apps disabled is equivalent to an on-premises Exchange MailUser, except that the former requires a license.

Set-MsolUserLicense : A parameter cannot be found that matches parameter name ‘UsageLocation’

I wanted to apply an Office 365 (O365) license to a user via PowerShell:

PowerShell Command
Set-MsolUserLicense -UserPrincipalName "" -AddLicenses "exampletenant:EXCHANGESTANDARD_ALUMNI"

Set-MsolUserLicense : You must provide a required property: Parameter name: UsageLocation

Fine. What is this UsageLocation parameter? See Assign licenses to user accounts with Office 365 PowerShell:

You can assign licenses only to user accounts that have the UsageLocation property set to a valid ISO 3166-1 alpha-2 country code. For example, US for the United States, and FR for France.

OK, so US for United States.

PowerShell Command
Set-MsolUserLicense -UserPrincipalName "" -AddLicenses "exampletenant:EXCHANGESTANDARD_ALUMNI" -UsageLocation US

Set-MsolUserLicense : A parameter cannot be found that matches parameter name 'UsageLocation'.

Really, Microsoft? Is it a required parameter or is it not a parameter? Make up your minds!

Turns out, it’s a parameter of the Set-MsolUser cmdlet:

PowerShell Commands
Set-MsolUser -UserPrincipalName "" -UsageLocation US
Set-MsolUserLicense -UserPrincipalName "" -AddLicenses "exampletenant:EXCHANGESTANDARD_ALUMNI"

The license was applied successfully.