Office 365 SMTP settings and limits for cold email (2026)

What Microsoft 365 is

Microsoft 365 is Microsoft’s subscription for business email, Office apps and Teams, and Exchange Online is the mail service inside it. For cold email it is one of the two mailbox providers outreach runs on, next to Google Workspace: an Outlook mailbox sends from Microsoft’s infrastructure and connects to every serious sequencer over OAuth. This page covers what it costs, the SMTP settings, and the 2026 limits that decide how hard a tenant can be pushed.

Microsoft 365 pricing for email

Every price here is per user per month on an annual subscription, paid yearly and renewed automatically. The cheapest mailbox is Exchange Online Plan 1 at $4, with 50 GB of mail and no Office apps. Business Basic costs $7 with Teams or $5.40 without, and adds a 100 GB mailbox and the web and mobile Office apps. Business Standard with Copilot is $23.50, or $20.30 without Teams, and Business Premium with Copilot is $32, or $28.80. For sending mailboxes you need nothing above Basic, and Exchange Online Plan 1 is enough if nobody opens Word.

Business plans come with a one-month free trial that needs a card and converts to a paid subscription unless you cancel. Once a paid subscription starts, you have 7 days to cancel for a prorated refund; after that you are committed for the year.

Office 365 SMTP settings

These are the settings for authenticated SMTP submission, which sequencers use when they connect with a username and password rather than OAuth:

• Server: smtp.office365.com
• Port: 587, which Microsoft recommends, or 25
• Encryption: STARTTLS, with TLS 1.2 or 1.3
• Sign-in: the full address of the mailbox you send from

SMTP AUTH must be enabled for each sending mailbox, because it is switched off by default on tenants created after January 2020, and it does not work while security defaults are on. Microsoft recommends OAuth instead, and the timeline makes that a requirement: password logins for SMTP AUTH keep working until December 2026, are disabled by default for existing tenants at the end of December, are unavailable on tenants created after that, and get a final removal date in the second half of 2027. If your sequencer offers a Microsoft OAuth connection, use it now.

Microsoft 365 sending limits in 2026

Each mailbox can send to 10,000 recipients a day and 30 messages a minute, with up to 1,000 recipients on a single message where an admin raises the limit. Those are not the limits that bite. The one that does is tenant-wide: the tenant external recipient rate limit caps how many outside recipients the whole tenant can reach in 24 hours at 500 times the license count to the power 0.7, plus 9,500. One license gives 10,000 a day, 10 licenses 12,006 and 25 licenses 14,259.

From September 2026 Microsoft also throttles new tenants. In the first 30 days a tenant gets 10% of its calculated quota, from day 31 to 60 it gets 25%, and only after 60 days does it reach the full figure. Trial tenants are held to 500 external recipients a day whatever their license count, and mail from the default onmicrosoft.com domain is limited to 100 external recipients a day per organisation. Go over the tenant limit and messages bounce with 550 5.7.233, or 550 5.7.232 on a trial, until the rolling window clears.

Behind the numbers sits a policy. Microsoft says Exchange Online customers who need to send bulk commercial email should use third-party providers, and recommends Azure Communication Services for high-volume sending to external recipients. A cold email programme stays welcome by looking like normal business mail: a few dozen emails a day per mailbox, spread across mailboxes and domains.

Cold email on Microsoft 365: what works

Use your own domains, never onmicrosoft.com, and give each one MX, SPF, DKIM and DMARC records at a DNS host such as Cloudflare before the first send. Connect mailboxes to your sequencer, Instantly or Smartlead for example, over OAuth, so the December change passes you by. Plan around the new-tenant ramp: a tenant created today runs at a tenth of its quota for a month, which is fine for warmup and wrong for a launch. Keep volumes per mailbox low, watch bounces, and rotate across mailboxes rather than pushing a few hard, because a mailbox that trips the outbound spam filter is blocked from sending until an admin releases it.

Buying Microsoft 365 inboxes ready to send

Doing all of this yourself costs $4 to $7 a user a month on annual commitments, plus the hours to set up each tenant, its domains and its DNS. PureMail’s Microsoft 365 and Google Workspace inboxes cost $3.30 each for 10, $3.10 for 30 to 100 and $2.90 for 101 or more, on domains you bring, with SPF, DKIM, DMARC and MX configured and the inboxes connected to your sending tool in about four hours. The comparison below sets the two side by side: PureMail wins on price per inbox and the setup you skip, and buying direct from Microsoft wins on admin control.