why do Service Desk Manager 17.1 mail notifications not work intermittently and hit threshold limits when using Office 365 email server

Document ID : KB000123081
Last Modified Date : 17/12/2018
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Introduction:
With Service Desk Manager (CA SDM) 17.1 there is in built support for SSL based communication with SMTP servers. One such SMTP server is Office 365 (Exchange Online,  NOT on-premise install) which is hosted by Microsoft.
Question:
When CA SDM Email notification option is configured to use such an account, the outgoing mail notifications do not work intermittently and hit threshold limits when using Office 365 email server?

Service Desk notification history shows that the notification was sent out, but it is not received by any recipient. In NX_ROOT\site\mail_undeliverable, many emails remain and possible the mail_queue folder would have a high count too.  

NX_ROOT/log/mail_nxd.log shows entries like:
2018-10-22 14:02:38:543 ERROR 19:02:38.543UTC [mailNxdActorSystem-akka.actor.default-dispatcher-14270] c.c.S.m.NXMailMailerActor - Mail sending failed. Reason: com.sun.mail.smtp.SMTPSendFailedException: 432 4.3.2 STOREDRV.ClientSubmit; sender thread limit exceeded [Hostname=1234.namprd06.prod.outlook.com] 

2018-10-22 14:02:38:543 ERROR 19:02:38.543UTC [mailNxdActorSystem-akka.actor.default-dispatcher-14270] c.c.S.m.MessageProcessorChildActor - Failed to send mail. Reason: com.sun.mail.smtp.SMTPSendFailedException: 432 4.3.2 STOREDRV.ClientSubmit; sender thread limit exceeded [Hostname=1234.namprd06.prod.outlook.com] 

2018-10-22 14:02:38:543 ERROR 19:02:38.543UTC [mailNxdActorSystem-akka.actor.default-dispatcher-14270] a.actor.OneForOneStrategy - 432 4.3.2 STOREDRV.ClientSubmit; sender thread limit exceeded [Hostname=1234.namprd06.prod.outlook.com] 

com.sun.mail.smtp.SMTPSendFailedException: 432 4.3.2 STOREDRV.ClientSubmit; sender thread limit exceeded [Hostname=1234.namprd06.outlook.com] 

at com.sun.mail.smtp.SMTPTransport.issueSendCommand(SMTPTransport.java:2267) 
Answer:
This is due to stricter restrictions that Microsoft is enforcing on Office 365 / Exchange Online type of hosted (NOT on-Premise) servers.

See below articles:
https://blogs.technet.microsoft.com/exchange/2018/04/20/changes-coming-to-the-smtp-authenticated-submission-client-protocol
https://docs.microsoft.com/en-us/office365/servicedescriptions/exchange-online-service-description/exchange-online-limits

Service Desk normally does send a decent amount of emails (depends on the usage/configuration of a given SDM setup), and SDM cannot control the limitations on the mail server.  Throttling the amount of emails cannot be considered as seriously too, as that might get to a point where the emails might be delayed by hours, which, is not acceptable by many customers.

Microsoft's recommendation, in the above provided document, for avoiding the new restrictions on the mail accounts: 
1) Use a different mailbox for each application or device. 
2) If there is a possibility that SDM is set to send thousands of copies of the same message (for example, a newsletter) in parallel using a third-party application, send it out in batches or use distribution groups. 
3) If time is important (for example, an alert system that generates multiple alerts at the same time), use a third-party delivery service that's designed to send large amounts of email. 

Based on the recommendations above:
#1 does not apply to the SDM notifications case as normally SDM permits only one outgoing email address with default Email configuration.
#2 is not really applicable as we do not send thousands of copies but thousands of different emails

The final option that seems more reasonable and worked among customers is to use an on premise SMTP server that does not enforce such stringent restrictions as Microsoft is doing right now.
Additional Information:
Note:  Restrictions enforced by Microsoft could change any time. Review and work with Exchange administrators for any additional configuration changes that are needed to be considered.