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Office 365 / Exchange Hybrid Distribution Group.

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I have run into a problem with allowing outside users to email into an on prem. Distribution Group in a hybrid environment the following is the setting for allowing this on Exchange:

And Next is for office 365:

But when you have a hybrid environment the 365 option is set to "Only senders inside my organization" and when you try to change it:

What's interesting it seems the exchange setting and the 365 setting do not coincide whatsoever. Any suggestions?

Sean


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