We've got an on-premise SharePoint farm that sends and receives email via an SMTP instance on one of the servers which relays to our on-premise Exchange.
We're in the middle of a migration to Exchange Online. I've created my Inbound and Outbound Connectors. The Outbound Connector works fine, and the Inbound Connector works fine as well, but I believe I'm using a suboptimal configuration, and it may be by necessity.
Before Exchange Online, I set up remote domains in SMTP for every TLD that we might send email to, with the smarthost set to our internal Exchange server. Since this is an international company, we'd have people using addresses with more than just .com, so I started setting up some of the other TLDs we'd require. This seemed inefficient to me but I let it pass at the time since it wasn't working without the domains.
Now that I'm working on connecting this to Exchange Online instead, I have the same problem and I'd like to fix it. If I change the smarthost settings for the *.com domain, provide the proxy account's credentials with TLS, and kick over SMTP, SharePoint can now send alerts to that domain, but if I remove all the remote domains but duplicate the settings from the remote domain pages into the Delivery tab (authentication credentials in Outbound Security, smarthost settings in Advanced), all I get are 550s.
I'm suspicious that the fault lies with DNS but I'm not sure it's a problem we can correct at the moment. This SMTP server is running on one of the SharePoint servers, and SharePoint is receiving email at its host address (wfe.sharepoint.com as an example), but we don't publish an MX record for that address (we don't allow people to send email to SharePoint directly, instead we give them distribution lists which separate the two layers).
So, is this fixable, or is it a situation I just have to live in this environment?