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Office 365 Exchange Online: Set Up and Manage Exchange Online. Are you struggling to set up and manage Exchange Online in your Office 365 environment? This comprehensive guide is divided into 5 sections. It covers all aspects of Office 365 Exchange Online setup and management.

Section  overviews Exchange Online (license requirements and features).

Two, guides you through signing up for the Microsoft 365 subscription that includes Exchange Online. We also cover the steps to add and configure custom domains.

Furthermore, the article explores creating and managing mailboxes. Additionally, we discuss advanced topics (setting up mobile device mailbox access policies, public folders, and mail flow settings).

By the end of this article, you have a comprehensive understanding of how to set up and manage Exchange Online in your Office 365 environment.

Set Up and Manage Exchange Online in Office 365: Features and Requirements

Office 365 Exchange Online is a cloud based messaging service that delivers email, calendar, and contacts. A subscription service, and it offers similar features to the on-premises version, Microsoft Exchange 2019.

Users access their emails and calendars on Outlook mobile, desktop, and web. They need an Exchange Online license to do so.

So, Exchange Online is available as part of Microsoft 365 for business and Microsoft 365 for enterprise subscriptions. Alternatively, you subscribe to it directly by purchasing an Exchange Online Plan.

Well, Exchange Online some settings are configured in Microsoft 365 admin portal while others are done via the Exchange Online admin portal.

Some Exchange Online configurations are only performed in the Microsoft 365 admin portal, such as adding and verifying domains. However, Advanced mail configurations must be completed in the Exchange Online admin portal.

In this guide, we use both portals to configure Exchange Online.

Task 1: Manage Exchange Online Set up and Configuration in Office 365

This section discusses setting up and configuring Exchange Online.

Topics covered: how to get a subscription for Exchange Online and how to add and configure a custom domain for your organization’s emails.

Step 1: Buy an Exchange Online Plan

Well, Microsoft 365 subscriptions include Exchange Online. However, there’s another option: Consider getting a Microsoft 365 Business license. With this option, you receive a custom domain (name@yourbusiness.com) and up to 1 TB of cloud storage per user, all included in the basic license of Microsoft 365.

Additionally, Microsoft Business subscriptions offer standard apps like Outlook, Word, and Excel.

To purchase it, visit the “Grow your business with Microsoft 365” page. Both, Exchange Online and Microsoft 365 licenses are assigned on a per-user basis.

Step 2: Add and Verify a Custom Domain in Microsoft 365

Next, add and configure a custom domain. By adding your organization’s domain name (e.g., companyname.com), you create email addresses using that domain for your users.

Follow these steps to add and verify your organization’s domain name to Microsoft 365. 

1. Sign in to Microsoft 365 admin portal- admin.microsoft.com.

2. When the Domains page opens, click “+ Add domain.” The “Add Domain” workflow opens. 

3. Add the domain name on the workflow’s first page. Click “Use this domain” once you finish and wait for the next stage to load.

4. Once the “Verify you own your domain” page loads, click “Verify.” This action prompts Microsoft 365 to automatically detect your domain’s registrar and display the verification page to confirm ownership.

Since Cloudflare manages the domain I added in step 3, Microsoft opened the corresponding page, as shown in the step 5 screenshot below.

5. To authorize Microsoft 365 to add the TXT record, click “Authorize.” You must sign in to your domain’s registrar.

6. After verifying domain ownership in the “Add domain” workflow, you are directed to the “How do you want to connect your domain?” page. To automatically update Microsoft DNS records, click “Continue.”

Alternatively, if you prefer manual record management, click “More” and select your desired option. In this example, let’s click “Continue.”

7. On the Microsoft 365 “Add DNS records” page, locate and click on “Add DNS records.”

8. The workflow opens your DNS registrar’s page and prompt you to authorize adding DNS records. Click on “Authorize.”

Microsoft 365 proceeds with verifying your domain.

Before you proceed, making the domain you just added the default domain is a good idea. See the screenshot below.  

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Task 2: Set up, Configure, and Manage Office 365 Exchange Online Mailboxes

Once your organization’s Exchange Online subscription and domain names are done, next is to add mailboxes. This section guides you through creating user and shared mailboxes.

Moreover, a dedicated subsection specifically addresses the addition of contacts, meeting rooms, and equipment, providing comprehensive guidance for managing essential resources.

It is important to note that user mailboxes are added through the Microsoft 365 admin portal. However, once added, you conveniently manage them from the Exchange Online admin portal.

Use the Microsoft 365 Admin Portal to Add User Mailboxes

1. Sign in to the Microsoft 365 admin portal- admin.microsoft.com
2. Sign in, click the “Users” menu, then click “Active users.”

3. When the “Add users” page opens, click ‘Add user’ if you want to create a single user. Alternatively, click ‘Add multiple users’ to create more user.

4. Complete all the required tasks in the ‘Add user’ workflow. This workflow allows you to assign a Microsoft 365 license to the user.

Additionally, choose the domain you want to assign to the user for email and login purposes.

Use the Exchange Online Admin Portal to Add Shared Mailboxes

1. Sign in to the Exchange Online Admin portal : admin.exchange.microsoft.com.
2. After signing in, expand the “Recipients” menu and select “Mailboxes.”

3. Next, proceed to click on “+ Add a shared mailbox” on the “Manage mailboxes” page.

4. In the “Add a shared mailbox” flyout, provide the required information, and click “Create” to finalize the process.

On the confirmation page add users. However, I recommend completing this task instead of postponing it, to ensure a smooth process.

Add Contacts, and Resources in Exchange Online

It’s important to note that you can also add Contacts in Exchange Online.

While mailboxes are used for users within an Exchange Online organization, Contacts enable you to include individuals outside your organization, facilitating easy discovery and email communication.

Furthermore, users within your Exchange Online organization also schedule meetings and share calendars with Contacts, enhancing collaboration and productivity.

To add Contacts in Exchange Online, sign in to admin.exchange.microsoft.com portal.

After signing in, navigate the menu and click “Recipients.” From the available options, choose “Contacts,” then click “Add a mail contact.”

Exchange Online allows you to create Resources: room mailboxes and equipment mailboxes, alongside mailboxes and contacts.

A room mailbox is a physical location (conference room or boardroom). 

Equipment mailboxes, on the other hand, are assigned to non-location-specific resources (projectors, laptops, or audio visual equipment). They streamline resource reservation and management.

Read more about it here: “Manage resource mailboxes in Exchange Online.”

Resources, such as room and equipment mailboxes, are found in the “Recipients” menu of the Exchange Online. To create a room or equipment mailbox, navigate to the “Resources” page and click on the corresponding option.

Task 3: Set up, Configure, Manage Basic Features of Office 365 Exchange Online

To ensure the efficient functioning of Exchange Online, specific settings may require configuring. For instance, you may need to set up Message trace and Mail Flow Rules.

Furthermore, it may be necessary to configure Remote Domains and Create Connectors. Rea more below.

Configure and Manage Message Trace in Exchange Online

When users send emails in an Exchange Online organization, the emails undergo a specific process as they transition from the sender to the receiver. Here, Exchange Online actively tracks and records their movement.

Based on the recorded email flow info admins effectively determine the status of each email within Exchange Online. They identify whether Exchange Online has received, deferred, rejected, or delivered an email through the process known as “message trace.”

Message traces tracks the flow of emails within an Exchange Online organization. Microsoft provides 5 default and commonly used message trace queries, empowering administrators to generate reports on message flows.

Moreover, admins create custom message traces tailored to their specific needs. To access and manage message traces, expand the “Mail flow” menu and navigate to the “Message trace” node.

Upon accessing the “Message trace” page, you find “Default queries” tab, where comprehensive reports based on the predefined queries are viewed. Additionally, to create your own message traces, simply click the “+ Start a trace” button to initiate the process.

Configure and Manage Mail Flow Rules in Exchange Online

While mail flow occurs automatically, organizations may require the creation of custom mail flow rules (also known as transport rules). Consequently, they effectively identify and take action on message flows.

To understand mail flow rules, compare them with Inbox rules available in Microsoft Outlook. However, the distinction lies in the fact that Inbox rules act on emails already delivered to a user’s inbox, whereas mail flow rules affect email messages while they are still in transit.

Read more about it here: Mail flow rules (transport rules) in Exchange Online.”

To create mail flow rules in the Exchange Online Admin portal, begin by expanding the “Mail flow” menu. Then, proceed to select “Rules” from the menu items and click “+ Add a rule” to initiate the rule creation process.

Set up and Manage Remote Domains in Exchange Online

Organizations frequently exchange emails both internally and with external users. Consequently, IT admins may seek to manage the content and format of messages sent by users to recipients outside the organization.

For example, IT managers may wish to restrict users from forwarding messages to external recipients. Similarly, organizations may opt to block their users from receiving auto-reply messages.

Businesses implement remote domain rules for various reasons (controlling message flow to or from another organization and defining the message format for external recipients).

Please read more about it here: “Remote domains in Exchange Online” link.

If you are responsible for creating remote domain rules in Exchange Online, follow these steps:

1. Expand the “Mail flow” menu.
2. Select “Remote domains”.
3. Click the “+ Add a remote domain” button and proceed with the workflow to complete the procedure.

Configure and Manage Connectors in Exchange Online

The default mail routing in Exchange Online is best setting for most organizations. However, certain businesses need custom mail routing (like routing emails based on sender, recipient, or message content, allowing for more granular control over their email flow).

Additionally, organizations establish connectors between Office 365 Exchange Online and their on-premises email server.

By offering connectors and mail flow rules, Exchange Online empowers businesses to enhance email efficiency and tailor the flow according to their preferences.

To create or manage connectors in Exchange Online, follow these steps:

1. Expand the “Mail flow” menu and select “Connectors.”
2. Click the “+ Add a connector” button and follow the wizard to determine the origin and destination of the connector and complete the process.

Task 4: Set up, Configure and Manage Advanced Features of Office 365 Exchange Online

Previous section “Task 3,” covered basic Exchange Online configurations. Now, cover advanced section setting.

Configure and Manage Organization Sharing in Exchange Online

When establishing organization relationships between two federated Exchange organizations to enable calendar sharing, there are 2 configuration options: Organization and Individual.

Organizational allows users to share calendars with external users within the specified domain. But individual enables users to share their calendar and contact information with individuals outside their Exchange organization.

By implementing the Individual sharing policy in Exchange Online, users share calendars with friends, family members, or individuals in another Microsoft Exchange organization.

Before configuring federated Exchange organizations to share calendar free/busy information with other organizations, you must “Configure a federation trust” first. 

Exchange Online admins configure calendar sharing by accessing the Organization -> Sharing page.

Configure and Manage Automatic Mailbox Email Forwarding in Exchange Online

While users have the ability to configure automatic email forwarding in their inboxes, admins accomplish this task through the Exchange Online Admin portal. Email forwarding configuration on the Exchange Online portal is performed on an individual email basis.

Furthermore, emails are forwarded to an internal or external email address. Additionally, the configuration setting offers the option to deliver messages to both the forwarded address and the inbox.

To enable email forwarding in an Exchange Online mailbox (user or shared), navigate to the “Recipients” section.

Then, select the desired mailbox and access the “Email forwarding”. Finally, toggle the “Forward all emails sent to this inbox” switch, complete the necessary configuration and click “Save changes.”

Task 5: Set up, Configure and Manage Other Features of Office 365 Exchange Online

Final section touches the additional essential configurations in Exchange Online. As such: setting up access policies for mobile devices, managing Public Folders, and the crucial task of configuring hybrid environments.

Configure and Manage Mobile Device Mailbox Access Policies in Exchange Online

Mobile devices present a significant data security threat to organizations. To protect your Office 365 environment, we recommend following our Office 365 Security Best Practices guide.

Exchange Online offers the option to create mobile device mailbox policies such as minimum password length and password enforcement.

Find out more here: “Mobile device mailbox policies in Exchange Online.”

To create a policy for your organization, navigate to the “Mobile” menu in Exchange Online. Select “Mobile device mailbox policy” from there and click “+ New” to get started.

Configure and Manage Public folders in Exchange Online

Microsoft designed Public folders in Exchange Online to enable teams to collect, organize, and share information. Moreover, Public folders allow organizations to arrange content in hierarchical formats, facilitating easy access for members.

Specifically, businesses utilize this tool as an archiving method for emails sent to distribution groups. Well, with distribution groups, a Public folder is mail-enabled.

If a folder is mail-enabled, admins add it as a member of a distribution group. In this scenario, when an email is sent to the group, it automatically gets added to the public folder, allowing members to refer to the emails later.

More information is found here: “Public folders in Microsoft 365, Office 365, and Exchange Online.”

When you’re ready to create and manage Public folders in Exchange Online, including mail-enabled folders, click on “Public Folders” in the menu.

Configure and Manage Configure Hybrid Setup in Exchange Online

To learn more about configuring a hybrid deployment and how to use it follow: “Learn more about configuring a hybrid deployment.”

Alternatively, to go straight into the hybrid setup, navigate to “Settings” in Exchange Online and click on “Hybrid setup” to launch the wizard.

Office 365 Exchange Online: Set Up and Manage Exchange Online Conclusion

In conclusion, this guide has provided valuable insights into setting up and managing Exchange Online in your Microsoft 365 environment.

We began with an overview of Exchange Online features and requirements, establishing a solid foundation for successful implementation.

To simplify the setup process, the article was organized into tasks.

Task 1 focused on managing the setup and configuration of Exchange Online. Task 2 offered step-by-step instructions for setting up, configuring, and effectively managing Exchange Online mailboxes.

Moving forward, task 3 explored the setup, configuration, and management of basic features in Microsoft 365 Exchange Online.

Lastly, task 4 delved into the setup, configuration, and management of advanced features, empowering you to unlock the full potential of Exchange Online. The article also included task 5 where we discussed configuring additional Exchange Online features. 

By following the guidelines presented throughout the article, you are now well equipped with the knowledge and tools to successfully set up and manage Exchange Online in your Microsoft 365 environment. Enhance collaboration, streamline communication, and drive productivity within your organization with this tool.


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Victor Ashiedu

Victor Ashiedu

Victor is an IT pro based in Manchester, UK. With over 22 years of experience managing Windows Server, Active Directory, and Powershell, and 7 years of expertise in Azure AD and Office 365, he's a seasoned expert in his field. When he's not working, he loves spending time with his family - a wife and a 5-year-old. Victor is passionate about helping businesses succeed in today's fast-changing tech landscape.

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