Microsoft announced on February 12, 2026, a significant change to its Exchange Online PowerShell module: the deprecation of the -Credential parameter for the Connect-ExchangeOnline cmdlet. This change represents part of a broader initiative to enhance security across Microsoft 365 administrative interfaces by eliminating authentication methods that do not support multifactor authentication.

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Microsoft is retiring Exchange Web Services (EWS) in Exchange Online, with a phased shutdown beginning October 1, 2026, and complete retirement by April 1, 2027. You must migrate your applications to the Microsoft Graph API before the final deadline to maintain access to Exchange Online mailboxes. This retirement only affects Exchange Online in Microsoft 365 environments and does not impact on-premises Exchange Server installations. Organizations using EWS-dependent applications face service interruptions unless they transition to supported alternatives. The nearly 20-year-old protocol no longer meets modern security, scale, and reliability requirements.

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Microsoft has introduced the Microsoft Graph User Configuration API that enables you to manage custom settings and configuration data for user mailboxes in Exchange Online. This preview API provides full CRUD (create, read, update, delete) operations for user configuration objects, allowing you to store application state, settings, and metadata associated with specific mail folders. This guide shows you how to access and use this API with PowerShell.

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Microsoft introduced a new PowerShell parameter, ExcludeFromAllHolds, that simplifies removing multiple retention holds from inactive mailboxes in Exchange Online. This capability enables you to remove various retention holds from inactive mailboxes while preserving essential compliance protections such as eDiscovery holds and litigation holds.

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Microsoft has indefinitely canceled the planned limit on bulk email sending in Exchange Online following significant customer feedback about operational challenges. However, Microsoft advises using Azure Communication Services for Email for organizations that require sending large volumes of email to external recipients. 

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Microsoft announced that Exchange Online will block devices using Exchange ActiveSync protocol versions earlier than 16.1 from connecting to its services starting March 1, 2026. This change affects organizations using mobile devices with native email applications to access Exchange Online mailboxes and aims to strengthen security and reliability across the platform. Clients using basic authentication for an affected protocol will be unable to connect to Exchange Online and will receive an HTTP 401 error stating "bad username or password."

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Microsoft is rolling out Auto-Archiving for Exchange Online for public clouds and government clouds. This new threshold-based archiving feature automatically moves the oldest items from a user's primary mailbox to their archive mailbox when mailbox utilization exceeds 90% of the quota, complementing existing time-based archiving policies to prevent disruptions to mail flow.

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Active Directory domain controllers running Windows Server 2025 with the schema master FSMO role may create duplicate schema attribute values when performing Exchange Server schema extensions, causing replication failures across the entire forest. This issue triggers this error message: Error 8418: The replication operation failed because of a schema mismatch between the servers involved. The issue affects environments attempting to deploy Exchange Server cumulative updates or Exchange Server Subscription Edition. Microsoft has acknowledged this as a known issue in KB5065426.

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