Exchange 2016 and CRM Online Email Server Profile Sync Errors

While attempting to setup a Exchange Server (Hybrid) email server profile for CRM online. At the step when testing & enabling mailboxes you may get the following error in the alerts detailed description:

System.Net.WebException: The request failed with HTTP status 401: Unauthorized.
at System.Web.Services.Protocols.SoapHttpClientProtocol.ReadResponse(SoapClientMessage message, WebResponse response, Stream responseStream, Boolean asyncCall)
at System.Web.Services.Protocols.SoapHttpClientProtocol.EndInvoke(IAsyncResult asyncResult)
at Microsoft.Crm.Asynchronous.EmailConnector.ExchangeServiceBinding.EndFindFolder(IAsyncResult asyncResult)
at Microsoft.Crm.Asynchronous.EmailConnector.GetInboxFolderHierarchyStep.EndCall()
at Microsoft.Crm.Asynchronous.EmailConnector.ExchangeIncomingEmailProviderStep.EndOperation()

This error is caused because the EWS virtual directory in exchange does not have Basic Authentication enabled in Exchange 2016 CU2. Enable this and then retry the test. It will now complete without any problems.

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