Adding an Office 365 Exchange Online account in Outlook 2011 for Mac results in error Account cannot be added

When adding an Office 365 Exchange Online account in Microsoft Outlook for Mac 2011 you may receive the following error message:

Account cannot be added. Note that Outlook 2011 requires Exchange Server 2007 SP1 Update Rollup 4 or later.

This can occur if either of the following conditions are true:

• You are attempting to use the temporary password that was assigned to either a new Office 365 Exchange Online mailbox or to an existing mailbox for which the password was reset by an administrator.
• The account has been configured incorrectly within Outlook 2011.

Set a new password on your Office 365 Exchange Online account or mailbox

Before you connect Outlook to your newly created Office 365 Exchange Online account or to an existing mailbox for which the password was reset by an administrator, you must first log in at the Microsoft Office 365 Portal or Outlook Web App (OWA) using a brower. The Microsoft Office 365 Portal page can be accessed using either of the following links:

• https://portal.microsoftonline.com
• https://login.microsoftonline.com

The OWA login page can be accessed using either of the following links:

• https://outlook.com/owa/office365.com
• https://mail.office365.com

Once you log in, you are redirected to a page where you are prompted to change your password. Once you change your password, you can connect using the desktop version of Outlook.

Verify account settings

If you are not using a temporary password to access the Office 365 Exchange Online mailbox, verify that the account information is correct. To do this, use the following steps:

1. Click on the Outlook menu, then click Preferences.
2. In the Outlook Preferences dialog that appears, click the Accounts icon, then click the Exchange Account icon.
3. Confirm the email address used in the E-mail address: box is the correct address for your Office 365 Exchange Online account.
4. In the User name: text box, make sure you are using the same email address from step 3.
5. Re-enter your password in the Password: text box. It is better to manually type it. If you copy and paste the password into this field, you may inadvertently paste extra characters.

To read the Office 365 for enterprises Release Notes, click on the following link to open the article at the following Microsoft web site:

Release Notes for Office 356 for enterprises 

The error message described in the Symptoms section can also be displayed when connecting to an on-premise Exchange Server mailbox and you have entered an incorrect email address. Outlook uses the email address to automatically detect and configure your Exchange Server account.