"Can't connect to Exchange" message appears when using Dynamics 365 App for Outlook

When using Dynamics 365 App for Outlook, you see the following message:

"Can't connect to Exchange".

The rest of the app may load successfully but the ability to track items and use Set Regarding may be missing.

This typically occurs when using a Microsoft Exchange on-premises mailbox and may be caused by one of the following reasons:

Cause 1: OAuth authentication is not enabled in Exchange

Cause 2: There is an issue with the authentication certificate used by Exchange.

Resolution 1: Verify OAuth authentication is enabled in Exchange

1. On the Exchange server, open the Exchange Management Shell.
2. Run the following command:
   
   Get-WebServicesVirtualDirectory | FL server,*auth*
3. Verify the results returned show that OAuthAthentication is set to True.
4. If OAuthAthentication is set to False, a command such as the following needs to be run:
   
   Set-WebServicesVirtualDirectory -Identity "EWS (Default Web Site)" -OAuthAuthenticat
   ion $true
    

   Additional Information

   The identify value is the name of the virtual directory which can be found in the Exchange Admin Center by clicking servers and then clicking virtual directories or by running the following command and reviewing the Name value returned:
   
   Get-WebServicesVirtualDirectory | FL 
   
   More information about this command can be found in Exchange documentation:
   
   Set-WebServicesVirtualDirectory
   https://docs.microsoft.com/powershell/module/exchange/client-access-servers/Set-WebServicesVirtualDirectory?view=exchange-ps
   
   For more details on authentication requirements for allowing an Outlook Add-in to make asynchronous Exchange Web Service (EWS) requests, refer to the following article:
   
   Authentication and permission considerations for makeEwsRequestAsync
   https://docs.microsoft.com/outlook/add-ins/web-services#authentication-and-permission-considerations-for-makeewsrequestasync

5. Run the following command:
   
   Get-OrganizationConfig | FL OAuth2ClientProfileEnabled
   
   If the value returned is False, run the following command:
   
   Set-OrganizationConfig -OAuth2ClientProfileEnabled:$True

6. Also verify your version of Exchange has the update mentioned in the following article:
   
   Can't access EWS from Outlook/OWA add-ins via makeEwsRequestAsync in Exchange Server 2016 and Exchange Server 2013
   https://support.microsoft.com/help/4056329 

Resolution 2: Verify Exchange Certificate

1. On the Exchange server, open the Exchange Management Shell.
2. Run the following command:
   
   Get-AuthConfig | FL
3. Verify the results show IsValid as True
4. Copy the value returned for CurrentCertificateThumbprint and use it in the following command:
   
   Get-ExchangeCertificate -Thumbprint <CurrentCertificateThumbprint Value> | FL
5. Verify the results show the following:
   
   Status = Valid
   
   The current date is within the NotAfter and NotBefore dates indicating the certificate is not expired.
   
   If the prior command does not successfully retrieve the certificate, this indicates an issue with the certificate configuration which may require you to create and configure a new certificate. The following are some resources with steps for creating and configuring a new certificate:
    

   https://support.microsoft.com/help/3089171
   
   https://docs.microsoft.com/Exchange/architecture/client-access/create-self-signed-certificates?view=exchserver-2019

   https://docs.microsoft.com/powershell/module/exchange/organization/set-authconfig?view=exchange-ps

If any changes were required after following the steps above, close and reopen Outlook to see if the issue has been resolved. If the issue persists and your Microsoft Exchange administrator has verified OAuth is enabled and the certificate is valid, it may be necessary to contact Microsoft Support.