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In order for Office desktop clients, such as Outlook, Skype for Business, to support MFA via federated authentication, your Office 365 tenant needs to be configured to support modern authentication.
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Connect to Exchange Online PowerShell as shown below
Connect to Exchange Online Powershell
On your local computer, open Windows PowerShell and run the following command.
$UserCredential = Get-Credential
In the Windows PowerShell Credential Request dialog box, type your work or school account and password, and then click OK .
Run the following command.
$Session = New-PSSession -ConfigurationName Microsoft.Exchange -ConnectionUri https://outlook.office365.com/powershell-liveid/ -Credential $UserCredential -Authentication Basic -AllowRedirection
Run the following command.
Run the following command in Exchange Online PowerShell:
Set-OrganizationConfig -OAuth2ClientProfileEnabled $true
To verify that the change was successful, run the following command in Exchange Online PowerShell:
Get-OrganizationConfig | Format-Table -Auto Name,OAuth*
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Connect to Skype for Business Online using remote PowerShell as shown below
Connect to Skype for Business PowerShell
Open Windows PowerShell as an administrator (use Run as administrator ) on any machine which has Internet connection.
Run the command below, and enter your Office 365 admin account credentials.
$credential = Get-Credential
Run the script below to import the Skype for Business PowerShell Module:
Import-Module SkypeOnlineConnector
Run the command below to create a new session
$session = New-CsOnlineSession -Credential $credential -Verbose
Finally, import the new session into the Windows PowerShell console.
Import-PSSession $session
Run the following command to enable modern authentication:Set-CsOAuthConfiguration -ClientAdalAuthOverride Allowed
Verify that the change was successful by running the following:Get-CsOAuthConfiguration
Note: to disable modern authentication, run command: Set-CsOAuthConfiguration -ClientAdalAuthOverride NoOverride