Install Internet Information Services (IIS)
Add Roles > Next > Web Server (IIS) > Install > Select the following
ODBC Logging,
IIS Metabase Compatibility,
IIS 6 Management Console
Install SMTP server role
Add Roles and Features > SMTP Server >
Setup SMTP
Start > Administrative Tools > Internet Information Services (IIS) 6.0 > SMTP Virtual Server > Properties
Advanced > Add > enter IP address > OK
Under Access tab, ensure Anonymous Access is selected
On Connection, ensure Only the List Below is selected
On Relay, ensure Only the List Below is selected
Delivery tab > Outbound Security > Basic Authentication > enter Office 365 account name and Password > TLS Encryption
Outbound Connections > TCP 587 > OK
Advanced > specify smtp.office365.com as Smart host > OK > Restart SMTP services
Test by dropping Email.txt with the following content at C:\InetPub\MailRoot\Pickup\ folder.
FROM: test@my.domain.com
TO: user@my.domain.com
SUBJECT: Test email in the subject line