Exchange Online inbound connector is created in a disabled state

Problem:

When you're configuring Exchange Online connectors automatically in CodeTwo Admin Panel, the wizard shows that the inbound connector has been created in a disabled state:

We’ve detected that the inbound connector for your Microsoft 365 service offering is created in a disabled state. This is done by Microsoft due to Microsoft’s recent policy update that requires some customers to contact Microsoft to enable connectors. [...]

Solution:

This issue is caused by a recent Microsoft policy update and is not related to our software. Microsoft is disabling the ability to create inbound connectors for certain Microsoft 365 plans and tenants (more details at the end of this article).

You need to urgently disable the CodeTwo Exchange transport rule to avoid mail flow blocking and then contact Microsoft to enable the CodeTwo Inbound Connector for you. Follow the steps below. 

1. Urgent: disable the CodeTwo Exchange transport rule

You need to disable the CodeTwo Exchange transport rule in the Exchange admin center to stop routing emails through CodeTwo service. Otherwise, your mail flow will be blocked.

Follow these steps:

1. Sign in to the Exchange admin center.
2. Go to Mail flow > Rules, locate the CodeTwo Exchange transport rule on the list and click it.
3. In the pane that opens, set the toggle switch to Disabled to disable the rule (Fig. 2.).

Fig. 2. Disabling the CodeTwo transport rule in the Exchange admin center.

4. As soon as the changes propagate in your Microsoft 365 (this usually takes up to 15 minutes, but might take longer for larger organizations), your emails will no longer be routed through the CodeTwo services.

2. Contact Microsoft to enable the CodeTwo Inbound Connector

You now need to contact Microsoft support and provide a business justification explaining why you need to enable the CodeTwo Inbound Connector, for example:

I need to enable the CodeTwo Inbound Connector (Exchange Online inbound connector of the OnPremises type) to route our organization's email through the CodeTwo service (CodeTwo Email Signatures for Office 365) to get email signatures.

3. Re-enable the CodeTwo Exchange transport rule

To restore mail flow through the CodeTwo services, access the rule settings pane in the same way as described in Step 1., set the toggle switch to Enabled, and wait for the change to apply. No further configuration is required.

More information about the problem with disabled inbound connectors

The problem described in this article has been reported through Service health in the Microsoft 365 admin center as incident EX505293. It can affect (but is not limited to) tenants created in 2023 that use the following subscription plans: Microsoft 365 Business Standard, Microsoft 365 Business Basic and Exchange Online Essentials.

Initially, the affected tenants could not create inbound connectors at all. However, Microsoft has applied a fix that makes it possible for some of the affected tenants to create inbound connectors, but only in a disabled state (which means such connectors will not work). No matter if customers are creating connectors automatically or manually in EAC, they get the error:

 Inbound connector for this service offering is created in a disabled state. Contact Support to enable it.

As announced in this Microsoft article, to enable the inbound connector, Microsoft 365 customers are asked to contact Microsoft support and provide a business justification for doing so.