This account is not supported in Outlook for Windows due to the license provided by your work or school

I finally got my reply from MS support.

"Thank you for your patience. Upon analyzing the error message and the license that has been assigned to your mailbox, we would like to inform you that you are facing this issue due to the license your company choose to purchase. New Outlook will not support the E1 license by design. We understand that this account will not support in new Outlook however you can use the same on OWA [Outlook web app]."

Utterly bonkers. I can use my free emails like Google and Apple, but they deny me using my paid for Business Basic MS email? I can only assume whoever made that decision was on mind altering drugs, or that they have decided to quietly sunset Outlook, despite spending a fortune to update it. Do they really think we are going to think "oh, the thing that we used to get as a part of that subscription is no longer allowed, here have some more money Microsoft so we can do something with you that we can do for free somewhere else?" I suspect we are about to see a boom time for the growth of 3rd party outlook alternatives. Good. I'm not walking away from outlook. I'm running.

Thank you, Microsoft, for this utterly nonsensical change in your licensing application. This was the final push I needed to stop using Hosted Exchange for my domain and my wifes domain.

Been using Hosted Exchange for years. Been really happy with it. But the cost keeps increasing, by removing the Hosted Exchange licensing forced us to adopt Microsoft 365 Business Basic, costing about twice the amount for adding features we never use. The licensing cost keeps increasing almost yearly for no apparent reason.

I've been sticking with it as I prefer Exchange Active Sync over IMAP.IDLE as it handles notifications better. When reading an e-mail on one device, the notification isn't stuck on other devices.

But this finally pushed me to reconsider. We are forced to pay for Microsoft 365 Business Basic twice, just because me and my wife have two different domains. The cost is immense, considering how we use the service. And you keep on bundling additional stuff to increase the price, even though these features has no value to us.

Locking us out of "New Outlook" even though we already pay for access to desktop applications via Microsoft 365 Family, and we both also have desktop applications licensed through our employer, is beyond stupid. This is nickle and diming at it's finest. Requiring you to have a license allowing for desktop application per mailbox instead of the application level is infuriating, to say the least.

Just moved us both from Hosted Exchange / Microsoft 365 over to iCloud+ as we already have this option as part of our Apple One Family subscription. The move was easy, the functionality is pretty much the same, and notifications are working great as Apple doesn't rely on IMAP.IDLE for notifications. This saves us a lot of money per year.

And to just make it all even more silly, guess what? We can utilise "New Outlook" without any issues as it supports adding e-mails from iCloud. So by removing our Microsoft 365 Business Basic subscriptions and moving our e-mail from Hosted Exchange / Microsoft 365 over to iCloud+, we save money, and we are allowed to use "New Outlook".

https://apps.microsoft.com/detail/outlook-for-windows/9NRX63209R7B?hl=en-us&gl=US Guys, look at the rating and reviews. All people are hating this new Outlook specifically because of this license BS. Good! More negative feedback to it, please!

Apparently, I've found a solution of the problem. Actually not a real solution, just a tricky workaround.

I have Microsoft 365 Business Basic Plan and wanted to try New Outlook, but got the same error message as topic starter did. I wrote to Microsoft Support and quite quickly got the answer. They said:

"…please be informed, that the Microsoft 365 Business Basic plan provides access to the Web and mobile versions of Outlook. Unfortunately, the desktop version of Outlook for Windows is not included in this plan. To illustrate, I have attached a screenshot below for your reference."

Of course I wasn't satisfied with the answer because I'm not going to use Office 365 Desktop Applications, I only want to use FREE New Outlook application as a mail client to access my Exchange mailbox the same way like I do that with Mail & Calendar for Windows. I thoroughly explained my standpoint in reply to Microsoft Support and now waiting for their answer.

As a temporary workaround I bought Microsoft 365 Business Standard subscription for a month and (surprise!) I managed to add my Microsoft Business mailbox to New Outlook. After that I canceled new subscription and assigned back my old Microsoft Basic plan. Application works fine.

New Outlook checks subscription type only once before adding account and keeps that information in folder:

<username>\AppData\Local\Microsoft\Olk\EBWebView\Default\Local Storage\leveldb

After adding all accounts to New Outlook I saved a copy of that folder just in case. Even after reinstalling New Outlook it's enough to replace that folder and all accounts are restored.

It's a temporary solution but hope it could be helpful for someone too.

I have the same issue - all of a sudden - as in late last night. prior to that it was working just fine, no issues. I'm on office 365 E1, which has always worked. What is the issue and how do I fix it, as I'm the sole admin on the account.