Outlook Keeps Asking for Password Credentials
When Outlook is configured for Office 365, the type of authentication is Anonymous Authentication.
For all of you that have been configuring Outlook know that this is not a normal option for Outlook authentication against an Exchange server. We normally have, as shown below, many more options.
Anonymous Authentication is not listed or available as an Option in Outlook
The anonymous option is present in Outlook 2013 but Outlook 2010 and Outlook 2007 do not normally have this option listed. windows 7 is normally not a problem but since there are still many Windows XP installation out there that we need to still support, this can be an issue.
Outlook Keeps Prompting for Credentials
So the problem you may encounter with some XP desktop systems that still need to be supported is that Outlook 2007 or Outlook 2010 will not have this option by default. You may find on forums a repeated suggestion to update the operating system. This is not always a good option as it might break another application installed already or you have already updated but still do not have the Anonymous Authentication option in Outlook.
I had a customer with XP SP3, Outlook 2007 which I upgraded to Outlook 2010 and applied SP1 but still no Anonymous Authentication in Outlook. I did not run anymore updates. Instead I found and ran the following Hotfix from Microsoft (I ran the 32bit version) :
KB Article Number(s): 2791026 Language: All (Global) Platform: i386 Location: (hotfixv4.microsoft.com/.../462115_intl_i386_zip.exe)
KB Article Number(s): 2791026 Language: All (Global) Platform: x64 Location: (hotfixv4.microsoft.com/.../462116_intl_x64_zip.exe)
After running this fix, Outlook would not start until the system was rebooted. Once the system came back up, the Anonymous Authentication option was available in Outlook 2010 .