A widespread outage affecting Microsoft 365 entered its third day this week, with users of Outlook, Teams, SharePoint and OneDrive for Business continuing to report intermittent access problems even as Microsoft said most of the disruption had been resolved.

Microsoft said the outage, which it is tracking under incident number MO1465074, began at 3:08 p.m. UTC on Monday, Aug. 31. The company attributed the root cause to a problem in a core authentication configuration shared by multiple Microsoft 365 services, rather than an issue limited to a single product.

"The root cause of the outage is an issue within a core authentication configuration used by multiple Microsoft 365 services," the company said in a status update. It added that the disruption had led to a broader service degradation designation for Microsoft 365 Business and Enterprise customers.

Outlook was among the first and most visibly affected services. Users reported delays and failures when sending and receiving email, as well as authentication errors and problems searching mailbox content. Reports on the crowdsourced outage-tracking website Downdetector began rising sharply at around 11:30 a.m. ET on Monday and exceeded 5,000 by early afternoon. Further complaints appeared across social media throughout the day.

Microsoft said its initial investigation indicated that a misconfiguration was affecting the way authentication components were deployed across part of its infrastructure.

"Our investigation indicates that a misconfiguration issue may be preventing authentication components from deploying as expected to a portion of infrastructure, and we're reexamining recent changes made to the service to determine why this is occurring," the company said in an update posted to its Microsoft 365 Status account.

As the outage continued into Monday evening, Microsoft confirmed that its impact extended beyond Outlook and Exchange Online, the email and calendar service used by millions of businesses. OneDrive for Business, SharePoint Online, Microsoft Teams, Microsoft Purview and Microsoft Defender XDR were also affected, along with the Microsoft 365 Admin Center and Universal Print.

"Additionally, we've confirmed that the authentication component issue impacts other services beyond Exchange Online," Microsoft said, directing customers to its status page for details on how each affected service was behaving.

By Tuesday, the outage had not been fully resolved. Microsoft continued issuing updates as engineers worked through a remediation process that included restarting affected infrastructure and reapplying a targeted fix to the authentication systems at the centre of the problem.

"Our mitigation actions are continuing to progress within the remaining affected infrastructure," Microsoft said in a Tuesday update. "Indications from telemetry remain positive, and we've confirmed service availability is improving. We're entering a period of extended monitoring to ensure a full resolution is in place."

The company's updates throughout the incident pointed to a gradual and uneven recovery rather than a single, definitive fix. This pattern is consistent with previous large-scale Microsoft 365 outages, which have often required extended monitoring even after initial telemetry indicated improvement.

By early Wednesday morning, Microsoft said conditions had stabilised significantly for most customers.

"Service availability remains stable above 99 percent," Microsoft said in a status update posted at 6:29 a.m. ET on Wednesday. It added that "the majority of users should no longer be seeing impact from this issue."

Scattered reports of continuing problems nevertheless emerged throughout Wednesday. Outage-monitoring websites recorded renewed spikes in complaints specifically involving Microsoft Teams, indicating that while the broader authentication issue had largely subsided, some customers and services were still experiencing residual effects.

Microsoft 365, the cloud-based subscription suite formerly known as Office 365, provides access to productivity applications including Word, Excel, PowerPoint, Outlook and Teams. It also includes enterprise services such as SharePoint and OneDrive, which many businesses use for document storage, collaboration and internal communication. Because so many organisations depend on these tools for daily operations, outages affecting the platform can generate widespread public complaints and business disruption. Authentication failures can be particularly disruptive because they may prevent users from accessing several services at once rather than affecting a single feature.

This week's incident adds to a series of significant Microsoft 365 disruptions in 2026. In January, a separate outage linked to authentication and mail-flow problems in North American infrastructure lasted about 10 hours, affecting Outlook, Defender and Purview before Microsoft confirmed that the impact had been resolved. At the height of that incident, Downdetector recorded more than 15,000 reports, while some affected businesses described significant disruption to daily operations, including delayed communication with clients.

Independent monitoring services that track Microsoft 365 uptime have noted that the platform has experienced several major disruptions in recent years, generally lasting from a few hours to, in more serious cases, nearly a full day. Analysts who study cloud infrastructure reliability have identified the growing complexity of large, interconnected cloud platforms as a continuing challenge for major providers, despite heavy investment in redundancy and failover systems designed to prevent widespread service degradation.

Microsoft has not yet published a full post-incident report explaining the technical root cause of this week's authentication misconfiguration or detailing steps to prevent similar disruptions in the future. Such reports typically follow major outages after monitoring periods end and engineering teams complete a full review.

For now, Microsoft continues to direct affected customers to its official Microsoft 365 Status page and social media account for the latest information. The company has also warned that some users may still experience intermittent effects even as overall service availability remains above the 99% threshold reported on Wednesday morning.

Originally published on ibtimes.com.au