Modern Authentication Will Soon be Active in all Office 365 clients
In a blog post, Microsoft announces that in the near future, all managed Office 365 clients created before August 1, 2017, will use "Modern Authentication." This applies primarily to Windows Outlook clients and the logging in to Skype for Business. This change will not affect Outlook Web, Outlook Mobile or Outlook for Mac. These clients have always used Modern Authentication by default.
For the user, the conversion merely means a change in the logon dialog. From the perspective of IT security, however, the authentication changes. Modern Authentication uses OAuth instead of insecure basic authentication. Modern Authentication provides the technological foundation for authentication capabilities such as Multi-Factor Authentication (MFA) and third-party SAML Identity Providers, or automated rule-based access control, for example to applications and data in Office 365.
For federated Office 365 clients - customers who manage, authenticate and use their identities in a local Active Directory - nothing changes. This transition also does not affect Office 365 clients created after August 1. In these mandates, the Modern Authentication is activated by default for all clients.