These are all great suggestions in general for simple straightforward applications, however the way MS implements Exchange Online is anything but simple or predictable. I will try to address these individually: Challenge with packet capture method: the sessions are sometimes very long, lasting hours if not days, generating massive amount of data. Besides, I am pretty sure that PAN identifies the application correctly. The disconnects look just like a normal finished TCP session, there are no denys in the logs. Challenge with watching traffic between source and destination: what is the destination? MS publishes lists of public IPs which are supposed to correspond to the various cloud services they offer, however these lists are not well-maintained and change rapidly. Some of the MS cloud addresses are on a 2-min TTL. We also observed a number of IPs serving Exchange Online which were outside the published ranges. Challenge with allowing all traffic and then narrowing it down to just the application: MS serves a lot of different products on the same IPs and ports, including some we do not want to enable (e.g. Sharepoint Online, aka SkyDrivePro.) The AppID is really the best and only effective way to enable just the app you want. For the most part we have the service enabled, however there are still some minor challenges (e.g. occasional disconnects) which is why I was hoping that PAN offered a formal tested and recommended guide for implementing O365.
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