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Note that it may take up to two hours before Office 365 recognizes the change.
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Note that there is no need to force directory replication using AAD Connect. Fast-forward to Exchange 2013, and public folders are now stored in public folder mailboxes, which are hosted in regular mailbox databases. Once this is done, the cloud users can become a delegate for on-prem users. For instance, a public folder database cannot be part of a DAG, and it relies on its own replication mechanism to replicate data across multiple public folder databases (if configured). Get-ADUser -Properties msExchRecipientDisplayType | where The following on-prem cmdlet will change the value for a particular mailbox: This value must be changed to -1073741818. The default value on-prem for a mailbox that has been migrated to Exchange Online is -2147483642. This will allow the cloud user's mailbox to become ACLable. If you want to allow a cloud user to become a delegate of an on-prem user, you need to reconfigure the msExchRecipientDisplayType attribute for the remote user in on-prem AD. An Office 365 user who is not represented by an on-premises messaging user AD object will not be able to access the legacy on-premises public folder. This is all you need to allow an on-prem user to become a delegate of a cloud user's mailbox. Users whose mailboxes are migrated to Exchange Online required access to the public folder hosted on Exchange 2010 Server (on-premise). Like Public Folders in Exchange, Office 365 has Groups where a set of selected Office 365 users can collaborate and share through common resources, such as Outlook Inbox, Calendar, etc. Set-OrganizationConfig -ACLableSyncedObjectEnabled $true In on-premises Exchange, Public Folder is the native mailbox and thus, a user is required to migrate Public Folders separately to Office 365. To enable cross premises delegation you first need to configure it in Exchange on-premises EMS with the following cmdlet: Gone are the days when you had to migrate users with delegated permissions at the same time to keep delegation working when migrating to Exchange Online. This is being rolled out to all Office 365 tenants by the end of April 2018.
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I'm happy to say that this is finally becoming a reality. Exchange hybrid organizations commonly ask about delegating mailbox permissions between on-premises and cloud users.