Email IQ reports to external recipients

[turne14]

I have an issue currently where we are unable to send IQ reports to external recipients.

We have the receive connector in Exchange configured Basic Authentication and Integrated Windows Authentication, with the permission group being set with Exchange users only.

If I telnet to the Exchange server on port 25 I am able to authenticate and send an email with out any issues, as the below telnet extract shows.

[root@iqturnkey ~]# telnet fa-exchange2010 25
Trying 10.10.2.175...
Connected to fa-exchange2010.innovations.local (10.10.2.175).
Escape character is '^]'.
220 FA-EXCHANGE2010.INNOVATIONS.LOCAL Microsoft ESMTP MAIL Service ready at Wed, 5 Dec 2012 16:28:41 +0000
ehlo
250-FA-EXCHANGE2010.INNOVATIONS.LOCAL Hello [10.15.15.25]
250-SIZE 10485760
250-PIPELINING
250-DSN
250-ENHANCEDSTATUSCODES
250-AUTH NTLM LOGIN
250-8BITMIME
250-BINARYMIME
250 CHUNKING
auth login
334 VXNlcm5hbWU6
aW5ub3ZhdGlvbnNcaXEubWFpbGFjY291bnQ=
334 UGFzc3dvcmQ6
Q2FsbG1lZGk0
235 2.7.0 Authentication successful
mail from: ****.****@azzemailtest.com
250 2.1.0 Sender OK
rcpt to: ****.****@azzu.co.uk
250 2.1.5 Recipient OK
data
354 Start mail input; end with <CRLF>.<CRLF>
subject: testing from IQ via telnet

test email from IQ, when connecting to Exchange via telnet

done

.
250 2.6.0 <fc3ad490-7005-4273-84f5-bc2251a8a304@FA-EXCHANGE2010.INNOVATIONS.LOCAL> [InternalId=17] Queued mail for delivery


However as soon as I enter the credentials into IQ and attempt to email a report at no point in the TCPDump can I see IQ attempt to authenticate with Exchange. Here is the TCPDump from the IQ server when attempting to email a report.

220 FA-EXCHANGE2010.INNOVATIONS.LOCAL Microsoft ESMTP MAIL Service ready at Wed, 5 Dec 2012 16:43:29 +0000

EHLO iqturnkey.azz-innovations.local

250-FA-EXCHANGE2010.INNOVATIONS.LOCAL Hello [10.15.15.25]

250-SIZE 10485760

250-PIPELINING

250-DSN

250-ENHANCEDSTATUSCODES

250-AUTH NTLM LOGIN

250-8BITMIME

250-BINARYMIME

250 CHUNKING

MAIL FROM:<****.****@fa-exchange2010.innovations.local>

530 5.7.1 Client was not authenticated

Has any one else seen this issue before and if so how did you get IQ to authenticate with Exchange correctly?