Exchange backup fails after upgrading to Veeam Backup for Microsoft 365 v5

After upgrading Veeam Backup for Microsoft 365 to v5, backup of Exchange Online data may fail with “Unauthorized (401)” error.

The issue affects organizations using Modern authentication and legacy protocols with application secret. 

Starting v5 Veeam Backup for Microsoft 365 has switched to the SOAP Autodiscover service for resolving users during Exchange backup. To use this API, the application used for the organization’s backup must be assigned with the full_access_as_app permission. 

To add the "full_access_as_app" permission to your Azure AD app registration, do the following:

1. Sign in to the Azure portal
2. Go to Azure Active Directory > App registrations, and select your application.
3. Select API permissions > Add a permission > APIs my organization uses
4. Select Office 365 Exchange Online API in the list, go to the Application permissions tab and select the "full_access_as_app" permission.