stop and disable all exchange services on the sbs server (since exchange is no longer being used)
if you have a forward lookup zone for your primary email domain in the sbs dns manager, make sure you add all the same dns records for office 365 to your local dns server that you have configured on your public dns host, if any of those records already exist in sbs dns, but point to your sbs server IP, delete them.
enable advanced settings in the dns manager and clear the dns cached lookup for your email domains
make sure your dns forwarders in dns management are correct, that they forward to a reliable external dns server.
check the PC's host file to make sure nobody made a dumb move and entered in a hostname that email requires and pointed it to your sbs server IP.
make sure the users Outlook/Office is fully patched
make sure the PC has properly configured DNS servers either via DHCP server or manually assigned. Im assuming you have a domain so the only dns they should have should point to your sbs server.
flush the dns cache on the users PC.
clear the credentials from the credential manager again and re-enter when you launch outlook.
under outlook account settings, click repair to repair the connection for the account
if the issue still persists, use nslookup on the users PC to verify the PC is resolving all mail records correctly.
if the issue persists, hold ctrl, right click the outlook system tray icon and choose to test autoconfiguration, verify everything points to office365 services and not sbs.
