Today I ran into the following issue. I tried to open a Remote PowerShell session to Exchange Online but the module failed to load with the error message:
New-ExoPSSession : Create Powershell Session is failed using OAuth
Initially I suspected that the customer’s firewall performed some kind of traffic inspection or recognized and denied the traffic as a blocked ‘application’. I was able to browse the internet from this computer and after all Remote PowerShell is just https traffic.
However, the culprit was the proxy server. More specific, I configured a proxy server in the Internet Explorer settings but did not verify if Remote PowerShell observed the same connection settings. And the answer is no, the console does not use the IE settings but falls back to the winhttp configuration. In this environment the firewall configuration did not allow outbound traffic unless it passes through the proxy.
Telling PowerShell to use the proxy server is easy. Open an elevated prompt and use the following command to configure winhttp to use a proxy server and port:
netsh winhttp set proxy proxy.network.tld:8080
To import the settings that where configured in IE:
netsh winhttp import proxy source =ie
And important, to remove the proxy configuration for winhttp:
netsh winhttp reset proxy
Configuring the proxy for winhttp fixed my issue and I was able to connect to Exchange Online with PowerShell successfully.
