http://www.mcbsys.com/blog/2011/08/using-office-365-in-an-sbs-2008-environment-take-2/

While editing the Service Connection Point in Active Directory Sites and Services does work, it’s probably not the “approved” way to do things.

The support manager recommended that I instead use the Exchange Management Shell to entirely remove the Autodiscover Virtual Directory using Remove-AutodiscoverVirtualDirectory. Here’s how I did that:

1. Open an elevated command prompt and back up the IIS configuration (explained here):

%windir%\system32\inetsrv\appcmd.exe add backup "Before Removing Autodiscover"

2. Open an elevated Exchange Management Shell and retrieve the current autodiscover virtual directory:

Get-AutodiscoverVirtualDirectory | fl Name, Server, InternalUrl, ExternalUrl, Identity

Save the results to a text file in case you need them to re-set the virtual directory later (see Schyler Jones’ comment below on December 2, 2015). Copy the Identity value to the clipboard.

3. In the Exchange Management Shell, remove the autodiscover virtual directory:

Remove-AutodiscoverVirtualDirectory –Identity "<identity value retrieved above>"

You will have to confirm by typing a “Y”.

4. Check that the autodiscover virtual directory is gone:

Get-AutodiscoverVirtualDirectory | fl Name, Server, InternalUrl, Identity

This should now return nothing.

5. Now, with Outlook running on a desktop, hold the Ctrl button, right-click on the Outlook icon in the system tray, and select Test E-mail AutoConfiguration. Enter your email address and password and click the Test button. The results should come from the Office 365 server.