Office 365 SMTP Email config

CodeIgniter 2.0 (not an option to move up to 3.0 yet), LAMP Server running on Windows Machine (Apache 2.2).

Just migrated to Office 365.

Everything running smoothly except a form that emails out.... I'm receiving the following error message:

Code:

220 BY2PR16CA0040.outlook.office365.com Microsoft ESMTP MAIL Service ready at Fri, 22 Apr 2016 17:53:52 +0000

hello: 250-BY2PR16CA0040.outlook.office365.com Hello [265.136.157.12]
250-SIZE 157286400
250-PIPELINING
250-DSN
250-ENHANCEDSTATUSCODES
250-STARTTLS
250-8BITMIME
250-BINARYMIME
250 CHUNKING

Failed to send AUTH LOGIN command. Error: 504 5.7.4 Unrecognized authentication type
from: 530 5.7.57 SMTP; Client was not authenticated to send anonymous mail during MAIL FROM
The following SMTP error was encountered: 530 5.7.57 SMTP; Client was not authenticated to send anonymous mail during MAIL FROM

to:
The following SMTP error was encountered:

data:
The following SMTP error was encountered:

The following SMTP error was encountered:
Unable to send email using PHP SMTP. Your server might not be configured to send mail using this method.

User-Agent: CodeIgniter
Date: Fri, 22 Apr 2016 19:53:53 +0200
From: 
Return-Path: 
To: [email protected]
Subject: =?utf-8?Q?Testing?=
Reply-To: "[email protected]" 
X-Sender: [email protected]
X-Mailer: CodeIgniter
X-Priority: 3 (Normal)
Message-ID: <[email protected]>
Mime-Version: 1.0

Content-Type: text/plain; charset=utf-8
Content-Transfer-Encoding: 8bit

Testing

Configuration of email config file

Code:

$config['protocol'] = 'smtp';
$config['smtp_host'] = 'smtp.office365.com';
$config['smtp_user'] = '*******';
$config['smtp_pass'] = '*******';
$config['smtp_port'] = '587';
$config['smtp_crypto'] = 'tls';
$config['smtp_timeout'] = '5';
$config['charset']='utf-8'; // Default should be utf-8 (this should be a text field)
$config['newline']="\r\n"; //"\r\n" or "\n" or "\r". DEFAULT should be "\r\n"

Any ideas why this error pops up?