Microsoft identified the issue and has patched it day before yesterday . The message trace logs are back to normal volume now and we arent seeing 401 client error anymore. We have validated it in our environment . Apparently the root cause identified from MS was like they did some changes on one of their system (ECS) on 4th apr that caused some code conflict and sometimes the calls made to microsoft webservice reporting API were getting redirected to Outlook login page which was throwing the 401 error. Hope everyone else has got this working too.😊 Thanks, Sumeet
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