I recently came across this error when trying to connect to Microsoft online.
Please see Microsoft’s support article: Article ID: 2494043 http://support.microsoft.com/kb/2494043
The cause can be a number of things:
- The Windows Azure Active Directory Module for Windows PowerShell rich client can’t connect to Microsoft Office 365 resources. This is frequently the result of client computer readiness issues.
- The user name or password that you are using is incorrect or a problem exists with the user account.
- The user ID that’s used to authenticate is single sign-on (SSO)-enabled and a client computer problem is preventing SSO communication to Active Directory Federation Services (AD FS), to the Windows Azure Active Directory authentication system, or to both.
I updated the online services sign in assistant and azure powershell module and everything started working again.