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Understanding Password Encryption

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To protect sensitive data of your Online and on-premises Microsoft organizations, Veeam encrypts the password of every organization added to the scope according to the following:

Encryption is based upon using the machine key generated under the Local System account under which the Veeam.Archiver.Service (display name — Veeam Backup for Microsoft Office 365 Service) is running.
An encrypted key is stored in the configuration database on the Veeam Backup for Microsoft Office 365 management server and replicated to backup proxy servers responsible for processing associated organizations.
An encrypted password can only be decrypted by the Local System account.