The outage began at 07:20am GMT (12:50pm IST) and continued to affect users across the region for more than 12 hours, preventing them from sending and receiving emails, Microsoft said in a blog post on its Office 365 security site.
Microsoft said the issue involved part of the company's Internet traffic load-balancing system which was gobbling up server capacity despite no apparent increase in user traffic.
Outage reports were concentrated in Western Europe and Britain, according to DownDetector.co.uk, an outage reporting site. No other major Microsoft online services appeared to be affected.
© Thomson Reuters 2017