Outlook cannot find the server. Verify the server information is entered correctly in the Account Settings, and that your DNS settings in the Network pane of System Preferences are correct.

Tested with this same type of error in iMac (Yosemite - 10.10) and MacBook (Mountain Lion - 10.8) both running the Office 2011 for Mac with the latest updates applied, and this only happens for Outlook.com / Live.com / Hotmail.com emails...

I verified that Outlook for Mac does not allow TLS, only SSL and I believe this is the root of the problem...

• When setting the same emails with the native Mail app for Mac OS X, then it works flawlessly, what an irony!