After manually entering the Server Name (URL) for Office 365, validation fails with a "401 Unauthorized" error.
This can occur if the Server Name in the URL (the first part after https://) when you are connected to Outlook differs from the Server Name in the URL when you are connected to the Exchange Control Panel (ECP)
Or there is no Office 365 mailbox created for the Target user.
Due to the fact that Office 365 mailboxes may be spread across multiple Office 365 servers, all efforts should be made to use Auto-Discovery instead of manually entering the Server URL in the Migration Settings.
If the Server URL is entered and a 401 error is displayed, verify if the Server Name in the URL when connected to Outlook is different than the Server Name in the URL when connected to ECP:
Create a Office 365 mailbox for the Target user that is failing with the 401 error.