SMTP setup issues

I am currently in the process of evaluating the ManageEngine Application Manager product, and am currently having an issue with the email alerts.

When ever I try and configure the SMTP server settings using the Application Manager wizard, and I click the Test SMTP Server button (after entering the relevant SMTP settings provided by our IT department). I keep getting the following error message;

Error: javax.mail.AuthenticationFailedException: 334 VXNlcm5hbWU6

I can telnet successfully to our internal SMTP server from the VM that Application Manager is installed on, so I doubt very much that it's a firewall issue or that I'm using the wrong details.

Could someone please help and advise.