How does Microsoft view subdomain separation?

Microsoft views subdomain separation favorably as an organizational practice but treats subdomain reputation somewhat connected to parent domain reputation. Using marketing.example.com versus transactional.example.com helps Microsoft understand your different mail streams.

However, Microsoft does not fully isolate subdomain reputations. Severe reputation damage to one subdomain can spill over to others under the same parent domain. The separation provides organizational clarity rather than complete reputation isolation.

Best practices include using consistent subdomains for specific mail types, authenticating each subdomain properly with its own DKIM keys, and including subdomains in your DMARC policy. This structure helps Microsoft categorize your mail correctly while building appropriate reputation for each sending purpose.