Failed to send heartbeat to controller

Challenge

Veeam Backup for Microsoft Office 365 Backup jobs fail with the following error:
 

Timestamp 12 (9572) Connecting to organization...
Timestamp 12 (6688) Failed to send heartbeat to controller
Timestamp 12 (6688) Error: Access is denied.

Timestamp 42 (9572) Found: Veeamuser, SMTP: Veeamuser@veeam.com
Timestamp 42 (9572) Trying to obtain license for Veeamuser@veeam.com
Timestamp 42 (9572) Failed to obtain license
Timestamp 42 (9572) Error: Access is denied

Cause

Proxy ID has not been properly reformed during Veeam Backup for Office 365 upgrade from version 1.0 to 1.5

Solution

1. Stop Veeam Backup for Microsoft Office 365 Service and Veeam Backup Proxy for Microsoft Office 365 Service
2. Delete С:\Programdata\Veeam\Backup365\ProxyDb\ and C:\Programdata\Veeam\Backup365\Proxy.xml from Proxy Server
3. Start Veeam Backup Proxy for Microsoft Office 365 Service*
4. Start Veeam Backup for Microsoft Office 365 Service
5. Proxy ID should be synchronized - run the backup

*It is vital to have Veeam Backup Proxy for Microsoft Office 365 Service started before Veeam Backup for Microsoft Office 365 Service, since Controller has the proper information that should be propagated to newly created Proxy database and not a vice-versa.