You need to create a HOST in the exchange server with user_id and password.
IS will try to login in exchange server with user_id and password defined by you. I suspect that you are getting error because of that as Integration Server not able to establish the connection with exchange server.
After completion of above task you can put your flow service name in Global service or default service as per your requirement.
Please check if the proxy rules and firewall ACLs are correctly created for production server to exchange server. Since the mail is going out over internet outside your organisation via firewall , a rule must exist to allow that.
The port , source IP must be created in outbound firewall rule.
Perform some basic network test. Let us know your findings.
We are using implicit SSL in our IS with 993 as default IMAP port and adding below parameter in startup script
-DWM_HOME=“%WM_HOME%” -Dmail.imap.socketFactory.class=javax.net.ssl.SSLSocketFactory