The following non-delivery report:
This message wasn't delivered to anyone because there are too many recipients
means that the number of recipients exceeds the limit set on the sender's side.
The Diagnostic information for administrators section also contains the list of recipient with the following error message:
#550 5.5.3 RESOLVER.ADR.RecipLimit; too many recipients ##
Smarsh Hosted Services recommends not to send to more than 200 recipients at a time. The limit can be changed under Services > Exchange Mailboxes > username > Advanced Settings > Limits:
As a workaround, you can create a Distribution List and add all (or some) recipients as members. Exchange server considers the Distribution List 1 recipient and will not generate any errors.
Important: if the number of recipients exceeds 200, this may cause delivery delays and sometimes even rejection by 3rd party mail systems as such a message might be considered spam. Smarsh Hosted Services does recommends not to send to more than 200 recipients at a time.