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I setup smtp server in sharepoint server itself. So both server are same as standalone server. Configured Outgoing and incoming email settings accordingly. But confusion is whenever i send email, it first reach to queue folder and then it disappear. Ideally it should go to drop folder. But this is not happening. I'm confused where email are going then?
I am not using any exchange server or POP3 server. Just configured smtp server and sharepoint email settings.
You need to define a mail server in your farm. For example WFE.
Once this is decided you need to create an Alias in SMTP. IIS->SMTP->Right Click Domains->Select New Domain->Set Domain Type = Alias and provide the server name
Detailed steps
