@Marko Todorovic , Thanks for posting in our Q&A.
In General, when we add "/ManagementServerInitiatesConnection=True", the Management Server will try to reach Gateway Server when initiates the connection. Like
MS > 5723 > GTW
https://learn.microsoft.com/en-us/archive/blogs/predrag_oparnica/initiates-connection-between-management-server-and-gateway-server
If we don't add this parameter, the Gateway Server will try to reach the Management Server. It will be:
GTW > 5723 > MS
For our issue, we can check on the outbound rule on Gateway firewall to see if 5723 is opened. And on our organization firewall, make sure the 5723 port is open on the direction from Gateway to management server. And on management server, make sure the 5723 is open on inbound rule.
Based as I know, there's a known issue before SCOM 2016 UR4. And it is fixed on SCOM 2016 UR4. If our version is above it, we can use any of the method. If your organization doesn't want the connection to be established from outside (GTW), but rather it should be initiated by the MS. We can choose the one by adding "/ManagementServerInitiatesConnection=True":
https://support.microsoft.com/en-us/topic/update-rollup-4-for-system-center-2016-operations-manager-4857e9a6-43f7-243f-a06b-2b998cdb97fa
Hope the above information can help.
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