Hey Nick,
Thanks for posting to the community.
You do not need the SendGrid component for SmarterMail to work.
Just be aware that by default Azure blocks port 25 so you need to contact them to have them unblock the port if you're having sending issues.
Please let me know if this helps.
Best Regards,
Zach Sylvester
System/Network Administrator
SmarterTools Inc.
(877) 357-6278
www.smartertools.com