Create A D365 Development Environment

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In order to develop in Microsoft Dynamics 365 for Finance and Operations, you need a development environment. In this article, you will learn how to create a D365 development environment. Once this environment is setup, you can use it to perform testing of the system. As well as develop new functionality using Visual Studio. You can use this environment to follow all the steps I have shown in my other articles.

Requirements

In order to create a D365 development environment, you need to use Life Cycle Services (LCS). To see this site, go to lcs.dynamics.com. Then sign in or create an account. Your account must be part of an organization that is either a Microsoft Dynamics 365 F&O customer or a partner in order to create a development machine. Otherwise, unfortunately you will not be able to create an environment.

Create A Project

Before we can create a D365 development environment, we need to first create an LCS project. After logging into Life Cycle Services (LCS), create an new project by clicking the “+” button. Or, select an existing project.

In the dialog that pops up, choose the right option for your needs. For this example, I chose “Migrate, create solutions, and learn.”

Next, in the “Create a project” dialog, fill in a name, and set the Product name to “Finance and Operations.” See below for how I set the other fields.

Finally, you will be taken into your LCS project ‘dashboard’.

Different Types of Environments

Before going further, I want to explain some of the different types of environments that can be deployed using LCS. For one thing, understanding the differences are important to knowing when to use each. Also, please also see the Microsoft documentation that explains the different environment types.

Standard and Add-On

First, Tier 2 and above environments can be created in the Microsoft Tenancy. These machines are typically used for Acceptance Testing, Performance Testing, and also Production. They will show under the ‘Environments’ pane, on the dashboard, with green box backgrounds. And are paid for monthly based on a variety of factors.

These are NOT a D365 development environment. Users cannot remote desktop into the machine itself. And the only way to change the code on these environments is to apply a code “Package” to the environment.

Cloud-Hosted Development Environments

Secondly, Azure Cloud-Hosted D365 development environments can be created. These environments are hosted within a Microsoft Azure subscription. And paid for as part of that subscription.

To view these development environments, click on the ‘three lines’ button in the top bar of LCS. Then select ‘Cloud-hosted environments’

Initially, these list will not show any environments. However, a new D365 development environment can be added by clicking the “+ Add” button.

After environments have been created, you will see a list like this.

I will cover creating an azure cloud-hosted environment in a separate article. Follow the Microsoft documentation for the steps. For this article, I will focus on the third type of environment.

Environment Image (VHD)

Finally, the third type is a D365 development environment image. Or, a Virtual Hard Disk (VHD). This type of environment is hosed on your own computer and can be downloaded from Life Cycle Services (LCS).

In the other types, the environments all required a paid subscription. However, this type does not.

Note, you still need to be a customer or partner with LCS access to download these files. But, after the files are downloaded, they can be used on any machine.

It is important to understand that running a D365 development environment on your computer does take a lot of memory and processor power. And therefore, it may run slower than on a dedicated Cloud-hosted machine or Tier 2 machine. But, it is very useful for developers who may not need a lot of performance to write their down.

Download the Development Environment

In order to download the D365 development environment, go to the LCS dashboard. Then, select the ‘Asset Library’ icon, all the way on the right.

Additionally, you can often see the ‘Asset library’ under the three lines drop-down.

First, select the ‘Downloadable VHD’ tab on the left side. Secondly, click the ‘Import’ button.

In the dialog that opens, select a file, then click the ‘Pick’ button. Repeat pushing the ‘Import’ button, selecting a line, then clicking ‘Pick’, until all the lines are added.

In the end, you should see all parts listed in the grid.

Finally, click on each blue text, to download each part. Please note, each file is LARGE. In this case, over 3 GB. Therefore, you may want to download one file at a time.

Creating the VHD

After all of the files are downloaded, double click on part01 file. This will be the file that ends with .exe.

This application will extract all of the compressed files and create a single Virtual Hard Disk (.vhd) file.

First, accept the license agreement. Secondly, specify a destination for the VHD file. Then finally, click ‘Extract’.

In the end, you should see a file with the extension .vhd created. In my case, it was roughly 90 GB in size.

Enable Hyper-V In Windows

Before, we can run the Virtual Hard Disk, we must first enable Hyper-V on the machine. If you have already done this, you can skip these steps.

First, click on Windows>Start. Then type ‘Turn windows features on or off’, and select the result.

Secondly, click the checkbox next to the folder ‘Hyper-V’. The folders underneath will also get checked.

Finally, click ‘Ok’, and wait for the feature to be installed. You may need to restart your computer afterwards.

See Microsoft’s documentation here.

New Hyper-V Virtual Machine

Next, we need to create the Virtual Machine.

Go to Windows>Start and type ‘Hyper-V’. Select the Hyper-V application.

After the Hyper-V Manager opens, select New>Virtual Machine.

First, click ‘Next’ on the ‘Before you Begin’ screen.

Secondly, enter a name for the Virtual Machine, then click ‘Next‘.

Thirdly, specify a generation. In this example, I specified ‘Generation 1’.

Fourthly, enter in the amount of memory the Virtual Machine can use. In my opinion, you should specify at least 8GB of memory, if not more. Otherwise, your D365 development environment may not very slowly.

Fifth, set the Connection to ‘Default Switch‘. This controls the system’s access to the internet.

Sixth, select the option to ‘Use an existing virtual hard disk.’ Then, click Browse, and select the .vhd file. Next, click ‘Open’. And then, click ‘Next’ in the wizard.

Finally, click ‘Finish‘ on the Summary screen.

Run The Development Environment

Finally, we can run the D365 development environment.

After starting Hyper-V Manager, right click the Virtual Machine, and click ‘Connect’.

Next, click ‘Start’, on the window that opens.

Confirm the Display configuration. Then, click Connect.

Sign-In using the following credentials:

  • User name: Administrator
  • Password: pass@word1

Also, see Microsoft’s documentation here.

Provision The Administrator User

Finally, you are in your personal D365 development environment. But there is still a couple last things to do.

On the desktop, there is a shortcut named “AdminUserProvisioning.” Double click on this shortcut.

When the dialog opens, enter an Azure Active Directory email address into the ‘Email address’ field. Then, click Submit.

Note, after clicking the ‘Submit’ button, you likely will need to wait for several minutes.

Get The D365 URL

Typically, you would open a browser, and navigate to the D365 environment using a URL you have received. In this case, you have not received one yet.

Go to Windows>Start and type ‘IIS’, and select Internet Information Services (IIS) Manager.

On the left side, expand the nodes until you see one named ‘AOS Service’. Select it.

On the right side, click the blue text under ‘Browse Website’.

This will open a browser to the D365 environment. You can bookmark this URL for further use.

Setup Visual Studio

Go to Windows>Start, and type ‘Visual Studio’. Right click the Visual Studio application and select ‘Run as administrator‘. Sign into Visual Studio, After Visual Studio opens, select View>Application Explorer to see all of the base Microsoft source code.

If you wish to write your own code, follow my article on How to Create A Model in D365.

Additionally, learn How to Create A D365 Project In Visual Studio.

Start Batch Management Service

In order to run batch jobs in your d365 development environment, you must start the Batch Management Service.

First, go to Windows>Start, then type ‘Services’, and select the ‘Services’ application when it shows.

Secondly, select the service named ‘Microsoft Dynamics 365 Unified Operations: Batch Management Service’. Finally, click the ‘Start’ link.

Conclusion

In this article, you learned about the different types of D365 environments that can be created. After downloading and installing a VHD image, you now have your very own D365 development environment! You can use this environment to follow along with many of the other articles listed on this site. Have fun!

Peter Ramer
Peter Ramer is a part of the Managed Application Services team at RSM working on Microsoft Dynamics 365. He focuses on the Retail and Commerce industries. When he is not solving problems and finding ways to accelerate his clients' business, he enjoys time with his three kids and amazing wife.

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28 thoughts on “Create A D365 Development Environment

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  1. Hi, I faced an issue in running the D365 batch management service. error code: 1064.
    Could you please help on this issue?

  2. Admin user provision is returning error message “The operation has timed out”. In Event Viewer found error text – Failed to create AX Encryption engine with Encryption certificate and signing certificate.

    Will you please assist to run AOS instance through VHD?

  3. Hi Peter, may you please assist the site is not opening I am getting the message below:

    Hmmm… can’t reach this pageThe connection was reset.
    Try:

    Checking the connection
    Checking the proxy and the firewall
    Running Windows Network Diagnostics
    ERR_CONNECTION_RESET

    1. Can you tell me which site is not loading? Are you referring to the D365 site after you remote into the development machine?
      If so, go to windows start button, then type iis. Then click on the application internet information services manager. Expand the nodes on the left side. See if there is a stop icon on the website AOSService. If so, spect the website then click the start button on the right side. If you get a message about the World Wide Web service not running to to the windows start button, then type services. In the form that opens find the service named World Wide Web. Select it and then click start. Then go back to the iis manager and try starting the website again. Then go back to your browser and reload.

  4. Hi,
    we recognized that the operating system of the VM is a demo that expires after a couple of month and this can be expanded 2 times through MS Support…..
    Any idea what this means if you have 4 developers? Could this be solved by one Windows-Server-Datacenter license for all of them or will this end up in a serverlicense for very developer or even every customer?

    1. I am not sure what license you may need long term for this local VM.
      In my work with customers, we create azure hosted development machines in life cycle services (LCS). And the customer will pay for them as part of our work with them.
      And I will just use this local VM as a sandbox environment.
      I believe Microsoft is working on a ways where you won’t even need a VM to write code for Dynamics. But that may still take some time before that is ready.

    2. I was able to convert the evaluation vm to a normal windows 2022 datacenter version by using the following admin cmd:
      dism /online /set-edition:ServerDatacenter /productkey:AAAAA-BBBBB-CCCCC-DDDDD-EEEEE /accepteula
      The productkey i was using is from my msdn subscription.

  5. hi
    i have the VHD installed but when i open the table browser i got error massage the system can’t open specified file

  6. Hi, I faced an issue in running the D365 batch management service. error code: 1064.
    Could you please help on this issue?
    i am unable to start my machine..
    kindly help me.

    1. Hi Syed. I can try to help. You said you are unable to start your machine?
      Where are you seeing the error code 1064? In the event viewer?

  7. Hi Peter,
    My onebox error and i reinstall. But when i restored database from Production and “Generate Self-Signed Certificates” my batch management service not start. Can you share about issue?
    Thanks

    1. Do you receive an error message when you try to start the service? Is there an error message in the event viewer? I am not sure what the problem is. Some more information on the error may help.

  8. Hi Peter, after I had singed in The Development Environment, I could not find the AdminUserProvisioning shortcut. Could you please help me in this issue?

  9. Hi Peter
    Thanks for your vedio, i had learned many from your vedios.
    I’m make my local envoriment use VHD 10.0.37
    There are two errors could you help me?

    The first when i login the AdminUserProvisioning , the error as below:
    The value’s length for key ‘password’ exceeds it’s limit of ‘128’
    so i can’t registe it.

    Second :
    i can not start Batch Management Service stopped with the error failed to start and throwing error 1064.
    Thank you very much

  10. Hi Peter

    Thank you very much for your kindly reply
    I had done with the website’s method , but diffrent error had happened,
    at last i figureout the errors by setup azure app register’s full setups on microsoft homepage .
    now i can write code local in my envoriment

    other problem
    if you can make a vedio about how to link to VSTS, i will very appreciate!
    i want do check in download the source code from cloud only , you know the envoriment will be used only 180days.
    Thank you very much, your videos is very helpfull

  11. Hi Peter!

    Now that the Admin User Provisioning tool has been deprecated and is no longer included in new VHD’s, how do you give yourself access to the D365 F&O environment?

  12. Does having this development environment within hyper-v have any monthly cost? since it is our local machine

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