How to Set Up a Local Development Environment for D365 Finance and Operations Without Azure Costs

Are you looking for a cost-effective way to set up a development and testing environment for Dynamics 365 for Finance and Operations (D365FO)? If Azure expenses are a concern, deploying a local Virtual Hard Drive (VHD) is a practical alternative. This step-by-step guide will walk you through the process to get started.

Why This is Important
A local VHD setup provides a robust environment for developers to test and build without incurring cloud costs. With sufficient technical planning, you can have a fully functional Dynamics 365 instance running locally.

Step 1: Download the VHD

1. Access the Lifecycle Services (LCS) portal and navigate to the ‘Shared Asset Library.’
2. Locate the Downloadable VHD section and select the latest version.
3. Download all the related files, ensuring they are saved in a single folder. Run the .exe file to extract the VHD.
   • Pro Tip: Ensure you have sufficient space, preferably on an SSD, as VHD files are large and perform better on faster drives.

Step 2: Set Up the Virtualization Environment

1. Use Hyper-V Manager (or another virtualization tool).
2. In Hyper-V Manager, select New -> Virtual Machine, assign a name, and choose a storage location.
3. Configure the machine:
   • Generation: Choose ‘Generation 1.’
   • Memory: Allocate at least 16 GB of RAM for smooth operation.
   • Networking: Decide if the environment needs internet; if yes, use the ‘Default Switch.’
4. Attach the VHD file during setup by selecting the Use an Existing Virtual Hard Disk option.

Step 3: Configure the Virtual Machine

1. Start the virtual machine and connect to it.
2. Log in using the default credentials (localadmin / pass@word1).
3. Link the VHD to your Azure AD instance:
   • Register an app in Azure AD, add Redirect URIs (https://usnconeboxax1aos.cloud.onebox.dynamics.com/), and note the Application ID.

Step 4: Finalize Setup

1. Generate self-signed certificates via the PowerShell shortcut on the desktop. Use the Azure Application ID for authentication.
2. Run the AdminUserProvisioning tool to add an initial admin user tied to your Azure AD tenant.

Step 5: Launch D365FO Environment

1. Use Internet Information Services (IIS) to access the site URL, typically https://usnconeboxax1aos.cloud.onebox.dynamics.com/.

Tips for Maintenance

1. Monitor Windows Server licenses to avoid unexpected shutdowns.
2. Create a separate admin account for daily operations.

By following these steps, you can set up a robust development environment for D365FO without relying on Azure.

We hope you found this article useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfronts.com