Setting up a personal Dynamics 365 For Operations, Enterprise Edition, development environment

Setting up a personal virtual machine to do Dynamics 365 For Operations development.


(last updated 2018-03-26)

Microsoft expects all Dynamics 365 / X++ development to be done in a preconfigured virtual machine (sometimes called a “onebox”) that has local installs of Visual Studio, Dynamics, and SQL Server; these are integrated in a way to ease development. They would prefer that you rented these VMs from them, which has some integration advantages; but it is possible to set up your own, which is probably less expensive in the long run, and might be more convenient. These instructions will help you set up that development environment on a personal machine; although there are a few wiki pages on it, there does not seem to be any complete information gathered in one place.

As with all my blog posts, if you have comments or additional information, I will endeavor to update what I have written here. I have noticed that this is by far my most popular blog post, so please, contirbute if you can… you’ll be helping many others!

This guide is up-to-date for the application release 7.3 platform update 12 version. Sometimes things change slightly between versions, but it is now rare to find drastic changes.



You probably want at least 16 GB of memory to SPARE for the VM beyond what you are already using, plus, probably around 150 GB of HD space. (By default the VM wants to offer you 126 GB on the virtual drive.) At least two CPUs. (As always, the more resources, the better; these are pretty good minimums.) And you have to be able to enable virtualization in the BIOS, which not everything can do.

You need to be able to run virtual machines on your computer

Not all machines can handle virtualization (it usually requires a BIOS setting that isn’t enabled by default) and you probably need Windows 10 Professional or Enterprise (64 bit) as your operating system. I’m not sure that any other Windows operating systems other than Server ones will run Hyper-V. (You might be able to set it up with another OS entirely? Like, can Mac users run a Windows VM?)

 Setting up Hyper-V on Windows 10 is covered here (consider installing Hyper-V a prerequisite):

You need to have an MSDN account attached to a Visual Studio subscription

Your MSDN account might use the same email address as your “work/school” account, but they are different accounts in different Microsoft databases, and yes it can be confusing; but they can be linked together after you create the MSDN account. Based on personal experience, I recommend using different passwords, so you can keep straight which one you are using at any given time. Go to to create an MSDN account. Although counterintuitive, you probably must create it as an “individual” account (instead of a “work/school” account) because you probably already have a “work/school” account for your work email address.

At least, that was the situation I ran into, and web searches lead me to realize I was far from alone. If you have been able to set this all up with a single account, let me know.

Downloading the VM

This can be tricky. Microsoft isn’t keen on putting these in the hands of people who want to learn the product; only paying customers and partners.

You might be working with consultants who take care of this for you.

DEPRECATED: You can in theory download directly from, though very few folks seem to have access to that page. Getting access the first time can be tricky. You need to go to and log in with your personal/Live/individual/MSDN account (instead of the “work/school”/corporate account). “Search Products accepting bugs or suggestions” for “Dynamics.” You should find a choice with a name like “Mirosoft Dynamics 365 for Operations Suggestions and Feedback”; choose to “Join.” After that, you should be able to navigate to the program and choose “Dowwnloads,” or use the direct URL, to get to the VM download.

There is a download tool that Microsoft suggests using (“Microsoft Insider – Distribution Manager”), and it is faster and easier when it works… but it can be a little tricky to get your authentication and filtering right. At least, it is for me.

The best/supported way to get a VHD is to go to Lifecycle Services (of course you need to be a customer/partner with access to LCS), look under Cloud-hosted environments, and click “Add.”

Add cloud-hosted environments

You will be prompted for the application & platform version; after that, choose Locally instead of Azure. Then make sure you get the “development” VHD. The exact language used changes between versions, so read carefully. (You do not want demo or “build and test.”)

At the moment, there are also some direct URLs for current VMs, but don’t count on these being around for long (I’ll try to keep these current, but get used to needing Lifecycle Services):

Installing the VM

 You should have Hyper-V set up, per the prerequisites. Use Hyper-V Manager to set up your new VM.

You probably want to copy the VHD file into C:\Users\Public\Documents\Hyper-V\Virtual hard disks locally; that’s the default location Hyper-V wants. (It can go other places; you’ll just have to configure it properly.)

 The VHD file is in the wrong format to import as a VM, so you have to create a new machine, then during the phase to create or connect a disk point to the VHD file.

  • Specify Name and Location: You might have more than one VM set up at a time when transitioning to new updates, so consider including the version number in the name. You can change this later so don’t sweat it too much.
  • Specify Generation: You need to set it up as a “Generation 1” machine.
  • Assign Memory: I usually give it 18 GB (18,432 MB) out of the 32 GB on my laptop, and definitely Dynamic Memory, but you might want to experiment with this.
  • Configure Networking: Start by choosing whatever connection you are currently using, but we’ll configure any others later.
  • Connect Virtual Hard Disk: “Use an existing virtual hard disk” and specify the VHD you downloaded.

Configuring the VM

After initial setup, you can change settings on the virtual machine. (Not while it is started, though.) Highlight it in Hyper-V Manager and choose “Settings.”

  • If you switch between multiple wired and/or wireless network connections on your laptop, you want to “Add Hardware” and add any Network Adapter you’ll use with the VM. I haven’t used any of the advanced settings.
  • You probably want to let it use more than one (1) virtual processor; not more than your hardware has, but at least two (2) will help performance. (I have eight (8) processors and give the VM six (6), but you might want to experiment with this.)
  • Obviously, give it a useful name. You might have more than one set up at a time when transitioning to new updates, so consider including the version number in the name to distinguish them.

If you know that you are going to need extra space (for example, you expect to restore a production database that has grown somewhat), then now is a good time to proactively expand the size of the virtual hard drive, before possibly checkpointing and continuing.

Post-VM-installation configuration

Before you do any of this, you might want to checkpoint the VM. If the download process is long and slow, you don’t want to repeat it if you accidentally make a mistake you can’t undo.

When you first try to connect (and later, if you choose View > Enhanced Settings from the Virtual Machine Connection window) you can set display resolution and whether to use multiple monitors; also whether local resources (clipboard, printers, drives) are available to the VM. This is personal preference, but I find it easiest to work in a full screen single monitor, with access to the clipboard and local drive. Just be ready to set up what you want.

Logging in: Once you can launch the VM, you have to log in with Administrator / pass@word1 as the credentials.

Rename VM

This step is optional if you are the only developer; but if you are sharing VSTS with other developers, it seems to be necessary. Otherwise, you end up with Workspace collisions when trying to map source control.

If you get an error that looks like “The working folder C:\AOSService\PackagesLocalDierctory is already in use by workspace MININT-MHQ9O7x;DeveloperName on computer MININT-MHQ9O7x” when trying to do the “Source Control” steps below, you probably need to do this.

  • Go to Control Panel > System and Security > System and click “Change settings” next to the computer name.
    • Change it to a name of fifteen (15) characters or less; I suggest a standard that includes your name and the version (i.e. BPARKER-71-PU7 or BPARKER-73-PU12 would be fine). We just want to avoid the same name being used twice. Do not change the Workgroup or Domain. This will require rebooting the VM.
  • Change SQL Server Reporting Services to use the same name. Launch “Reporting Services Configuration Manager” from the Start menu.
    • Make sure the “Server Name” matches your new name and click “Connect.”
    • Select “Database.” If the SQL Server Name does not match your new name, choose “Change Database” and run through the Wizard. (Nothing else should change; Report Server Database should remain as DynamicsAxReportServer.)
    • Select “Web Portal URL” and make sure the URL matches the new name.
    • Select “Web Service URL” and make sure the URL matches the new name. You can probably click through to verify that it is running.
  • If you’ve already set up Workspace mapping in Visual Studio, you probably need to change it.

Provision Admin User

Once you can log in as Administrator, you need to use the AdminUserProvisioning tool (should be a shortcut on the desktop) to link the VM Administrator account to your MSDN account. All kinds of stuff in Visual Studio and the Dynamics AX/365 web interface depends on you being recognized as your Microsoft account. If the shortcut isn’t on the desktop (it wasn’t in early releases), go straight to: C:\AOSService\PackagesLocalDirectory\Bin\AdminUserProvisioning.exe

Where I work, we don’t use the Retail module, so I ignore the RetailTenantUpdateTool (delete it from the desktop, even). If you use it and have information to share on it, let me know.

Operating System

If you want sound, you might want to launch Services and set “Windows Audio” to Automatic startup. They seem to leave it as Manual on the VM with the assumption that you don’t want it. (Even if you chose sound in Enhanced Settings.) Then set whatever Windows sound scheme will help you.

Do whatever other OS configuration makes you comfortable. You can usually run “Settings,” search “For developers settings,” and easily mass-apply some useful settings there.

 If you are as fussy as me (or like efficiency), you might want to put together your own checklist. For example, some things I like to do:

  • Install the updated version of SQL Server Management Studio (SSMS), if you’re the kind of developer who dips into SQL Server frequently.
  • Show file name extensions in Windows Explorer.
  • Create a desktop shortcut for Visual Studio with “Run as administrator” set.
  • Create a desktop shortcut for an Administrator Command Prompt with “Start in:” set to C:\AOSService\PackagesLocalDirectory\Bin and the Layout size increased a bit; I have to fire that up to run ModelUtil pretty frequently.
  • For the same reason (running ModelUtil), I like to take a minute to install “Path Copy Copy.”
  • Set your time zone, if needed.
  • You might want to change the Administrator password.
  • As of platform update 5, you are getting wallpaper instead of a plain grey desktop background. Your aesthetics are up to you.

The OS will probably need to download and install some Windows Updates; be ready for that.

Visual Studio

As of this writing, Visual Studio needs to “Run As Administrator,” so you might want to set up a shortcut for that.

You seem to need to log in to Visual Studio with your “Work/School” account rather than your “personal” (MSDN) account. You’ll need to configure workspaces and get from source control, which is out of the scope of this document. (If you don’t already understand source control as well as or better than me, then you need help I can’t give you.)

You should also review these (out-of-date and obviously woefully incomplete) setup steps from the Microsoft managed Wiki:

NOTE: Some of these are now set as advised in advance. I have no idea if Intellitrace still exists. (You’re told to disable it but I can’t find it anymore.) I will probably remove the above link eventually, since it is increasingly out of date.

In Visual Studio, go to Tools > Options > Dynamics 365 > Projects and select “Synchronize database on build for newly created project.” It will make your life easier. Based on my experience, I haven’t figured out a reason you would NOT want this activated for your development projects. I also use “Organize projects by element type” and recommend it as a standard for complex projects.

If you are aesthetically minded, you can install additional Visual Studio color themes with this:

You might want to install other Visual Studio add-ons. There are tons, but I haven’t found any specific to X++ development; mostly they would just offer aesthetic tweaks.

Source Control

I am not an expert on source control, and it can be complicated. (It possibly justifies its own separate blog post.) First you’ll need to connect to and log in to your VSTS server.

You are going to need to edit your Workspace. (Don’t rename it; that will mess some things up with IIS/Reporting Services. Instead, follow the “Rename VM” steps above if you need to share source control with other developers.) Just do this:


…and map certain parts of your projects to C:\AOSService\PackagesLocalDirectory (obviously this is only if you have existing projects):

VSTS mapping

Different companies will have different source control setups, so, DO NOT FOLLOW THIS BLINDLY.

Why do you need to do this?… When you create some objects, they are created right in your default folder. However, to let the “onebox” environment work its integration magic with the local Dynamics install, some objects you create in Visual Studio will instead be created in the C:\AOSService\PackagesLocalDirectory directory. In order for source control to see them, this mapping needs to exist for it to look in the right directories.

This configuration will differ depending on how you set up your source control. You might only need a single line added, and you might map it to a different “SourceControlFolder.” The important thing is making sure the objects created in C:\AOSService\PackagesLocalDirectory get in source control!

Do A Full Build

Especially if you have any existing code out there in source control already, now is a good time to get latest and do a full build of all models.

Dynamics 365 For Operations Local Install/Data

You might want to set an Internet Explorer favorites/bookmark for the local install of D365 ( Although this seems like an internet URL, your “onebox” has a hosts file that will point that URL to (your local machine) instead. You can find that file in C:\Windows\System32\drivers\etc if you’re curious, but you have no need to do anything with it.

A favorite/bookmark for VSTS and Lifecycle Services isn’t a terrible idea, either.

You probably want to go into the local installation of D365O, click the “cog” in the upper right for Settings, and change some User Options/Preferences. The USMF company has better test data, and you probably want to change the time zone. Again, this is personal preference.

There is a good chance that your organization has certain test accounts you will want to set up as Users (System administration > Users > Users) and/or Employees (Human resources > Workers > Employees). Or, perhaps you’ll have a database you want/need to restore that contains this info.

Configure SQL Server to let you log in

If you use SQL Server, you need to do this as of Platform Update 5:

Alternatively (and this is the better solution), you can still use Windows Authentication to connect to the local SQL Server if you run SSMS as administrator. So you might at least want to set up a shortcut for that, if you are the type who goes into SQL to debug problems.

Checkpoint the VM

After all this, if you accidentally do something wrong, you don’t want to have to do it all again. Checkpoint the VM. And don’t forget to do it regularly going forward.

Happy coding!

16 thoughts on “Setting up a personal Dynamics 365 For Operations, Enterprise Edition, development environment”

  1. Hi everyone! Someone having problem to provision admin user? I’m having a ‘time out’ error, I followed all steps, the internet connection is working correctly. Someone can help me?


  2. Hi Brian,

    I want to setup D365 operations for my individual learning and development on AZURE. AX 7 is not listed in my LCS project as my partner or company do not have licenses. In this case is there any possible for me to setup my own box ?

    Any suggestions is much appreciated.



    1. I’m sorry, Praveen; I don’t know what the situation is for people who are not partners, and I’ve never tried to set up a VM in Azure.

      You are not likely to be able to access LCS, but you might still be able to download the VM and install it locally, if you have access to a powerful enough machine with Windows 10 Professional. It’s not a perfect learning environment, but it should be enough to develop your programming skills. If anybody else reads this comment and knows more, I hope they will share.

      Frankly, Praveen, if you are just looking for something to learn, I think it is way easier (and there are more job opportunities) to learn a common language like Java.


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