How to create a new D365FO cloud-hosted environment?

In Microsoft Dynamics Lifecycle services (LCS), there is a tool called "Cloud-hosted environments" that allows you to deploy D365FO environments on Microsoft Azure. And here are the steps to create a new environment for the first time:
  1. Sign in to LCS ( by filling your email and password

  2. Create a new Finance and Operations project (if needed). In case the option "Finance and Operations" is not available, then Microsoft should be contacted. Also choose the purpose of this project.

    Select a product

    Create a project

    Purpose of the project

  3. Go the hamburger icon and click Cloud-hosted environments(The user performing this should have appropriate permissions on Azure)

    Cloud Hosted environments

  4. Click yes on the "configure Azure connector" dialog (this dialog appears for newly created projects, if you did this before then you can jump to step 10)

    Configure Azure connector

  5. Before you continue with the azure connector, you need to make sure that the "Dynamics deployment services" role is added

    Dynamics Deployment services

    Here's how you can add it:

    • Sign in to
    • Go to subscriptions and choose your visual studio subscription
    • Click on Access Control (IAM), click Role assignments and click add role assignment

      Add role assignment
    • Choose "Contributor" role under "Privileged administrator roles", then click next

      Contributor role

    • Select the "Dynamics Development Services" member, then click next

      Select member for role assignment

    • Click Review and assign

      Review and assign

  6. Go back to LCS after you clicked "yes" on the configure azure connector in step 4, and click add on Azure connectors, then fill the details and click next

    Add azure connector

    Microsoft azure setup

    • To get your azure subscription id, sign in to, go to subscriptions and choose your visual studio subscription. Then click on overview and copy your subscription id

      Azure subscription id

    • To get your Azure subscription tenant, then go to Microsoft Intra Id and grab the primary domain

      Microsoft Entra Id

  7. Now after you clicked next in step 6, also click Next here

    Microsoft Azure setup

  8. Click next, but make sure you added your user with any role (just similar to the way you added "Dynamics Development Services" but add your user this time)

    Authorize Azure setup

  9. Choose region and click connect

    Azure region

  10. Go back to cloud-hosted environments in your project and click Add

    Application and platform version

  11. Choose the environment type

    Environment type

  12. Choose topology to deploy

    Environment topology

  13. Fill your environment details:
    •  Fill your environment name
    • Choose your VM size, here I choose D13, you can change that by clicking on the drop down in the size column. You can also look at the azure price list and choose the VM that suits you and suits your budget.
    • You can click on Advanced settings for multiple things like: enabling power platform integration, adding demo data..etc
    • When you finish, click next to deploy your environment
    Environment details

  14. Click Deploy

    Deploy Environment
    • You might get an error when you click deploy related to the VM you chose, in this case you will need to contact azure support or choose a VM size that is supported in your region.
      Azure Products by Region | Microsoft Azure

      Deploy error

  15. After you click deploy, a record will get created with status Queued, and if you click full details, you'll be able to see that it's being deployed

    Deployed environment in queued status

  16. Once it finishes deploying, you will be ready to use it :)


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