Discontinuation of Microsoft Hosted Tier 1 D365FO Environments

On Thursday, Microsoft explained to all Dynamics 365 for Finance and Operations (D365FO) customers that they will discontinue Microsoft hosted tier 1 environments and remove the tier 1 environments from new D365FO subscriptions. In addition, there will no longer be an option to purchase additional tier 1 environments.

…effective November 1, Tier 1 environments will not be included in the purchase of Dynamics 365 Finance, Dynamics 365 Supply Chain Management, Dynamics 365 Project Operations, or Dynamics 365 Commerce apps. The ability to purchase additional Add-On tier 1   environments will also be removed at this time. Beginning December 1, Remote Desktop Protocol (RDP) access for the existing Tier 1 Developer environments, managed by Microsoft, will be removed and decommissioned.

While the removal of RDP access should not come as a surprise to anyone, the loss of Microsoft hosted tier 1 environments will surprise many, especially since many customers actively use multiple tier 1 environments.

Microsoft hosted Tier 1 environments are most commonly used for build servers, Gold environments, or Test systems. All of these environments can be migrated to a “Cloud Hosted” environment type, running on the customer’s own Azure subscription. Microsoft will issue credits to customers for tier 1 environments for the remaining terms of the subscription contracts, as well as for up to 12 months for any additional tier 1 environments purchased. To request Azure credits, you must complete this document: Click Here

What to use instead of Microsoft hosted tier 1 environments

It should be noted that a build server can now be replaced with a Microsoft hosted agent and Azure Pipeline. This allows for the code compilation and packaging to take place in the Azure cloud with no additional infrastructure to be deployed or managed (or paid for) by the customer. It should be noted that this approach does not support unit testing or database synchronization, but it will catch compilation errors and generate deployable packages for use with release pipelines or manual upload to the lifecycle services (LCS) asset library. For more information on this see,

In order to deploy a “Cloud Hosted” environment, you will need an Azure subscription. Here’s how you can connect LCS to your Azure subscription and deploy environments:

When RDP access is terminated…

Prior to December 1st, when RDP access is terminated for existing environments, we recommend you take a SQL database backup that you can use to restore on your new cloud-hosted environment. Code should be deployed from LCS. However, if the environment is a development environment, synchronize the case source code from Azure DevOps.

We would also recommend looking into Azure Automation, which can automatically start and stop virtual machines outside of business hours. Doing so reduces the amount of time you are billed for each Cloud Hosted VM. VMs are generally billed by the hour.

Another approach to reducing Azure spend is to utilize “Reserved instances.” This is essentially a discount given to you for committing to 1 or more VMs for 12 or 36 month periods. For example, a D13 v2 VM, which we most commonly use for our Cloud Hosted environments, has a list price of $770 per month, compared to $526 (32% less) for a 12-month reservation and $438 (43% less/) for a 36-month reservation.

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