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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / LCS new cloud-hosted e...
Finance | Project Operations, Human Resources, ...
Answered

LCS new cloud-hosted environment deployment fails with AccountKindNotSupported

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Posted on by JoBox 138

Hi everyone,

We are currently unable to deploy a new D365 Finance & Operations cloud-hosted development environment from LCS.

We tried creating new environments from LCS > Cloud-hosted environments > Deploy in the East Asia region, but the deployments failed.

After checking the deployment details in Azure Portal, we found that the failed resource is the Storage Account, with the following error:

Account Kind Storage is not supported.
Code: AccountKindNotSupported

 

We then checked the ARM template generated by LCS and found that the Storage Account is defined as:

"kind": "Storage"

 

We have reproduced the same issue with more than one new LCS environment deployment, so it does not appear to be specific to one environment.

Our intended configuration is:

  • D365 F&O version: 10.0.49
  • Region: East Asia
  • Environment type: LCS Cloud-hosted development environment
  • Deployment: Most recent ARM topology
  • VM size tested: D4as v5 (we are also considering testing with an Ev5-series VM)

The deployment proceeds through several Azure resources successfully, such as VNET and Load Balancer, but fails when LCS attempts to create the Storage Account.

Given the recent changes around GPv1 Storage Account creation in Azure, we would like to confirm whether this could be related to the current LCS deployment behavior.

  • Is this a known issue with the current LCS Cloud-hosted environment deployment template?
  • Is there an updated LCS topology/template that uses "kind": "StorageV2" instead of "Storage"?
  • Is there a Microsoft-supported workaround for deploying a new Tier 1 cloud-hosted development environment?
  • Should existing LCS customers now use the new Power Platform admin center (PPAC) development environment instead of LCS for new development environments?
  • Is manually changing the generated ARM template from "Storage" to "StorageV2" supported, or could this cause issues with the subsequent LCS provisioning process?

We would highly appreciate any guidance from Microsoft or anyone who has encountered and resolved this issue recently.

Thank you.

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Categories:
Dynamics 365 Finance
  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 307,691 Super User 2026 Season 2 on at

    Hi JoBox,

    I haven't deployed a new CHE from LCS recently. Indeed, there is a change in the storage requirements where all existing VMs were supposed to be updated to Storage V2. 
    Have you tried to deploy using premium storage settings? After creating the VM, check the storage settings as with specific settings, like geo redundancy, the storage costs can be way higher than expected. 

  • JoBox Profile Picture
    JoBox 138 on at

    Hi André Arnaud de Calavon, 

    Yes, I have already tried deploying with Premium LRS, but unfortunately, the deployment still failed with the same issue.

    PremiumStorageSettings.jpg
  • Suggested answer
    vishalsahijwani Profile Picture
    vishalsahijwani 431 on at

    Hi @JoBox ,

     

    I don't think its see an issue which can resolved by using Premium LRS because all the customers using D365 F&O do not necessarily enable this option.

     

    Please check the user account or service account you are using for deployment of Cloud Hosted environment whether it has relevant access to your subscription on Azure to deploy the new Cloud Hosted VMs. 

     

    If still the issue persists its recommended not to spend more time on researching on the solution and raise a ticket with Microsoft support team immediately. 

     

    Please check if this helps or please let us know if you have anu further questions.

     

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 307,691 Super User 2026 Season 2 on at

    Hi JoBox,

    I have also tried the same now and it is failing for me as well. Premium storage was a first thought last night, but this is indeed not working for me either. I sent a question to Microsoft about this.

    Microsoft wants to move to the new Unified Development Environments as replacement for the CHEs. On the longer period, LCS will be fully deprecated. Anyway, I haven't read about any deprecation for CHEs at this moment in time.

    Have you considered creating a UDE instead? I'm not aware of possible template adjustments to be done by yourself. That is not my area of expertise.

  • JoBox Profile Picture
    JoBox 138 on at

    Hi vishalsahijwani, 

    Thank you for your suggestion.

     

    The user account and Azure subscription permissions should be fine. I have been using the same account to deploy D365 F&O cloud-hosted environments through LCS since 2021, and I have successfully created multiple environments without any permission issues.

    For the current issue, the deployment is able to create several Azure resources successfully, such as the VNET and Load Balancer. It only fails when creating the Storage Account, with the specific error AccountKindNotSupported.

    Therefore, at this stage, it does not appear to be related to insufficient account or subscription permissions.
     

    Thank you again for your advice.

  • JoBox Profile Picture
    JoBox 138 on at

    Hi André Arnaud de Calavon,

    Thank you very much for testing this on your side and confirming that you are experiencing the same issue. It is very helpful to know that Premium Storage does not resolve the problem either.

     

    I haven't tried creating a Unified Development Environment (UDE) yet. I am currently looking into the UDE approach and trying to understand how it would fit into our current development and deployment process.

     

    At this stage, however, we still need to use the existing LCS cloud-hosted development environments for some ongoing customer development and support work, so being able to deploy a new CHE through LCS is still important for us.

     

    Thank you also for reaching out to Microsoft about this. I would be very interested to know if they provide any clarification or a supported solution for the current CHE deployment issue.

  • Suggested answer
    vishalsahijwani Profile Picture
    vishalsahijwani 431 on at

    Hi @JoBox ,

     

    Thanks for the reply I would recommend to open a ticket with Microsoft support as they will be able to point in the right direction regarding what is the exact issue. I think they can guide us which storage account type can be created smoothly without any errors.

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 307,691 Super User 2026 Season 2 on at

    Hi JoBox,

     

    As mentioned by Vishal you can create a support ticket. Additionally, I messaged the program manager at Microsoft owning LCS. He mentioned me that it should have been working already. I sent this thread to him for investigations. They will check what might be wrong and then fix it. 

  • Kenneth Kampmann Profile Picture
    Kenneth Kampmann 5 on at

    I still have the same problem any updates , else i also make a ticket

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 307,691 Super User 2026 Season 2 on at

    Hi,

    Microsoft is working on the issue. They rolled out a fix, which is still not working for me at this moment also. I'm in contact with the engineer and the program manager directly. My last feedback was sent last Friday at the end of my working day.

    At least, it makes sense to create a support ticket and provide environment, activity details, and the exact error message. That can be helpful for the mitigation.

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