Create and Restore Environment Backups in Microsoft Dynamics 365

How to Create and Restore Environment Backups in Microsoft Dynamics 365

Introduction

In Dynamics 365, environments are separate instances used for development, testing, and production. Backups protect data, configurations, and customizations from accidental changes, failures, or testing errors.

This blog will walk you through the process of how to create and restore environment backups, their advantages, limitations, and best practices.

Scenario - Suppose your organization plans to deploy new workflows, plugins, and Power Automate flows in production. These may improve automation but could also break existing processes..

Before deployment: Creates a manual backup of the production environment (snapshot of data, customizations, and configurations) for a safe rollback point in case of issues.
After deployment: If users report errors, data corruption, or performance degradation, the admin can revert the environment to its previous stable state, minimizing business disruption.

What is an Environment Backup?

An environment backup is a complete snapshot of a Dynamics 365 environment at a specific point in time. It includes:

All data in tables (entities)
Customizations like forms, views, workflows, plugins
Security settings and user roles
Configuration data (business rules, Power Automate flows)

These backups can be created automatically or manually and can be restored if needed.

Creating a Backup in Dynamics 365

Step 1: Access the Power Platform Admin Center(PPAC)

Before beginning, a user must have a administrator role to perform these operations

Go to Power Platform Admin Center.
Sign in using your admin credentials.
Navigate to Environments from the left-hand menu. It should be of Production, Sandbox or Developer type.
Note: Backups are not available for trial environments.

Step 2: Select Environment to Backup

From the "Environments" list , select the target environment.
From the ribbon, select Backup & Restore → Backup," then "Restore or manage." From the available options, select the desired backup from either the "System" or "Manual" tab and click “Continue”

Step 3: Configure Backup Details

Provide a name for the backup. (E.g., “ Backup – Sep 2025”)

Click Back Up to start the process.

Note: Manual backups usually take a few minutes to complete depending on the environment size.

Step 4: Verify Backup Completion

Go to the Backups tab of your selected environment.

Confirm that the backup status shows Completed.

Restoring a Backup in Dynamics 365

Restoring an environment has several critical restrictions that must be understood before beginning the process. Restoration can only be performed on a Sandbox or Developer environment; it is not possible to restore directly to a production environment. Additionally, the target environment must be in the same geographic region as the source environment, and both must have a Dataverse database enabled. Finally, a minimum of 1 GB of available storage capacity is required to initiate the restore operation

Step 1: Navigate to the Environment Backup List

Click "Backup & Restore," then "Restore or manage."
From the available options, select the desired backup from either the "System" or "Manual" tab and click "Continue

Step 2: Choose Backup to Restore

Select a backup from the available backup list.
Confirm details like date, name, and size for Manual Backup and select date time for System Backup
Click Continue to proceed.

Step 3: Choose the Target Environment and Start Restoration

A side pane will appear where the administrator can select the target environment to overwrite. The list of available target environments is filtered to only show valid options (e.g., sandbox or developer environments).
Click Restore.

Note: Restoring an environment cannot be undone. Ensure you have a backup of your current environment before proceeding.

Confirm and Execute- Review the details, acknowledge the warning that the target environment will be completely overwritten by the backup, and select "Restore" to begin the process.

Step 4: Monitor Restoration Progress

Restoration may take several minutes or hours depending on the environment size.

Check the status column for updates.

Once completed, log in to confirm that all data and configurations are restored correctly.

Once the backup is successful, the environment is placed into Admin mode by default. Any other users other then admins/customizers won’t be able to access the environment. Business users are blocked. Background jobs and integrations are paused. So first we need to change the admin mode to off

Admin mode means: (reference Microsoft Learn

Only users with System Administrator or System Customizer roles can access the environment.
Regular business users are blocked from logging in.
All background operations (such as workflows, integrations, and scheduled jobs) are turned off to prevent conflicts or unintentional data changes during review.

This mode allows administrators to:

Verify that the restore process worked correctly.

Check that data, configurations, and customizations are intact.

Perform any necessary adjustments before making the environment live again.

Once everything is validated, admins can turn off Admin mode to allow normal user access and resume background operations.

Disable background operations: Check to disable asynchronous operations such as workflows and email synchronization within the environment.

To disable the admin mode, go to the environment, click Edit and toggle off the Administration mode

Advantages of Environment Backups

Data Safety: Protects against accidental deletion or corruption.
Testing Changes: Allows testing of updates or customizations without affecting production.
Disaster Recovery: Quickly recover from system failures or incorrect deployments.
Versioning: Maintain multiple backup points to revert to different stages of environment history.

Limitations of Environment Backups

Retention: System backups expire (28 days for production, 7 days for sandbox). Manual backups also expire.
Storage: Restore requires 1 GB free. Operations fail if storage is exceeded.
Frequency: Backups are not real-time; recent changes after the last backup may be lost if restoration is needed.
Size Limitations: Very large environments may take longer to backup and restore.
Cannot Backup Certain Features: Some third-party integrations or transient data may not be included in standard backups.
Performance: Large restores take hours (≈30 mins per 2 GB).
Not Real-Time: Data added after last backup may be lost. Native restore operations are an all-or-nothing process; they revert the entire environment, including all data and metadata, to a single, specific point in time. This creates a severe limitation for a common business scenario: the accidental deletion of a single record or a small group of records. The only native recovery method for this situation is to perform a full environment restore, which results in the loss of all data and changes made since the time of the backup
What Is Not Backed Up Natively

Standard environment backups do not capture all data. A notable example is database records that reference file attachments are backed up, the underlying files stored in Azure blob storage are not affected by a point-in-time restore. This means that files added after the restore point will still exist in storage, but they will no longer be linked to the database.

Best Practices

Schedule regular backups: Align with update or release schedules.
Use descriptive names: Include date and purpose to avoid confusion.
Validate backups: Occasionally restore backups to a sandbox to ensure integrity.
Avoid peak hours: Backup and restore processes consume resources; schedule during off-peak times.

Conclusion

Environment backups are essential for data integrity and business continuity. They provide rollback points for deployments, protect against data loss, and support disaster recovery.

Environment backups is a critical administrative task that extends beyond a simple "set it and forget it" mentality. The native tools provide a foundational level of protection, offering both automatic system backups for continuous safety and manual backups for precise, point-in-time control.

However, the limitations like fixed and short retention periods, a lack of granular restore capabilities, and the inability to download backups locally. These limitations can lead to a "linear recovery" problem where a minor data loss incident can only be resolved by a massive, disruptive, and potentially data-erasing full environment restore.

Therefore, the ultimate recommendation is to not rely on a single backup method. Instead, an organization should build a comprehensive, multi-layered strategy that aligns with its specific recovery objectives, risk tolerance, and compliance requirements.

Additional Notes

Automatic vs Manual Backups: Dynamics 365 automatically creates backups weekly; manual backups are recommended before significant changes.
Environment Types: Backup and restore options may vary slightly between production and sandbox environments.
Auditing: Keep a log of backup and restoration activities for compliance and operational tracking.

Extra-

You can convert any trial instance to Production env from admin canter and start the backup