Ignite 2025: Microsoft advances MCP servers for Dataverse, Dynamics 365 F&O

Microsoft continues to advance their development of MCP (Model Context Protocol) servers for Business Applications as an enabler of Dynamics 365 and Power Platform AI scenarios. At Ignite 2025, the company announced updates to their MCP servers on both Dataverse and Dynamics 365 F&SCM. 

Dataverse MCP Server is now generally available, Microsoft announced, and it can be used when building agents with Copilot Studio or GitHub Copilot in VS Code. It includes a natural language interface for real-time responses to queries from users and tooling that allows users to read, create, or update table data. It also supports knowledge search and executes some prompts, according to the company.

The MCP effort for Dynamics 365 Finance and Operations apps, or “Dynamics 365 ERP” as Microsoft now refers to it, has been expanded this week with a dynamic framework that replaces the earlier fixed set of operations and queries. Actions and APIs can be registered and updated dynamically, including with customizations.

In a blog post announcing the updates, Microsoft’s Jared Hall explained:

The tools in the new [MCP] server work by enabling the agent to navigate server forms to complete tasks. Agents work with the application data and business logic through server APIs just like humans perform tasks in the application client. Static tools with very specific actions, like Find Approved Vendors or Release Purchase Requisition Lines, have been replaced. The agent uses the new tools to open forms, set field values, and click actions available on the form.

In reviewing the updated MCP server for D365 F&O, Microsoft MVP Andre Arnaud de Calavon called the improvement “mind-blowing”, but also that the capabilities, still in preview, are slow to respond and behave inconsistently depending on the type of agent interface.

The Dynamics 365 ERP MCP server for analytics will reach public preview in December. It will provide “governed access” to the ERP analytics data available in Business Performance Analytics (BPA), according to Microsoft.