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Is this a Developer Toolkit limitation? Connect CRM Online with Office365 account inside Visual Studio

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Does the Visual Studio Dynamics CRM connection work for CRM Online with an Office365 account? Whenever I am trying to connect with my CRM Online credentials, it shows "Authentication Failure".

I tried with the CRM package template or the solution template inside Visual Studio. When I get prompted to connect to a Dynamic CRM server, I put "MY_ORGANIZATION.crm.dynamics.com" and selected the HTTPS option, and then put in my .onmicrosoft.com account ID and password. I always hit the Authentication Failure error.

Searching through the internet shows a couple of walkthroughs of entering information for this dialog but none of them shows an example for an Office365 credential for CRM online (one looks like Windows Live ID account).

QuickStart example

I then followed some suggestions in the forum to troubleshoot my connection issue using the "Quick Start" sample from the Developer Kit. The "Quick Start with Simplified connection" project runs perfectly after putting my CRM online information in the app.config file. However, the "Quick Start" project only works if I comment out the code where it attempts to use single sign-on with my domain credential (line 652 of CrmServiceHelpers.cs) so I get a chance to enter my username/password in the console.

// For OnlineFederation environments, initially try to authenticate with the current UserPrincipalName
// for single sign-on scenario.
/*else if (config.EndpointType == AuthenticationProviderType.OnlineFederation && config.AuthFailureCount == 0)
{
    config.UserPrincipalName = UserPrincipal.Current.UserPrincipalName;
    return null;
}*/

However, I don't know how to apply this to the Visual Studio packaging solution template or the CRM Explorer since there's a bunch of custom MSBuild tasks to perform the deployment. I did find some information that the connection information being stored in the .suo file. Is there a way I can workaround this by manually entering my connection information in the .suo and/or Microsoft.CrmDeveloperTools.CrmClient.targets file?

Thanks!


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