Bridging Dataverse and External APIs with Custom API

Modern business applications rarely operate in isolation. Organizations increasingly need their Microsoft Dataverse environments to interact with external systems such as CRMs, ERPs, banking systems, SAP, ServiceNow, payment gateways, logistics platforms, or AI-enabled services.

Custom API in Dataverse acts as the perfect bridge—a controlled, secure, and scalable layer that connects Dataverse to external APIs.

 What Does “Bridging Dataverse and External APIs” Mean?

To “bridge” Dataverse with an external API means:

  • Dataverse triggers a process (from a plugin, Power Automate, Canvas App, Model-Driven App, or even external systems)
  • Custom API receives the request
  • Custom API executes server-side code (Plugin) written in C#
  • The code makes an outbound call to an external REST/SOAP endpoint
  • Returns the processed result back to Dataverse, or updates records

This creates a secure, governed, and high-performance integration layer—without exposing Dataverse directly to outside systems.

Why Use a Custom API Instead of Direct Calls?

Custom APIs centralize Integration Logic → making Dataverse a strong integration hub.

Technical Architecture


Steps to Build a Custom API That Calls External APIs

Step 1: Create Custom API in Dataverse

You define:

  • Name / Unique name
  • Bound or Unbound
  • Parameters (Input & Output)
  • Plugin type to execute
  • Authentication & permissions

Example input parameters:

  • CustomerId (GUID)
  • Amount (Decimal)
  • ActionType (String)

Step 2: Write the Custom API Plugin

In your C# plugin:

a. Read input parameters

var customerId = (Guid)context.InputParameters["CustomerId"];

var amount = (decimal)context.InputParameters["Amount"];

b. Call Azure Key Vault / Environment Variables

Retrieve secrets like API keys, endpoints:

string apiKey = Utils.GetEnvironmentVariableValue("ExternalAPIKey", service);

string endpoint = Utils.GetEnvironmentVariableValue("CustomerEndpoint", service);

c. Prepare HTTP request

var httpClient = new HttpClient();

httpClient.DefaultRequestHeaders.Add("x-api-key", apiKey);

var payload = new 

{

    Customer = customerId.ToString(),

    Amount = amount

};

var content = new StringContent(JsonConvert.SerializeObject(payload), Encoding.UTF8, "application/json");

d. Send request to external API

var response = await httpClient.PostAsync(endpoint, content);

var result = await response.Content.ReadAsStringAsync();

e. Map returned values to output parameters

context.OutputParameters["Status"] = "SUCCESS";

context.OutputParameters["APIResponse"] = result;

Security Considerations

a. NEVER store API keys in code

Use:

  • Environment variables
  • Azure Key Vault
  • Azure Managed Identity (preferred)

b. Role-based access

Only grant permission to:

  • Users
  • Apps
  • Power Automate
  • Plugins

who should access this API.

c. Throttling & cleanup

Limit how often it can be triggered to protect external systems.

Business Use Cases

Customer Validation

  • Dataverse sends customer details → external service validates → returns status.

Credit Score / KYC Checks

  • Call external financial APIs.

Inventory Lookup

  • Check stock from SAP or Oracle before confirming sales orders.

Shipping / Logistics Integration

  • Dataverse → DHL/UPS API → Get tracking number.

Payment Gateway

  • Dataverse → Razorpay/Stripe → Confirm payment.

AI-powered Insights

  • Dataverse → Azure AI / OpenAI → Generate analysis.

Custom API allows Dataverse to become an integration orchestrator.

Performance Benefits


Best Practices

  • Use unbound Custom API for integrations (most common).
  • Use Azure APIM or Logic Apps as intermediate layers when needed.
  • Implement resiliency: retries, timeouts, circuit breakers.
  • Log request/response using Application Insights.
  • Use Managed Identity for outbound API authentication.

Summary :

Custom APIs in Dataverse act as a strong, secure, and high-performing bridge between Dataverse and external enterprise systems. They offer complete control over request handling, authentication, transformation, and output, making them the most robust integration strategy in the Power Platform ecosystem.

Comments

Post a Comment

Popular posts from this blog

Effective Strategies for Debugging Plugins in Dynamics CRM

Image
In a recent interview, I was asked about debugging plugins in Dynamics CRM. The interviewer specifically wanted to know my approach to plugin debugging. In response, I mentioned using the Plugin Registration Tool profiler. However, I later realized there are multiple methods to debug plugins in Dynamics CRM/Dataverse, each essential for efficient troubleshooting. Debugging plays a crucial role in development, and having a solid understanding of various debugging approaches can help streamline issue resolution in Dynamics 365. Here, I'll explore different techniques for debugging plugin code. There are below options to use in the plugin in Dynamics CRM/Dataverse ITracingService : In Dynamics CRM plugin development, ITracingService is a service provided within the plugin's execution context that logs information for tracing and debugging. It allows developers to capture real-time. Plugin Profiler : A plugin profiler in Dynamics CRM (or Dataverse) is a debugging tool in the Plugi...
Read more

Connecting the Dots: FetchXML and Web API Integration in Dataverse

Image
 In Dataverse, FetchXML and the Web API are two powerful mechanisms for retrieving data and interacting with entities. Here's a brief overview of each and how they can be integrated: 1.    FetchXML :      -   Definition:   FetchXML is a proprietary query language used in Microsoft Dynamics 365 and Dataverse for querying data from entities.    -   Usage:   FetchXML queries can be used to retrieve data based on complex criteria, perform aggregations, and filter records.    -   Features:   FetchXML supports various query expressions, including conditions, sorting, grouping, and aggregation functions.    -   Integration:   FetchXML queries can be executed programmatically using client-side scripting, server-side code, or through tools like the Dynamics 365 Web API. 2.    Web API :      -   Definition:  ...
Read more

Decode and Fix: “This Data Type is Unsupported for Evaluation” in Power Apps

Image
 One common frustration when building Canvas Apps over Dataverse is encountering this cryptic error:  “This data type is unsupported for evaluation” This message typically appears when Power Apps cannot process or render a specific Dataverse column type within a control or formula. While it may seem vague, it’s usually tied to specific patterns involving complex column types or runtime data structure mismatches. In this blog, we'll explore common causes, scenarios, and practical fixes from both a developer and architectural standpoint. Root Causes of the Error 1. Polymorphic Lookups Dataverse supports polymorphic relationships (e.g., `Owner`, `Customer`, `Regarding`) that can point to multiple entity types. These lookups can't be directly evaluated in Power Apps unless you cast the reference explicitly. Use: If(     IsType(ThisItem.Customer, Account),     AsType(ThisItem.Customer, Account).Name,     AsType(ThisItem.Customer, Contact).FullName ) 2....
Read more

Exploring the Differences: Managed vs. Unmanaged Solutions in Dynamics CRM/Dataverse

Image
In Dynamics CRM/Dataverse, solutions are central to Application Lifecycle Management (ALM) , providing a structured way to manage, package, and distribute customizations across environments. Microsoft uses solutions to transfer apps and customizations by exporting them from one Dataverse environment and importing them into another.  Each solution is authored and maintained by a publisher and includes components like Power Apps (canvas and model-driven), flows, entities, forms, connectors, web resources, and configurations—excluding business data. Solutions streamline ALM practices within Microsoft Power Platform. In Dynamics CRM/Dataverse, there are two types of solutions: Managed and Unmanaged . When planning an implementation, it’s important to understand the advantages and disadvantages of each to make an informed decision. Let’s explore both types to determine the best approach for development and deployment. In Dynamics 365 CRM, a managed solution is a fully packaged solution ...
Read more

How to Write and Understand a Dynamics CRM Plugin

Image
 Here’s a sample plugin code in Dynamics CRM written in C#, along with a detailed explanation of each line. This plugin will update the "Description" field of an entity whenever a record is created. Sample Plugin Code using System; // For basic .NET types using Microsoft.Xrm.Sdk; // Provides key interfaces for CRM plugin development using Microsoft.Xrm.Sdk.Query; // For performing queries against CRM data namespace SamplePluginNamespace // Custom namespace for the plugin { public class SamplePlugin : IPlugin // Plugin class implementing the IPlugin interface { public void Execute(IServiceProvider serviceProvider) { // STEP 1: Retrieve the context of the plugin IPluginExecutionContext context = (IPluginExecutionContext)serviceProvider.GetService(typeof(IPluginExecutionContext)); if (context.MessageName != "Create" || context.St...
Read more

L1, L2, and L3 Support Explained

Image
  L1, L2, and L3 Support Explained In IT and software support, L1 (Level 1), L2 (Level 2), and L3 (Level 3) represent different tiers of technical support, each handling issues of varying complexity. 1️⃣ L1 Support (Level 1 - Frontline Support) Role: First point of contact for users/customers Responsibilities: Handles basic issues such as password resets, user access, and general troubleshooting. Uses a knowledge base or predefined scripts to resolve common problems. Escalates complex issues to L2 if not resolved. Communicates with customers via phone, chat, or email. Records tickets in a helpdesk system (e.g., ServiceNow, Jira, Zendesk). 🔹 Example: A user is unable to log in due to incorrect credentials → L1 resets the password. 2️⃣ L2 Support (Level 2 - Technical Support) Role: More in-depth troubleshooting and problem-solving Responsibilities: Resolves moderate to complex technical issues that L1 cannot handle. Analyzes logs, configurations, and system...
Read more

Plugin Execution Pipeline Demystified: A Must-Know for CRM Architects

Image
If you design or operate Microsoft Dynamics 365/Dataverse solutions, understanding the Plugin Execution Pipeline is essential. Plugins are the primary extensibility mechanism for implementing server-side business logic. This guide explains the pipeline in plain, technical terms, shows where and how plugins run, and lists practical guidance for reliable, performant solutions. 1) What is the Plugin Execution Pipeline? The pipeline is the ordered set of stages and execution contexts in which server-side events (messages) are processed. When an operation (Create, Update, Delete, Assign, Retrieve, etc.) occurs, Dataverse builds a request execution pipeline and executes registered plugin steps at configured stages. Plugins can inspect and modify data, cancel operations, and trigger side effects. 2) High-level flow (what happens during an operation) Client/API call (UI, Web API, SDK) initiates an operation. Platform core logic performs pre-checks and builds the execution context. Plugin ste...
Read more

Stop Struggling with Plugins: Learn IOrganizationService the Smart Way

Image
Have you ever deployed a Dataverse plugin, only to watch it fail silently or act unpredictably? Most of the time, the missing piece is understanding how to communicate with Dataverse the smart way—using IOrganizationService . In the world of Dataverse, every plugin waits for its turn when something changes. The plugin looks around and wonders, “How do I talk to the database?” That’s when IOrganizationService steps in like a trusted messenger, ready to carry out requests and bring back results. “ Need to create a record? I can handle that,” it says. “ Want to update or delete data safely ? Leave it to me.” It even speaks the secret language of Dataverse messages like Assign and SetState . But it never works alone— IOrganizationServiceFactory brings it to life, deciding whether it should act as the user or as the powerful system account. Working together with IPluginExecutionContext , it always knows who triggered the action, which record is involved, and when to respond. What is IOrgan...
Read more

Dynamics 365 Plugin Life Cycle Simplified for Business Users and Developers

Image
The Dynamics 365 Plugin Life Cycle describes the series of steps that a plugin follows when a record is created, updated, deleted, or otherwise changed in Dataverse. In simple terms, a plugin is like an automated rule that wakes up when something happens in the system. As the event occurs, the plugin passes through different pipeline stages— Pre-Validation, Pre-Operation, Post-Operation, and Asynchronous Processing —each with its own purpose. Pre-Validation allows very early checks before the system applies business rules, Pre-Operation lets you validate or modify data before it is saved, Post-Operation triggers after the record is committed to the database, and Async handles background tasks like integrations or long-running operations. Understanding this life cycle helps ensure business logic runs at the right moment, prevents bad data from entering the system, and enables smooth automation and integrations within Dynamics 365. Plugins in Dynamics 365 are pieces of custom code that ...
Read more

Step-by-Step Guide to Building Custom APIs in Dataverse

Image
Custom APIs in Microsoft Dataverse allow developers and architects to create their own reusable, secure, and well-defined service endpoints that extend the standard Dataverse Web API. Instead of relying solely on out-of-the-box messages (like Create, Update, or Retrieve ), Custom APIs let you define your own business operations — complete with input and output parameters — that encapsulate complex logic and can be called from Power Automate, Power Apps, or external systems. These APIs are registered once and behave like native Dataverse operations, making them ideal for implementing domain-specific logic, integrating with external services, or simplifying client-side development. From a technical standpoint, a Custom API can be implemented through a plugin class, where the backend logic is written in C#. Developers can control security through privilege definitions and ensure consistency by centralizing key business rules. Custom APIs are particularly valuable in enterprise environmen...
Read more