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Power Platform Community / Forums / Copilot Studio / Error Attempting to De...
Copilot Studio
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Error Attempting to Define Custom MCP Connection Tool - No "On-Premise Gateway"

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Hello all,
 
Apologies if this is a bit of a novice question, but I'm trying to learn the basics of using and designing MCP servers by working through a simple example from the C# SDK documentation (see: the second example here using http). I've copied the example exactly, the code compiles, and the server runs as expected (at least so far that I can ping it and get a reply). However, I ran into an issue when trying to get a test agent in Copilot Studio to connect to it to test the actual tool the example code defines.
 
Per this Learn doc, with the server already running at localhost:3001, I navigate to the agent's tools, click the "Add a tool" button, select "Model Context Protocol" to get to the wizard. Providing a name, description, and a server URL of "http://localhost:3001" yields this error at the top of the wizard: "Something went wrong. Please try again. The custom connector is using a local-host address without on-premise gateway."
 
Now, I understand that attempting to connect an online service to a server that's only locally hosted is a bit foolish, but that's where my understanding of both networking and usage of Copilot Studio stops -- I am a novice. Although, attempting this did lead me to the error message and led to some curiosity that will likely be helpful.
 
Could you help me understand:
  • What does "on-premise gateway" mean? My mind jumps to the word "premises" which would imply that Copilot Studio requires some means of accessing (or gateway to) local data within its environment (the premises). Am I close here?
    • If that interpretation is correct, could someone guide me through (or link to docs explaining) the process of setting that up in Copilot Studio?
  • If things are talking over the network, that obviously means I should be thinking about authentication, right?
    • My naive assumption in trying this example is that auth would be unnecessary if all I wanted to accomplish beyond this example is local manipulation of files.
    • Again, pointing me to relevant documentation would be helpful.
Getting to a point of understanding with this environment and agentic AI in general is a bit of an uphill climb, so all help is greatly appreciated,
Thanks!
I have the same question (0)
  • lbendlin Profile Picture
    8,679 Super User 2026 Season 1 on at
    You are asking Power Automate (a cloud service) to access an on-premise data source.  It cannot do so directly, it requires the help of an Enterprise On-Premise Data Gateway.
     
     
    Then you are asking the gateway (which is usually a cluster of VMs) to connect to "localhost". The gateway doesn't know how to do that. It expects you to specify a FQDN for your data source or (worse) an IP address.
     
     
    (says Power BI but this also applies for PowerPlatform)
     
     

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