Dynamics CRM 2016 Online Rest API with client credentials OAuth flow

Question

I'm trying to authenticate with Dynamics CRM 2016 Online and Azure Active Directory. I was able to follow all the steps here:

https://msdn.microsoft.com/en-us/library/mt622431.aspx and https://msdn.microsoft.com/en-us/library/gg327838.aspx

but these steps demonstrate how to set-up username authentication flow. I would like to use the client credentials flow. I created a new app in Azure AD - a web application. I have a client ID and an app key and I set-up the permissions for Dynamics CRM Online. I'm able to get the access token, but on subsequent calls I get this error:

HTTP Error 401 - Unauthorized: Access is denied

Is there a step I missed? Does anybody know of a post somewhere that provides details on how to get this flow working?

Here is my code:

        string clientId = "<client id>";
        string appKey = "<app key>";

        // Get the authority and resource URL at runtime
        AuthenticationParameters ap = AuthenticationParameters.CreateFromResourceUrlAsync(new Uri("https://<org address>/api/data/")).Result;
        String authorityUrl = ap.Authority;
        String resourceUrl = ap.Resource;

        // Authenticate the registered application with Azure Active Directory.
        AuthenticationContext authContext = new AuthenticationContext(authorityUrl);
        ClientCredential clientCredential = new ClientCredential(clientId, appKey);

        AuthenticationResult result = authContext.AcquireToken(resourceUrl, clientCredential);

        HttpClient client = new HttpClient();
        client.DefaultRequestHeaders.Authorization = new AuthenticationHeaderValue("Bearer", result.AccessToken);
        HttpResponseMessage response = client.GetAsync("https://<org address>/api/data/v8.1/EntityDefinitions").Result;

Answer 1

You need to add an "Application user" and assign a custom Security Role in CRM. See my answer in https://stackoverflow.com/a/48554845/3799784