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My company has signed up an Enterprise Contract With Online SharePoint 2013 E3/E4 licence. So I have a challenge setting up my development environment with no on-premises environment available.

Any recommendation? Apart from using NAPA for App development and Visual Studio for other development which of course requires an on premises environment. I really find it challenging to set-up development environment with SharePoint Online only solutions.

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You can still use Visual Studio to create SharePoint Apps without requiring SharePoint installed locally. That is a benefit of using the App Model. Get the tools for VS2013 here

The only case that would require SharePoint installed would be if you were creating Server side code (which you can't do in SharePoint online anyways) or Sandboxed solutions, which you can use in SharePoint Online but be aware that the managed code part of Sandboxed solutions have been deprecated. See here

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    Also he might need at least server with IIS if they plan to have some server side code, for example in Azure. – luccio Jul 25 '14 at 7:33
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Office 365 includes all the tools and resources you need to jump in and start building apps:

1) SharePoint Online developer site, customized for creating and testing apps

2) You can install "Napa" Office 365 Development Tools, to create your first apps right within the browser

3) Office Professional Plus 2013

4) Exchange Online

When you finish provisioning an Developer Site, you can start developing apps for Office and SharePoint in two ways:

1)by using Visual Studio 2012 or

2)by installing the "Napa" Office 365 Development Tools without having to install Visual Studio 2012.

Create a new Office 365 Account (http://msdn.microsoft.com/en-US/office/apps)

Download and install Visual Studio 2012 Professional or above (http://www.microsoft.com/visualstudio/eng/downloads#d-professional)

Download and install Office and SharePoint Developer Preview Tools for Visual Studio 2012 (http://msdn.microsoft.com/en-US/office/apps/fp123627);

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One must needed tool for development is SharePoint Designer 2013

This helps you in

Editing Pages/ templates, Managing List, Managing Workflows

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