Error Doing a Full Data Sync

Today I am setting up a proof of concept for the retail solution in AX 2012 R3. As a base I am using the Microsoft AX 2012 R3 demo VM deployed to Azure using LCS

When Trying to do a  full data sync I got the following error:
”The target principal name is incorrect. Cannot generate SSPI context”

SSPI context has to do with Service Principal Name in Active Directory. The Service Account for SQL (contoso\sqlsvc) needs to have SPN set like this:

setspn –A MSSQLSvc/AX2012R2A:1433 contoso\sqlsvc
setspn –A MSSQLSvc/ contoso\sqlsvc

Where AX2012R2A and are hostname and FQDN for the AX demo VM.

In my case I had duplicate FQDN and no hostname. I cleaned out the duplicates and added the hostname.