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In this video the speaker demonstrates how to add a target environment in a migration process. They explain that a local hybrid environment is chosen when there is already an ADC (Azure Data Center) communicating with the cloud. They provide step-by-step instructions on how to add the target environment, including entering the necessary credentials and installing the ODMA (On Demand Migration Agent). They also mention the importance of extending the schema for Exchange if mail properties are involved in the migration.