When you try to save custom workflow that's created in sharepoint designer, you may get the error message like "
Error while saving a workflow via sharepoint designer Office 365: Server-side activities have been updated. You need to restart SharePoint Designer to use the updated version of activities".
The resolution is simple.
- Close the SPD
- Delete the following folders where your SharePoint designer is installed
<user profile>\appdata\roaming\microsoft\SharePoint Designer\ProxyAssemblyCache
<user profile>\appdata\local\microsoft\websitecache\<sitename