There are two main ways to host Microsoft Dynamics 365. Either by using Microsoft Dynamics 365 Online, hosted in the cloud (Azure) or Microsoft Dynamics 365 on-premises using your own local server.
It’s worth noting that hybrid deployments are also viable whereby data is stored locally on a server running your on-premises solution whilst the system is fully integrated with the Microsoft cloud in order to access the advantageous cloud-based services e.g. machine learning, business intelligence and development sandboxes. Hybrid deployments are often set up for customers looking to migrate to the cloud from on-premises.
So, to recap, the main ways in which Dynamics 365 can be hosted is either:
In this blog, we explore each of these hosting types to provide you with all you need to know when considering your Dynamics deployment. Depending on your organisation’s structure and requirements, there are several aspects to consider which will help you decide on the optimal setup.
Both versions of Dynamics provide powerful features and capabilities, but each type equally has its own advantages and drawbacks so it’s important that you evaluate your options to make an informed decision on how to host the software.
Please note, we have detailed the benefits and different clearly in a suitably formatted Microsoft Dynamics 365 Online vs On Premise comparison table shown further down.
If you choose to go with an on-premises deployment, existing data centre investments can be leveraged as the solution would be stored on this local infrastructure. Furthermore, you also have full control over the setup which will allow you to configure it to meet the necessary regulatory and compliance needs of your organisation. You can also comply with data sovereignty rules in regions where no Azure Data Centres exist and ensure business continuity in areas where there is restricted public, cloud infrastructure.
Business data would be disconnected from the cloud and therefore some connectivity is required for system management and any software updates you’d like to perform. To do this, you would need to enable these through Microsoft Dynamics Lifecycle Services (LCS), a cloud-based application lifecycle management service. Data that is related to the configuration and customisation of the application may be stored in the cloud. MORE HERE!
As aforementioned, the solution and data is yours to own and manage and therefore an amount of maintenance and management must be taken on by the customers. These responsibilities would be as follows:
The additional costs to deploy and manage these capabilities may lead to high costs and a great total cost of ownership.
The main benefits of deploying your Dynamics 365 solution on-premises are as follows:
The main drawbacks to deploying your Dynamics 365 solution on-premises are as follows:
Cloud deployments of Dynamics 365 provide a service that is easy to scale up or down as required as well as having your business data reside in data centres that are fully managed by Microsoft (Microsoft Azure). The time spent implementing your Dynamics 365 solution can be significantly reduced as few customisations may be required and there’s no need to worry about the additional costs of hardware and infrastructure as this is included in your licence fee.
Cloud deployments provide high availability, disaster recovery mechanisms, sandbox environment, and application lifecycle management combined with cloud-based systems for intelligence, infrastructure, compute and database services. Furthermore, you will benefit from automotive feature updates, bug fixes and security patches as they are released with no additional hardware costs enabling your users to be at the very forefront of the latest technology tools.
Although less effort is required to manage updates when hosting Dynamics 365 online, customers should still be aware that there are regular updates to the software which needs to be considered (Dynamics 365 updates are twice a year, occurring in April and October). Microsoft will push new features into preview months before general availability which allows customers to test out the new functionality before it is forcefully turned on for all environments globally and by each data centre region. If your Dynamics environment has been heavily customised, these features should be suitably tested to ensure that your organisation is not affected when general availability push occurs.
Therefore, updates mean that organisations operating with cloud deployments need to:
The main benefits of deploying your Dynamics 365 solution in the cloud are as follows:
The main drawbacks to deploying your Dynamics 365 solution in the cloud are as follows:
Choosing between on-premises vs cloud used to be a harder decision 10 years ago, when cloud internet infrastructure was less advanced, less secure and more expensive. But since then, the technology has come much further, and the security of personal and corporate data has drastically improved and is likely much better than that of using your own, on-premises option. These factors, alongside a consistent reduction is storage costs has driven huge growth in popularity of the cloud and it has driven wide expansion of cloud infrastructure globally by the likes of tech giants such as Microsoft, Amazon, Apple and more…
As a result of this improvement, there appears to have been a shift in opinion from corporations and organisations that now certainly consider the cloud to be a perfectly feasible, and often better option than on-premises.
It now seems more logical to opt for the cloud hosting whereby total lifetime cost and effort is greatly decreased. But when considering where to host your Dynamics 365, it’s really down to your unique situation. Factors such as your geographical location, the nature of your business, the sensitivity of your business data and the legislation around the data needs to be respected and evaluated before making a decision. But in general, the majority of organisations who use Dynamics 365, will have a better experience by opting for a cloud deployment.
More security features and facts can be found here.
The table below highlights the important differences of both Microsoft Dynamics 365 Online and Microsoft Dynamics 365 On-Premise to assist you in making the correct choice for your business.