Microsoft Dynamics 365: Online/Cloud Vs. On-Premise

By Joe Rafanelli

As a brand, Microsoft Dynamics has shown its presence in the market for quite some time. Microsoft Dynamics 365 is the latest innovation from Microsoft, which combines the capabilities of both CRM and ERP. Data is at the core of Dynamics 365. Being able to share data is incredibly important, as is the ability to access it anywhere, anytime. This is one of the main reasons Dynamics 365 has succeeded in the market space. As an individual player, Microsoft Dynamics 365 provides one unified solution for a business’ needs.

It’s always recommended to deploy Microsoft Dynamics 365 in the cloud, rather than on-premise. There are several benefits to deploying Dynamics 365 in the cloud. Perhaps the most important factor is the cloud platform on which Dynamics 365 runs: Azure. Azure provides a secure and reliable channel for communicating with external cloud-based applications. Additionally, Azure leverages better security, redundancy and failover capabilities. 

Let’s consider some of the other factors, when choosing to deploy in the cloud or on-premise.

Security Concerns – Every day we hear about large organizations being targeted and hacked. In large organizations, security may not be a big concern as they automatically upgrade to the next generation of firewall. Cloud provides a second level of defense against various attacks. Although, it is easy to administer various functions through the cloud, security is not one of them. It should be noted that the security which is built into the cloud version of Dynamics 365 exceeds all on-premise versions, most of the time. 

Configurability Issues – When using Dynamics 365 on-premise one can directly access the backend database, allowing users to make a few changes a little more efficiently (than if hosted by Microsoft). By doing so, the system is at risk of becoming incompliant with Microsoft. This can also lead to greater problems when it comes time to upgrade. 

When online, you are forced to comply with the best practices customizing and configuring Dynamics 365. This may not be a perfect approach, but it will minimize long term risks to your system.

Online Only Add-on Features – Microsoft releases many features online. When on-premise, you will not have access to those features, but when using Dynamics 365 in the cloud, it is much easier to deploy third party add-ons, as the infrastructure is more consistent. 

Running Backups – Running routine maintenance including things like regular backups and restoring them if needed, will bog down your IT team, if you’re using an on-premise server. Companies will ultimately have to spend a lot of time and money for hardware and software upgrades to keep the servers up-to-date.

Difference in Cost – This depends on a number of factors. It is far more complicated to understand and manage licenses for on-premise servers, than it is for cloud based Dynamics 365. On-premise is generally more expensive due to the time required for installation and maintenance. Cloud offers a subscription model which only accounts for the operational expenses based on service usage.

As you can see there are definite advantages in using a cloud based service. Moving from Dynamics 365 on-premise to the cloud, solely depends on what is more appropriate your company. Some may have restrictions on sharing critical information, at which point the cloud may not be a suitable option. Moving Dynamics 365 to the cloud is the ultimate solution for companies looking to reduce IT needs, lower operational costs and benefit from faster setup & implementation.

Contact Macrosoft today to move your MS Dynamics to Cloud


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By Joe Rafanelli | June 26th, 2018 | General

About the Author

Joe Rafanelli Manager, Technical Solutions for Macrosoft

Joe Rafanelli

Joe Rafanelli is the Manager of Technical Solutions at Macrosoft. In this capacity, Joe acts as the single point of contact for Macrosoft’s migration solutions. Additionally, he collaborates with internal technology analysts to understand requirements, work scope, and maintain relationships with clientsb to ensure satisfaction.

Prior to joining Macrosoft in May 2017, Joe had over 25 years of experience in the Banking Industry. Equally, Joe focused on Account Management, Project Management, Implementation Management, and Product Development. Moreover, Joe is excellent at improving the client experience by driving change management projects to completion. Previously, Joe held the following positions in the following institutions: JPMorgan, Citigroup and Brown Brother Harriman.

Joe has B.S. Finance, MBA Investment Finance, Project Management certificate & Database Management certificate

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