Microsoft Dynamics 365 On-Premise & Cloud Compared

Icons showing on premise service and cloud server comparison

With unrivalled flexibility, Microsoft Dynamics 365 is available as a cloud service, or installed as an on-premise database.

Microsoft Dynamics 365 is available in the cloud, or can be implemented as an on-premise or hybrid solution, offering unrivalled flexibility to move from one deployment model to another.

    Dynamics 365 On-Premise

    Software licences are purchased and the database is installed on your server.

    Dynamics 365 Online

    Your data is stored in the cloud, this subscription includes automated product updates.

    Hybrid Deployment

    Purchase the on-premise software and pay a third party to host it.

    Why Dynamics 365 Online is the Most Popular Choice

    Microsoft has adopted a 'cloud first' approach to its release cadence for many years. Many new application and platform capabilities have been introduced as 'cloud-only' putting clear daylight between these respective products.

    Dynamics 365 On Premise (Customer Engagement) v9.1 was released in June 2021 which featured a major update for the Unified Interface to provide performance and usability enhancements.

    New on-premise versions are released every couple of years. In contrast, Microsoft makes automatic weekly updates to D365 Online that cover performance improvements and new features. In addition, two major updates are released each year which can be previewed in non-production environments.

    Cartoon character waving on a cloud

    How Do Dynamics 365 On-Premise & Cloud Compare?

    Dynamics 365 (On-Premise)

    On-premise Dynamics is installed on your server giving you complete control of the management and maintenance of your database.

    • Utilise your existing investments in hardware and IT infrastructure
    • Retain complete ownership of data with an on premise deployment, providing you with full control of how, where and how long you store business and customer data
    • Full control over when upgrades are applied and when app changes are enforced
    • Utilise in house personnel or outsourced IT resources who will manage your system
    • Create your own SQL Server Reporting Services (SSRS) reports
    • Avoid the prospect of cloud data storage costs
    • Doesn't require a fast internet connection

    Dynamics 365 Online (Cloud)

    Your database is protected on Microsoft's secure servers in the UK that are accessed through a web connection. Just increase users or add more capabilities whenever you need and rely on our Dynamics 365 managed service.

    • Implement Dynamics quickly without in house IT resources or incurring hardware expense
    • Avoids the overhead of maintaining a dedicated CRM server
    • Faster mobile access as this does not route through an Internet Facing Deployment
    • Mobile experience easier to configure through responsive Unified Interface
    • Quickly benefit from ongoing product development in weekly updates and two major release waves each year
    • No upfront licence costs or recurring software licence renewal expense
    • Only pay for what you use - increase and reduce subscriptions when needed
    • Predictable monthly subscription
    • Data protected by 5 security layers and disaster recovery service - includes ISO27001 & EU standards compliance
    • Enterprise-grade security - as standard and configured without costly setup or overhead of maintaining ADFS on-premise
    • Built on the Power Platform - with a unifying Common Data Service where Dynamics and Office 365 data is stored and connected with 3rd party apps
    • Power Automate - no need for the installation overhead of this data gateway
    • Included embedded AI capabilities
    • Exchange Online - connecting Dynamics 365 apps and Exchange Online is a simple process in the cloud. For an on-premise implementation there are many infrastructure considerations. These include opening up Exchange web service URLs through a firewall as well as authentication considerations.

    Migrating from Dynamics 365 / CRM On-Premise to the Cloud

    Dynamics 365 Online is changing at a rapid rate. If your business is using on-premise CRM 2016, or an earlier version, there will be a mighty gap in capabilities between these products.

    Mainstream Microsoft support for CRM 2015, 2013 and 2011 has ended so there are increased risks by remaining on these versions. It also means users are deprived of new functions that could improve performance and competitiveness.

    At the outset it is important to know how the new version will quickly be of benefit. Which improvements will have the biggest impact depends on a combination of factors. This includes which teams use Dynamics, and the context of your processes.

    On-Premise to Cloud migration graphic

    Based on recent upgrade and cloud migration projects that Preact has worked on, we've listed some frequent benefits:

    • Integrated web portals, including self-service customer portals with connected case / knowledge management
    • Guided process flows for any repeatable workflow that steer users towards successful outcomes by enforcing process rules and methodology that improves consistency and data quality
    • Improved Office 365 integration to better leverage Outlook, Word, Excel and other Office 365 apps
    • Enabling the Unified Interface for a consistent experience across web and mobile including support for custom-controls
    • Using Power Automate to connect with 3rd party apps and services. This can include delivering a text alert, handle approval processes, or perform other actions in an external app.
    • Improvements to record forms including business rules, calculated fields, text wrapping, field level security and multi-select field options
    • Hierarchies for relational visualisations of accounts, contacts and products
    • Service level agreements featuring timer controls and countdown tickers

    Dynamics 365 On-Premise Upgrade Guide

    Read more about what's new in Dynamics 365 and how Preact will support your organisation's CRM cloud migration.

    Download Guide

    How Preact Will Support Your Cloud Migration

    The latest technology creates an opportunity to build customisations using native functions and move away from solutions that have relied on custom code. This immediately reduces the overhead of maintenance and simplifies the process in preparing for future updates.

    As with any project, upgrading from an on-premise edition of Dynamics requires a solid plan. Our project led upgrades begin with a scoping consultancy. In this engagement we will:

    • Understand how you currently use Dynamics On-Premise
    • Demonstrate how your processes can be mapped to the new version, and how newer capabilities can be utilised
    • Define precisely what data, code and customisations will be migrated
    • Document our findings and recommendations to undertake your upgrade
    • Build a proof of concept if needed

    Rather than directly upgrading a CRM 2011 / 2013 / 2015 / 2016 database, we would replicate this as a new database before migrating data. This avoids carrying across any script, plug-in's or workflows that may cause errors. It also minimises downtime and quickly gets a working version in front of users to gain early feedback and increase participation.

    If your Dynamics product has fallen behind but updating this seems daunting, Preact will help you implement, test and deploy the latest version.

    We have supported many customers in migrating to the latest cloud and on-premise versions of Dynamics from earlier versions. One example was leading chainsaw manufacturer, STIHL GB - read their case study here.

    Please get in touch to find out more and to discuss how we can help you upgrade your Dynamics technology.

    Request Callback

    Contact us to find out more about these options, and discuss your requirement with one of our experts.

    By submitting this form, you agree to Preact's privacy policy and the processing of this data.

    Dynamics Digital Transformation Guide

    Get your guide to increased productivity and customer engagement through connected processes and intelligent insights.

    Download Guide