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Microsoft Dynamics 365: Cloud vs On-Premises

by Rebecca Webster on

For successful day-to-day operations, most businesses depend on the fast, accurate, and reliable data their ERP system provides. Microsoft Dynamics 365 is one of the biggest ERP solutions available today, with fully integrated systems for financial management, operations, supply chain control, human resources, and more, there really is no surprise.

If your business is currently using a different platform (or none at all), the chances are, you’re looking to purchase the software for yourself.

But before you begin your installation process, there’s an important decision to make: Does your business want it on-premises or hosted in the Cloud?

To help with your decision, we’ve highlighted the pros and cons of each deployment model below.

Microsoft Dynamics 365 in the Cloud

Using a Cloud-hosted instance of Microsoft Dynamics 365 offers a range of advantages for your business. These include:

1.     Zero infrastructure maintenance

When choosing a Cloud-based deployment model, you don’t need to spend time and money managing your in-house servers and hardware. All that’s required is a stable internet connection and you can access your solution whenever. Also, you won’t need to worry about data loss or corruption; The infrastructure supporting your software will be hosted securely, in an off-site location.

2.     Data backups

Backing up important data should be a part of every business’s agenda. Unfortunately, it’s one of those tasks that often gets pushed to the bottom of the list.

Cloud based systems give businesses peace of mind by automatically backing up data. This way, if something were to go wrong, sensitive information would be protected and could be restored via a previously saved backup.

3.     Disaster recovery

In the unforeseen circumstances that your services are interrupted, Dynamics 365 offers robust disaster recovery features to help you get back online as soon as possible. Microsoft’s recovery procedures include storing a duplicate copy of your company’s data on a second server, allowing you to continue operations with minimal disruption.

Additionally, Microsoft offer a financially backed, 99.9% uptime guarantee. So, you can be sure you’re in safe hands when moving to Dynamics 365.

4.     Faster implementation and deployment

As a SaaS platform, Dynamics 365 in the Cloud doesn’t need installing to individual machines. This means configuring and deploying the solution is much faster than traditional, on-premises implementations.

The Dynamics Cloud solution utilises point-and-click setup wizards to help users get set-up and running quickly. However, an important thing to note: the more your business wants to customise the service, the more complicated the implementation will become. This is where an experienced implementation partner is needed, such as Nolan Business Solutions.

5.     Scalability

As you require additional functionality to support the growth of your business, having a scalable and flexible ERP solution is imperative for success. With Dynamics 365 in the Cloud, you can up or down-scale your solution at any time with a simple service request.

With on-premises software however, supporting business growth often means investing in new servers and processors to manage increased demand.

All in all, Dynamics 365 in the Cloud can be as limited or as functional as you need it to be with a range of customisation options.

Microsoft Dynamics 365 on-premises

For all the benefits that come with Dynamics 365 in the Cloud, some businesses may still favour an on-premises implementation. Whether you’ve just invested in new hardware, or due to the nature of your business would prefer to localise data regulation, there are various arguments that could sway your decision towards an on-premises deployment. Here are a few points to take into consideration:

1.     Complete data ownership

For some businesses, hosting data on-premises is a legal requirement. For others, having complete ownership over how and where their data is stored might simply be preferred.

2.     Reliable internet isn’t needed

Unlike Dynamics 365 in the Cloud, on-premises implementation doesn’t require a reliable internet connection to run. So, if your business doesn’t have access to stable internet services, an on-premises implementation is ideal for you.

3.     Full update control

While Dynamics 365 users have control over implementing product updates, certain updates are mandatory and must be done to continue using the service.

With on-premises Dynamics 365, you have greater control over updates and when you’d like them to take place.

4.     No data storage costs

For businesses that already have sufficient hardware in place to facilitate growth, storage costs won’t increase as your database does. This is where Dynamics 365 in the Cloud can become costly. If extra room is needed to store additional data, you’ll need to pay for it.

To conclude: Dynamics 365 in the Cloud or on-premises?

By weighing up the benefits of each deployment method, you should come to the right decision for your business. Although most businesses choose to go down the Cloud-hosted route, it all depends on your needs and what you’re looking to achieve.

For more information on Dynamics 365, contact our expert team today. As Gold ERP Microsoft partners, we have the knowledge and experience needed to take your business software (and business as a whole) to the next level.