Microsoft Dynamics CRM On-premise vs Online
Learn the differences between Microsoft Dynamics CRM & 365 on-premise and online
Deciding between Microsoft Dynamics CRM on-premise vs online can be confusing. This post will help you to decide on the deployment model that best fits your organization.
First, lets dispel the thought that your data is not safe in the cloud. My response when I hear that is straight forward; Microsoft’s data centers are a lot more secure than yours will ever be. In the US alone, Microsoft has 8 data centers and worldwide they have more than 60. Microsoft spends millions of dollars per year on data center security alone. If you still don’t think your data would be more secure in Microsoft’s data center, read the Trust Center info on Dynamics CRM/365.
Deployment - On-Premise vs Online - Microsoft Dynamics CRM & 365
Microsoft Dynamics CRM & 365 Online is a hosted, software-as-a-service (SaaS) application. SaaS applications are essentially rental models, you pay a monthly fee to use the application. This makes the online version a opex or operating expense vs a capex or capital expense. This can be an important part of the decision and you should consult your accountant.
No hardware or supporting software needed – Microsoft Dynamics CRM and 365 Online require no infrastructure hardware or software, users simply run the application through a browser, the Outlook application or mobile application. This can also be a significant part of the decision.
Limited IT involvement – Dynamics CRM Online implementations and ongoing support do not require much involvement from your IT department. No hardware or software to maintain, backups are performed and managed by Microsoft as well.
Microsoft Dynamics CRM & 365 On-Premise gets installed on servers either in your data center or at a hosting partners. The on-premise version is a capex or capital expense, you pay for the licensing upfront (or over 3 years via the interest free spread pay option Microsoft offers). The hardware and infrastructure related costs are also capex.
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Minimally, the on-premise model requires two servers – one for the Dynamics CRM/365 server application and the other for SQL Server. A third and/or fourth server may be required for workflow server and/or a reporting server.
The on-premise model requires Microsoft SQL server, Windows Server, Internet Information Services and additional supporting requirements.
IT is heavily involved in the deployment of the on-premise model. This can impact the project timeline substantially and increases the cost of the implementation.
Updates / Version Upgrades
Microsoft Dynamics CRM & 365 Online – Updates and version upgrades are pushed down by Microsoft. Customers cannot control the date that an upgrade gets deployed. As a best practice, we recommend opt’ing into the early releases in your sandbox to allow time to test before deploying to production. We offer a full managed service for Microsoft Dynamics CRM & 365, part of this service is that we manage version upgrades for you.
Microsoft Dynamics CRM & 365 On-Premise – You self manage updates in the on-premise model. To obtain new versions as they are released you must have Software Assurance active. Don’t let your software assurance lapse or you will need to re-purchase the product to obtain upgrade versions.
Dynamics CRM & 365 Features Available Only in the Online Model
One of the major differences between Dynamics CRM & 365 On-Premise vs Online is that some significant functionality is only available in the online model:
- Project Management capabilities – Dynamics 365 for Project Service Automation
- Web Portals – self-service portals for customers, partners, employees or communities
- Voice of the Customer – survey solution to manage questionnaires and other feedback
- Advanced Artificial Intelligence Capabilities – in-built AI based features like relationship insights, cross-sell recommendations etc are not available in the on-premise model
- Organization Insights Dashboard – a user adoption tool that measures user activity
- Gamification – another user adoption feature
- Integrations with the online versions of Office apps – Excel Online, Word Online and OneDrive for Business
- Mobile offline synchronization
- Dynamics 365 for Marketing – the newly released marketing module
- Dynamics 365 for Talent – human resources management
- Unified Interface – the new user interface
- Microsoft Teams Integration
- Playbooks – sales processes
- Microsoft Flow integration
- PowerBI integration
The bottom line
Let’s face it, cloud/SaaS applications are the focus of software developers because of the predictable recurring revenue, one of the most significant factors in valuation of a software company. Microsoft has made it clear, the bulk of investment and innovation will be done in the cloud first. Some of the innovation will trickle down into the on-premise version but not all.
Our client mix is 80% cloud and 20% on-premise however the large implementations (over a few hundred deployed users) are still on-premise.
Let us help you decide the best deployment model
BEWARE – Many Microsoft Dynamics CRM & 365 partners do not have expertise in the on-premise deployment model. Our team has 16+ years experience with the platform, we go back to version 1 before a cloud or online model existed. We are experts in both the online and on-premise models.
Give us a call, email or contact us to talk to an expert who can help you decide the best deployment model