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Dynamics 365 Business Central: Cloud vs. On-Premises Deployment

Posted by Alanna Friedberg on Aug 10, 2021 9:00:00 AM

Dynamics-365-Business-Central-Cloud-vs.-On-Premises-DeploymentOnce you settle on Dynamics 365 Business Central as your business management solution, you need to figure out the best deployment method for your organization. While many companies are moving to cloud-based infrastructure, you may prefer installing your Dynamics 365 Business Central instance on-premises. There’s a lot to consider in your choice of deployment, including security concerns, integrations with other business systems, and your ability to make critical information available across the enterprise.

Let’s look at what’s involved in Microsoft Dynamics 365 Business Central in the cloud vs. on-premises. Hopefully, you’ll gain a better sense of which deployment model would best fit your organization. 

How to Install Dynamics 365 Business Central On-Premises

A Dynamics 365 Business Central on-premises deployment involves setting up and configuring servers your organization owns to host the solution. Because there’s no need to connect to the internet, you can still retain access and control over your Dynamics 365 instance in case of an internet outage. Another benefit of deploying on-premises is that you maintain full ownership of critical business data.

Let’s look at what’s involved in setting up an on-premises installation of Dynamics 365 Business Central. First, complete the following steps before you start the Setup process.

  1. Start by planning out your deployment. Your evaluation should include identifying the components from Business Central you wish to install.
  2. Make sure the target computer for your deployment meets all hardware and software standards necessary to support an instance of Dynamics 365 Business Central.
  3. Verify that you have administrative rights on the computer designated for you to run Setup.
  4. Figure out what HTTP ports you have available for components. Make sure your selected port number isn’t already in use by another service.

Once you complete all the above, it’s time to run Setup.

  1. Locate the installation folder for your Dynamics 365 Business Central instance and click setup.exe.
  2. Keep following the Setup instructions until you see the Dynamics 365 Business Central page appear.
  3. Click Advanced installation options to install Business Central on your target computer or a local server. Follow the instructions from there to complete the installation.

How to Install Microsoft Dynamics 365 Business Central Cloud Instance

Many Dynamics 365 Business Central customers opt for a cloud instance of the platform. The most significant benefit of taking that route is that you can seamlessly implement different features from Business Central without having to purchase additional hardware or add IT resources. In addition, there are many extensions available that let you extend the functionality of your Business Central solution without having to change the codebase.

Start by signing up for a Dynamics 365 Business Central trial or setting up a subscription. Next, use the Assisted Setup guide to create an empty company. From there, you can start working with your company data and configuring various components of Business Central. Another alternative is to set up a sandbox environment where you can try out different features of the platform. 

Dynamics 365 Business Central On-Premises vs. Cloud

Now that we’ve gone over implementing Dynamics 365, let’s contrast the benefits of Dynamics 365 Business Central on-premises vs. cloud.


In addition to having complete control over your data, installing an independent instance of Business Central on-site gives you the flexibility to manage customized installations of applications. You can also use the setup to create intelligence reports using a platform like SQL Server Reporting Services (SSRS).

Some drawbacks to managing an on-premises setup of Business Central include:

  • Your IT department must schedule and implement any necessary updates.
  • You have to install additional servers to expand your available storage.
  • You may spend more on hardware to support the need for additional backup.
  • You must prepare for a large up-front financial investment.
  • You won’t have certain Dynamics 365 Business Central capabilities available.

Cloud Instance

Because your organization stores applications on remote servers, you don’t have to spend much money on maintenance. In addition, you can set up a subscription for more storage space versus spending a lot of money on costly server hardware. The cloud instance of Business Central comes with AI capabilities, which you can use to take your business application functionality to a new level. Microsoft handles any updates to the Business Central platform automatically, which means one less maintenance task for your IT team.

The biggest drawback to relying on a cloud instance of Business Central is your reliance on the internet. If you lose power for any reason, your workers don’t have a way of getting to business applications essential to their job roles.

Get Help with Your Business Central Instance

IES can help your company get the most from your Dynamics 365 Business Central platform, whether you decide to install it on-premises or in the cloud. Contact us today to set up a consultation with one of our technology experts.

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Topics: Business Central