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What's the Difference Between Dynamics 365 Online and On-Premises?

Posted by Alanna Friedberg on Mar 23, 2023 10:00:00 AM

Difference-Between-Dynamics-365-Online-and-On-PremisesOne of the most significant decisions that comes with making Dynamics 365 your business platform choice is how it will be deployed. While many companies prefer an on-premises installation to have more control, Dynamics 365 has offered a software-as-a-service (SaaS) version you can deploy online since 2018. Of course, there are advantages and disadvantages to both approaches. That’s why we decided it would be a good idea to review the differences between Dynamics 365 online vs. on-premises features.  

What is Dynamics 365 Online?

Microsoft Dynamics 365 online relies on Azure for hosting. The company provides a 99% uptime guarantee for customers to opt for the cloud version of Dynamics 365. Instead of being bound by the storage limits of a local server, Dynamics 365 clients can purchase additional space at any time. That way, companies can continue expanding the platform to support business growth.

Users can connect to Dynamics 365 online wherever they have an internet connection and access to a web browser. That’s critical to companies that must keep field service agents or remote workers connected to company systems. Organizations can build, test, deploy and manage Dynamics 365 from data centers worldwide.

Microsoft handles all the security requirements for Dynamics 365 online. In addition, information housed within Microsoft data centers and client connections are fully encrypted to protect the information from getting intercepted by bad actors.

Because they host the data servers, Microsoft assumes responsibility for maintenance when you opt for Dynamics 365 online. That means your IT staff won’t have to worry about tasks like pushing updates, monitoring security, or backing up data.

What is Dynamics 365 On-Premises?

Hosting Dynamics 365 on-premises requires a commitment to purchasing servers to support the installation. Companies that use this option maintain complete data ownership and assume responsibility for security patches and other updates.

Organizations typically take this route when they’re looking to integrate Dynamics 365 with other business systems. They may also already have made significant investments in server infrastructure. Maintaining control over updates can prevent disruptions to normal business operations.

If you need more space to support business needs, your company will need to purchase additional servers and supporting hardware. Organizations with an on-premises installation don’t have to rely on internet service to connect to business software. That’s critical for companies in locations that might not have reliable internet.  

Benefits of Dynamics 365 Online

Let’s look at some advantages organizations gain by choosing Dynamics 365 online.

Less Money on Maintenance

If you go with Dynamics 365’s cloud-hosted solution, there’s no need to invest a lot of money in server and hardware management. You also don’t have to go through the process of installing Dynamics 365 on individual machines. In addition, cloud deployments eliminate the need to troubleshoot hardware problems or data issues.

Access to Business Intelligence

Dynamics 365 online provides access to Microsoft’s machine learning (ML) and business intelligence capabilities. The software learns from the information it stores and processes, optimizing how it functions for your company. You also receive a 360-degree view of your company’s performance.

Organizations can expand the data capabilities of their Dynamics online instance by connecting to other intelligence tools like Power BI. As a result, you can create a robust analytical and reporting platform while taking advantage of the data guidance offered to clients.

Disaster Recovery

Your company can take advantage of the disaster recovery features that come with Dynamics 365 if something happens to disrupt its services. Microsoft protocols include maintaining duplicate copies of company data on separate servers. That way, users can continue working without major disruptions.

Network load balancing evenly distributes traffic over multiple servers, allowing it to get around any compromised instances. If the primary server fails, Microsoft can also deploy backup servers to keep business operations going.

Cloud Integrations

Dynamics 365 online has built-in integrations that let the platform work with other Microsoft services like Outlook, Office 365, and SharePoint. You can increase worker productivity by allowing them to connect to Excel and Word. Those integrations help you build a more complete picture of what’s happening within your business. Other functions you can accomplish through Dynamics 365 online integrations include the following:

  • Creating new records within Outlook
  • Email tracking
  • Excel and Word file editing
  • Viewing of contact history

Benefits of Dynamics 365 On-Premises

Let’s look at some reasons why your company might want to explore an on-premises Dynamics 365 installation.

Leverage Existing Infrastructure

If you’ve already got staff, servers, and hardware in place to support Dynamics 365 on-premises, you can save by not having to pay monthly subscription costs. However, you don’t receive access to the SaaS product's business intelligence and machine learning features.

That’s something to think about, considering the importance of data in today’s business world. Yes, you can always implement intelligence solutions, but that means investing more money and time in something already integrated into the online version of Dynamics 365.  

Maintain Control Over Updates

Sometimes Microsoft may want to push updates that interfere with other business processes. With an on-premises instance of Dynamics 365, your IT personnel can schedule system updates when it’s most convenient for the business or company users.

Keep in mind that Dynamics 365 online customers receive updates as soon as they are available. Those with an on-premises version typically must wait longer for those same updates. Sometimes those updates are never made available offline.

That kind of responsibility can work against you if there is an emergency. If your data recovery processes fail, your organization may lose its ability to maintain business continuity. It may take more time than you’d like to get your systems back online with all supporting data.

Explore the Benefits of Dynamic Business Solutions

Internet eBusiness Solutions (IES) support organizations in their desire to modernize their business infrastructure. Let us help you find the right technology solutions for your company by setting up a consultation with an IES expert.

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