Microsoft Dynamics 365 Business Central is a leading end-to-end solution to manage all business processes. Business Central enables businesses to streamline their operations across sales, marketing, supply chain, finance, customer service, manufacturing, operations, and more. It can be deployed as an on-premise version or a cloud-based version. However, end users are often not sure which version is more suitable and beneficial for them.
Let us look at a comprehensive set of factors that will help you decide whether you should opt for a cloud-based or an on-premise version for your business.
1. License Cost
Business Central’s on-premise version requires businesses to pay for perpetual licenses as a one-time fee upfront.
For the on-cloud version, businesses can pay a monthly or an annual subscription fee for the licenses they purchase per the number of users within the company.
2. Setup and Maintenance Cost
The cloud-based version is hosted on the Microsoft Azure cloud. Microsoft’s team handles the security and maintenance of the solution. It is hassle-free and quick to deploy the cloud-based Business Central solution. A business need not invest in hardware infrastructure like servers or on any additional software for installation. Also, it is easily scalable as the company can purchase more licenses for more resources or users they need and can start using it almost instantly.
For the on-premise model, a business will incur higher infrastructure-related costs for buying servers, storage, additional backup storage, etc. All this can be time-consuming and requires heavy investment upfront by the company. The company will have to change the existing setup and make more infrastructure-related investments to scale it. The money and the time to ramp up the on-premise version are significantly more than the on-cloud version.
3. IT Team
For an on-premise version, the in-house IT team is accountable for the setup, update, maintenance, security, and support. The business may need a larger IT team with diverse skill sets to do so. They spend most of their time ensuring that the systems are up and running.
On the other hand, Microsoft’s team will be in charge of most aspects of updates, maintenance, security, and support for the cloud-based solution. A business can manage its responsibilities with the help of a lean and small IT team. Also, they get additional time from daily tasks and focus on solving business-critical challenges, thus boosting their productivity.
4. Data Storage
The data of an on-premise version is stored on the company’s internal servers giving them complete access to the data. If you are a business operating in a highly regulated industry requiring control and ownership of data, an on-premise solution is best suited for you. As mentioned above, an internal IT team plays a major role in managing data security and disaster recovery.
The core data for a cloud-based solution is stored on Microsoft Azure cloud servers. A business can access it through APIs. However, as a company, you do not have end-to-end data ownership. They have a team of experts to look after security, backup, disaster recovery, and software upgrades. Microsoft updates the solution twice a year and guarantees a 99.9% uptime.
5. Customization
The on-cloud version is customizable only through the available extensions.
The on-premise version is more customizable as it supports both the extensions as well as object changes. The internal team will have to test them to ensure their proper functioning.
6. Integration Capabilities
One can extend the capabilities of the on-cloud Business Central version by integrating it with numerous popular third-party applications available on the AppSource. It comes with a fully integrated Power BI. Free Power BI licenses are also available in the cloud-based version. It offers easy and seamless integration with other Microsoft products, including Microsoft teams.
The on-premise version cannot be integrated with the AppSource and Microsoft Teams. You will need a data gateway to integrate the on-premise version with other Microsoft products.
The Final Draft
The above factors should help you reach an informed decision.
If you are a small business or a mid-sized company with limited resources and budget and do not mind storing your data on external secure cloud servers, the Microsoft Dynamics 365 Business Central on-cloud version is apt for you.
However, if you are a large company with a significant IT budget, need complete data access and control, or want a highly customized solution to meet your specific requirements, you should opt for the Microsoft Dynamics 365 Business Central on-premise version.
Additionally, if you need more assistance, connect with our team, they will be pleased to help you with your queries and schedule a customized demo, if need be, as per your requirements. Direction Software is a Microsoft Gold Partner for Enterprise Resource Planning. We are a multicultural Information Technology Solutions and Business consulting company with Indo-German Management, headquartered in Mumbai, India.
Direction offer Bespoke solutions on .Net, Java & open-source platforms, E-Business consulting, Back Office Support, Business Intelligence, and Mobility Solutions.
About the author:
Chirag Thakkar – Sr. Digital Marketing Consultant
At Direction Software LLP, Chirag works with the Marketing Team to enhance the Digital Marketing presence and Lead Generation.