How Do The Features of Microsoft Dynamics 365 in the Cloud Compare to On-Premise?

Enterprises across the globe are gradually moving their business applications to various online platforms. But these enterprises are, however, debating which deployment option (in-cloud, on-premise, or as-hybrid) they should pick because each business-case is different and will have different needs. There are various aspects, including data security, system integrations, and access to critical information, that businesses need to consider before deciding which deployment method they should choose for their business tools.


Microsoft Dynamics 365 ensures businesses flexibility by offering these deployment options:

  • In-Cloud – hosted by Microsoft
  • On-Premise – installed on private servers
  • As-Hybrid – essentially combining the features from both

We are here to help and encourage businesses to explore and understand which Microsoft Dynamics 365 installation will be best for their business processes.

Dynamics 365 In-Cloud

Microsoft Dynamics 365 in-cloud deployment ensures numerous capabilities for modern businesses, including information security and flexibility – to increase the users count or to integrate more applications at any time.

Key Features:

  • Quick and seamless implementation without incurring additional hardware expense or hiring in house IT resources
  • Minimizes spending required to maintain a dedicated private server
  • Facilitates consistent product developments along with weekly updates
  • Releases new features twice a year
  • No new license costs and no recurring license renewal expenses with a predictable monthly subscription
  • Five-layer information security and data protection
  • Efficiently works on the Microsoft Office 365 platform through a smart integration of SharePoint, Skype Messaging, and many more
  • Embedded Artificial Intelligence (AI) capabilities


  • Access your data from anywhere
  • Microsoft is responsible for maintaining infrastructure and providing updates


  • Don’t physically own the software
  • Implement IoT, PowerApps, and Machine Learning
  • Expand your operations globally


Dynamics 365 On-Premise

On-Premise Microsoft Dynamics 365 is essentially deployed on private servers, ensuring absolute control and management of huge amounts of information stored on the internal databases.

Key Features:

  • Retain full ownership of business information
  • Additional investments to be made in existing hardware and IT infrastructure
  • Works seamlessly even with basic internet connection
  • Efficiently manage and control the updates related to applications
  • Ensures flexibility to employ internal IT professionals or outsource external support to manage applications
  • Control and minimize cloud storage expenses
  • Generate business focused intelligent reports, including SQL Server Reporting Services


  • Own the software
  • Servers on site, increasing security


  • Update and maintain infrastructure manually
  • Limited access to data when off-site
  • Limited integration capabilities
  • May limit growth capabilities


As I said before, MCA Connect is here to help guide you with making the right choice for your business. Many companies may know the feature differences but still are not confident in which deployment option to go with. If that’s the case with you, contact us. One of our Dynamics 365 experts will be happy to talk through your business processes and what makes the most sense for you.

Author: Andrew Martin, Director, Managed Services