It automates and streamlines business processes and helps people to manage their business, including finance, sales, shipping, manufacturing, services, project management, and so on.
Dynamics 365 Business Central is available in two ‘flavours’: a cloud version and an on-premises solution. Both flavours offer a lot of the same core functionalities. But there are some critical considerations to keep in mind when deciding whether to purchase Business Central on the cloud or on-premises. To help you find the best fit for your organization, we have summarized the key differences between the two types in this article.
Business Central on the cloud:
Business Central on-premises:
Overall, your total cost of ownership is much lower with the cloud version of Business Central. In comparison, the on-premises version has a higher initial set-up cost and ongoing future expenses for maintenance.
Business Central on the cloud:
Business Central on-premises:
With the on-premises version of Business Central, you have greater control and ownership of your business data, as the software is deployed on your on-premises servers. However, this also means that you need to have sufficient IT resources in-house to install product updates and maintain your software and hardware.
Business Central on the cloud:
Business Central on-premises:
The cloud version of Business Central is suitable for businesses who need to scale up very easily and quickly. You only pay additional fees to increase the number of end-users, and you do not need to invest in additional hardware. On-premises Business Central, on the other hand, has the advantage when it comes to customization, as you can both modify the base code to make the software fit your needs or use extensions. You do need to have the appropriate in-house skilled people to make these amendments.
Business Central on the cloud:
Business Central on-premises:
The cloud-based Business Central has a considerable advantage when it comes to integrations and functionality as it is easier to extend its capabilities than the on-premises version.
Today, nearly 90% of new Dynamics 365 customers opt for an in-cloud deployment. 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.
While we recommend the cloud version of Dynamics 365 Business Central, there are situations when your company requires more control over your data or requires customization than what the cloud offers, and that is where the on-premises version would work better.
To make an informed decision on the right option for you, understanding the differences is crucial. Ultimately, choosing whether you deploy your ERP solution as on-premises or in the cloud depends on your business needs/ambition and how much you are willing to invest when implementing or upgrading your ERP system.
As Dynamics 365 partner and Inner Circle member, we are here to help you make the right choice. Contact us for further assistance.
Results-oriented marketing executive with a diverse background in driving marketing initiatives for technology companies. I have developed a comprehensive skill set in marketing strategy, brand management, lead generation, and digital marketing. My experience includes managing cross-functional teams, optimizing (online) customer experiences, and building strong brand identities.
Microsoft Dynamics 365 Business Central is an integrated business management solution for small and medium-sized businesses. It automates and simplifies processes that involve finance, sales, shipping, manufacturing, services, and project management. Formerly called Dynamics NAV, it’s part of the Microsoft Dynamics 365 family and integrates easily with other Microsoft products such as Office 365 and Power BI. Business Central exists in two versions – cloud-based and on-premises. It’s flexible, personalized, and grows with your business as you expand.
The cloud version is hosted on Microsoft Azure using a subscription-based model. You receive automatic updates, built-in security compliance, and no hardware maintenance concerns. The on-premises version runs on your own servers, which means you have full control over data and can customize it in more ways, but you will have to rely on your IT team to manage updates, backups, and security. Cloud is quicker to implement and easier to scale, whereas on-premises is ideal for organizations that require a lot of code-level customization or strict data residency needs. Today, close to 90% of new customers go for cloud.
Cloud deployment has obvious pros for today’s businesses. Implementation is faster because there is no hardware to buy and install. Microsoft takes care of security, compliance certifications, and updates automatically on a weekly basis. Scaling is easy – just add users without investing in more infrastructure. You also get seamless integration with Power Platform, Power BI, and Microsoft AppSource extensions. The subscription model implies predictable monthly cost with no surprise license renewal expenses. For most organizations, cloud means flexibility, reduced overhead, and easier access to new features.
On-premises makes sense in certain circumstances. If your organization requires extensive customization of the code at a deep level beyond what’s possible through extensions, on-premises provides you that freedom. Companies with stringent data sovereignty requirements or regulatory requirements may want to keep the data on local servers. Businesses that are in remote locations and have unreliable internet connectivity may also benefit from it. However, you’ll need skilled IT resources to manage servers, install updates, maintain backups, and ensure security compliance. Weigh these operational demands against the control you gain before deciding.
Business Central uses a subscription-based pricing model with monthly or annual payment options. Microsoft offers two primary licenses: Essentials includes basic functionality such as finance, sales, and operations; and Premium adds service management and manufacturing services. Pricing is based on the number of users and type of license chosen. Cloud subscriptions come with hosting, updates, and security included. On-premises involves separate licensing as well as infrastructure investment. For accurate pricing tailored to your organization’s needs and user count, contact us for a personalized quote.
Implementation timelines differ according to the complexity of your project. A simple implementation for a small business with standard requirements could take a couple of weeks. Mid-sized organizations with multiple modules, data migration needs, and integrations often need several months. Large enterprises or multi-national rollouts take longer due to localization, regulatory requirements, and change management efforts. Cloud implementations are usually faster because there’s no hardware set up involved. We offer a phased approach that includes assessment, design, configuration, testing, and deployment for seamless transitions.
Our implementation services cover your entire journey from planning to post-launch support! We begin with business analysis to understand your processes and goals. Our certified consultants manage the solution design, system configuration, and customization to fit your workflows. We handle secure data migration from legacy systems and develop integrations with your existing applications. We carry out user acceptance testing to make sure everything works fine before go-live. We offer thorough training (workshops and documentation). After deployment, we provide continuous technical support, performance monitoring and optimization services.
Absolutely. As a member of the Microsoft Inner Circle and a trusted Dynamics 365 partner, we have a track record of successfully implementing Business Central for industries and organizations worldwide. Whether you are a small business that needs a unified ERP or a growing company that is migrating from legacy systems, we customize our approach to your specific requirements. Our team handles everything from assessment and configuration to data migration, integrations, training, and ongoing support. We also specialize in multi-country and multi-entity deployments. Contact us to see how we can help transform your business operations.
Cloud Business Central includes built-in enterprise-grade security. Microsoft handles data encryption, threat protection, and compliance with ISO certifications and industry standards – all at no additional cost. Your data is stored in secure Azure datacenters with automatic data backups and disaster recovery. With on-premises, security becomes your responsibility. Your IT team needs to implement encryption, access controls, backups, and compliance with necessary certifications. Both options can be secure, but with cloud, you get to shift that burden to Microsoft, while on-premises requires dedicated internal resources.
Yes, integration is one of Business Central’s biggest strengths, especially in the cloud version. It connects seamlessly with Microsoft 365 apps like Outlook, Excel, and Teams for everyday productivity. Power BI integration provides real-time analytics and dashboards. Power Automate enables workflow automation across applications. You can extend functionality through thousands of apps on Microsoft AppSource. The cloud version supports easier integration than on-premises, as Microsoft continuously updates connectivity features. This unified ecosystem helps your teams work efficiently without switching between disconnected tools.
Rest assured. We've got you.
Let's get in touch and tackle your business challenges together.