Business Central –cloud or on-premise?

Cloud vs. On-premise ERP: What to choose?

When implementing an ERP system, the first, and possibly most important, choice to make is whether to choose a cloud solution located in the cloud on a rented server or whether the solution must be implemented locally on your own server, also called on-premise. Both methods have their own advantages and disadvantages, which should be taken into consideration before choosing a solution. There is not one type of solution that suits all companies, it depends entirely on your business needs. You should therefore analyze the company's needs and then determine which method best suits your company's needs.

Cloud
A cloud solution is hosted on servers operated by a vendor, such as Microsoft Azure, and accessed through a device connected to the Internet.

On-premise
With on-premise, you use your own physical servers and IT infrastructure to host and operate the ERP solution.

However, there are alternative solutions when choosing ERP systems, including SaaS and Hybrid.

Hybrid
This method is a mix of both on-premise and cloud hosting. A method that is becoming increasingly popular among companies. The reason may be that a hybrid installation offers the same flexibility and easy approach as a cloud solution as well as the same level of security and customization as an on-premise installation. However, a hybrid installation requires the same level of infrastructure, maintenance and internal IT resources and competencies as a local ERP installation.

SaaS
If you want to know your ongoing operating costs in advance and not be surprised by sudden and unecpected costs, you can advantageously choose a SaaS (Software as a Service) solution, where you rent an ERP application hosted by an IT supplier, for example by Microsoft if you choose Business Central as SaaS solution. All costs in a SaaS solution is included in one single price, typically a monthly license per user, rather than having separate expenses for license and hosting.

Dynamics 365 Business Central On Premise

The on-premise version of Business Central is for those companies who, for many reasons, may need to have control over their own server, and hence their data, and / or need more customization options than the cloud version offers. As with Dynamics NAV, Business Central On-premise is extremely flexible and can be tailored exactly to the needs of your business, no matter how complex they may be. In other words, Business Central On-premise can run business processes in exactly the way that is needed and regardless of which type of business you run and in which industry. The solution has the functionality you need to streamline and optimize the operation of the company while you gain full insight into and an overview over the company's individual processes and how they affect operations in the company.

The Intelligent Edge
With a Business Central On-premise installation, you can connect to The Intelligent Edge. The term 'The Intelligent Edge' is used in many ways, but in short, The Intelligent Edge is where things actually happen, meaning the things that are connected to the Internet when talking about IoT (Internet of Things). The Intelligent Edge consists of a set of connected systems and devices that gather and analyze data close to your users, data or both.

Dynamics 365 Business Central Cloud

For smaller companies who may not have the time or resources to find the right server solution or to run it, Business Central Cloud can be the right solution. The Cloud version of Business Central is not as flexible and adaptable as the on-premise version, but you can, however, develop or buy so-called Extensions. Extensions are plugins you use to customize the solution, but without changing the basic code itself. Therefore Extensions are finished solutions, not real adjustments.

So what to choose, cloud or local (on-premise) installation?

There is no right or wrong when choosing whether your ERP solution should be installed locally on its own server or whether you should choose a solution placed in the cloud, in other words, whether you choose Business Central On-premise or Business Central Cloud, the choice depends entirely on your business needs in your company and how much you are willing to invest when implementing or upgrading to a new ERP system.

As a rule of thumb, one can say that an ERP Cloud SaaS solution is ideal for smaller and less complex companies that have limited internal IT resources. On the other hand, Business Central On premise, which is more adaptable and flexible, will be better suited to larger companies with complex business processes and specialized needs.