Dynamics CRM - Cloud versus On-Premise Deployment

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Location of Data & Data Protection

EUWith Dynamics CRM Online all data is located within EU datacentres and is held in full compliance with EU data protection rules. These custom built data centres are on a massive scale and ensure that the Dynamics CRM online service can scale to provide optimum performance for all clients. If any single data centre is affected by an outage then the service will be maintained at a completely separate location, within the EU (Ireland and the Netherlands). Microsoft Data Centre PDF

Why Trust the Cloud?

A dedicated Trust Centre web resource has been prepared by Microsoft to detail why deploying to the cloud is safe and secure. Security, reliability and data protection are key issues for most clients and as such Microsoft have made this a top priority. Clients are able to benefit from the best in class, dedicated investment in server security, without having to employ staff or third party vendors. Security is key to the success of the cloud model being successful and Microsoft have staked their reputation on it. More information is available at: Microsoft Trust Centre

Key considerations for CRM Online are:

  • Data owned by the customer
  • Each client’s data is held separately 
  • Microsoft’s commitment to transparency
  • Independent verification
  • EU Data Protection Compliant
  • Commitment to a relentless focus on security


Reliable.jpg The Dynamics CRM Online service has an excellent track record, and is likely to be as reliable, if not more reliable, than an on premise solution. This reflects that Dynamics CRM and the supporting SQL server that underpins the solution are deployed with a fully redundant architecture. To reproduce a similar architecture at a single hosting location requires consideration of:

  • Multi-server hardware cost – Live, Test, SQL Cluster Live, SQL Cluster Test
  • Multi-server setup and maintenance costs – staff costs 
  • Dynamics CRM license costs for Test & Live
  • SQL Server costs for all DB servers e.g. 2 test, 2 live

This has a significant setup and staff maintenance overhead to consider. Any outage is a top priority for Microsoft as is the public cloud affects many clients, and Microsoft reputation is at stake - engineers with specialist knowledge of all aspects of the software and hardware, will be available, and this is a benefit of the shared cloud architecture.

Internet Connectivity

From an Internet connectivity perspective we strongly recommend that any client deploying solutions to the cloud has a fall back connectivity solution e.g. 4G, standby ADSL broadband link, from a separate supplier. If the on premise CRM is hosted in a private cloud, not in the same location as staff, then this same consideration will apply.

Backup of Data


The cloud based databases are backed up and tested by Microsoft as part of the cloud service. This will be in line with industry best practice. We believe that this will compare very favourably with the limited time and resources that organisations typically have to test their backup procedures on a regular basis. From a time and cost perspective this also has major implications.

Before deploying to the cloud it is important to consider the off-line back up of key data, should the internet not be available. Some key information e.g. recent Cases and Contacts can be synchronised with Outlook and Tablet Apps to minimize the impact of any outage. Work can be completed in off-line mode and will be synchronized with the cloud when connectivity is restored. More information is available at:  


For a cloud based deployment (public or private) we recommend the Dynamics CRM Online diagnostic tools are used to check performance. This may influence the cloud versus on premise decision, or may allow additional infrastructure to be put in place to address performance e.g. improved connectivity.

Live & Test instance

With over 25 user subscriptions on CRM Online clients are entitled to a free additional test instance. For those with less than 25 user subscriptions this is an optional monthly add on for a flat fee. This allows any changes e.g. customisations or new versions to be fully tested and staff to be trained, prior to rollout to the production environment. The Office 365 administration interface also makes it simple to refresh the test environment from production with the click of a mouse.

  • Deployment of updates and upgrades can be scheduled to convenient times via the O365 Admin panel
  • Test environment can be scheduled before production, allowing time for testing and training

The Latest Version via Controlled Updates


With on premise clients are in complete control over when updates and upgrades are rolled out. In reality on premise deployments are updated on a far less frequent basis than CRM Online. This reflects that the cost and planning of deploying updates restricts the number of times it can be undertaken. With CRM Online the upgrade process is undertaken by Microsoft as part of the service. The time and cost saved can instead be refocused on ensuring that any customisations and new features have been fully tested, and staff appropriately trained with the new version. As detailed above these updates can also be deployed in a controlled manner.

We believe that this is a major advantage of the cloud model and ensures that organisations can benefit from the productivity benefits that the new features offer, as quickly as possible.

Support for Hybrid 

The Microsoft cloud offers support for hybrid based deployments. For example Active Directory can be deployed on premise and used to authenticate users for CRM Online. Alternatively SharePoint Online can be used with a CRM on premise deployment. As such organisations have a choice where elements are deployed and can utilise existing deployments / investments.

Additional Tools 

CRM Online also offers access to add on tools that are only available with the online version e.g. Social Engagement and Microsoft Dynamics Marketing. Tools such as Social Engagement are included free when over 10 user subscriptions are purchased.

Deployment Decision & Subscription Model 

Based on the above and our experience of working with different clients and deployments over the last five years, we normally recommend a cloud based deployment. We believe that the value, reliability and future proofing elements provide the best possible Return On Investment for clients. We have seen the move to cloud accelerating and only see this trend continuing, resulting in the vast majority of server base software deployments being based on this model in a few years’ time. This is also in line with all of the major software vendor strategies and their investment in cloud technologies.

About the Author

James CTwo is our blogging alter ego for the Dynamics CRM and Web experts here at C2. We have a passion for anything CRM, Web Design or Social Media. We love writing about it! Find us on YouTube & Twitter.

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