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Is Microsoft Dynamics 365 cloud based?
The best answer to 'Is Microsoft Dynamics 365 cloud based?' is 'yes and no', or 'it depends'.
One of the many strong points about Microsoft Dynamics 365 is that you, the end user organisation, can choose where to host your Microsoft Dynamics 365. This is why I can say that the answer to 'is Microsoft Dynamics 365 cloud based?' is 'yes and no', or 'it depends'. You can choose between a cloud based solution or an on premise solution. There are a few options for hosting Microsoft Dynamics 365:
- Microsoft Dynamics 365 Online which is hosted in a Microsoft data centre
- Microsoft Dynamics 365, on prem, hosted in your own data centre or on your own servers
- Microsoft Dynamics 365 provided as a service by another vendor.
Unless you are using Microsoft Dynamics 365 Online, you will be using the on-premises version of the software - even if it is cloud-based with a partner.
All the three Microsoft Dynamics 365 options listed above could be considered 'cloud', although not all of them are in public data centres.
There are pros and cons to each of these options. When you buy anything as a service, you receive some service in return for a payment. When considering any software as a service, it is essential that you weigh up what you are receiving, ensure that it meets your needs and provides value for money – to you.
One of the challenges with this apparently simple question, 'Is Microsoft Dynamics 365 cloud based?' is the definition of 'cloud'. Strictly speaking, 'cloud' means simply hosted offsite, or on servers that are located outside your premises. However, this is not how the term is often used.
Cloud is usually understood to mean software that is provided as a service – SaaS (software as a service). Without doubt, SaaS, is the way the technology world is moving. However, I have heard people say things like "we need cloud-based software because we have several offices" or "we cannot use cloud software because it is insecure". Both of these are untrue. There may be some insecure cloud software examples – but there are certainly some insecure on-prem examples.
There are many blog posts saying that IT costs are lower when using cloud. However, this is an oversimplification. What is certain, is that the IT services that you require will be different – because the software as a service provides some of the services that you have to provide with on-prem software.
Microsoft Dynamics 365 Online
Microsoft Dynamics 365 Online is always hosted in a Microsoft data centre and is public cloud. This means that you have no control over how your solution is hosted. Microsoft Dynamics 365 Online is a service which is paid for and you have little say in how that service is provided. Microsoft have data centres in many locations, including Sydney and Melbourne in Australia.
Microsoft Dynamics 365 Online is now hosted on Azure, and is certified as being suitable for Australian government use by the Australian Signals Directorate (ASD).
Although now, and for the last five or so years, Microsoft has hosted Microsoft Dynamics 365 Online in Australia, this has not always been the case. When Microsoft Dynamics 365 Online was first launched, Australian customers were hosted in Singapore.
Microsoft Dynamics 365 hosted in your own data centre
If you select Microsoft Dynamics 365 hosted in your own data centre, it may be considered as 'cloud'. However, your own data centre is really an extension to your office. In this case you will be entirely responsible for the management of the solution – as you would be if you selected what I call 'truly on prem', i.e. hosting the solution on servers within your own four walls.
Microsoft Dynamics 365 provided as a service by another vendor
If you select Microsoft Dynamics 365 provided as a service by another vendor, it is probably cloud, and it may or may not be public cloud. This will depend on the specific service and supplier that you select.
How is Microsoft Dynamics 365 Online different from Microsoft Dynamics 365 on prem?
This is an interesting question. There are the two variants of Microsoft Dynamics 365 software - Microsoft Dynamics 365 Online and Microsoft Dynamics 365 on prem. These two variants are very similar, but are not identical. All of the key functionality is the same. The differences are found in areas influenced by how users are managed, and areas affected by database access.
The key differences are highlighted here:
| Microsoft Dynamics 365 Online | Microsoft Dynamics on premises | |
| User management | Done via Office 365 portal | Done via Active Directory, or whatever Directory Management services you use |
| Deactivating users | Users always have the status ‘active’ even when disabled via Office 365 portal | Can be done |
| Update process | Happens automatically about every six months | You, or your supplier control how the updates happen |
| Access to the database | Direct access is impossible | Direct access is probably possible, - but may be prevented by a provider |
| Database maintenance | Done for you as part of the service | You, or your supplier, manage database maintenance |
There are also some differences in the licencing available, but these are changing rapidly, so I am not going to give you specifics – which could be out of date very quickly.
Many people are unaware of all of the options, or only present those options that they prefer. My advice, as always, is to do your own research, and ask several people, at lest some of whom have little to gain from your decision.
I hope that this has given you not just a simple ‘yes’ or ‘no’ answer, to 'Is Microsoft Dynamics 365 cloud based?' but some understanding about why this is not as simple as it sounds.
References
Microsoft becomes the first global cloud provider to achieve Certification for Protected data in Australia 1/4/18
Digital Transformation Agency pioneers Protected cloud 22/8/18
https://news.microsoft.com/en-au/2018/08/22/digital-transformation-agency-pioneers-protected-cloud/
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Done via Active Directory, or whatever Directory Management services you use |
