Microsoft’s launch of Microsoft Dynamics 365 is certainly great news for businesses given the wide range of functionalities that are available across multiple form factors and devices. The Dynamics 365 stack brings in some great additional capabilities for rich data visualization, advanced analytics through Big Data, Machine Learning, IOT etc., which can be leveraged and integrated into business processes powered by Microsoft cloud and Azure.
While a Cloud or Hybrid (Cloud +Edge) deployment may make sense for a number of businesses, given its numerous advantages, it might not be practically feasible for certain use cases.
In such scenarios, it is highly recommended that you consider an on-premise Dynamics 365 deployment that allows you to maintain local data residency and optimize the use of existing hardware.
When On-Premise Makes Sense
There are several reasons why businesses might choose to deploy the platform on-premise. The industry may have regulations around data storage due to certain sensitivities; for example, in the case of defense, BFSI etc. There could be country or region-specific rules and regulations.
There could be connectivity issues such as lack of a reliable Internet connectivity or a single point of failure. In certain cases, a business may choose to deploy an on-premise version in order to leverage existing infrastructure investments.
In such cases, on-premise Dynamics 365 works great because it is installed on your own servers. It gives you greater control over the management and maintenance of your database.
You have the freedom to choose when you’d like any new features and upgrades to be applied. You can also control costs better in case online data storage costs go up.
Once you get a sense of your expected workloads & transaction volumes, there are certain guidelines/recommendations from Microsoft that can be used for estimating the hardware required for on-premise deployment.
There are also some important deployment considerations before an on-premise deployment. What are the configurations to be used for development, production and sandbox? Are pre-requisites such as upgrading to Windows Server 2016 and SQL Server 2016 taken care of? Does the organization have the required skill availability & maturity levels?
In case of an upgrade from a previous version, it can either be a technical, functional or hybrid update. A technical upgrade entails moving all customizations from source to target systems, like in retail management, advanced warehouse management, and transportation. It reduces customization cost and ensures adoption of the standard system.
In a functional upgrade, you need to redefine your process, re-implement and leverage new features and capabilities. Hybrid is a path between technical and functional upgrades for core customizations unique to the business. Gaps in core customizations can be upgraded and standard or new features and functionalities can be upgraded using Hybrid.
If you’re not sure what’s the best approach for you, take a look at this Webinar to demystify your Dynamics 365/AX upgrade options: on-premise, Cloud, and Hybrid.