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Microsoft Dynamics ERP: On-Premise or In The Cloud?

Microsoft Dynamics ERP: On-Premise or In The Cloud?

Microsoft Dynamics ERP: On-Premise or In The Cloud?

There is no doubt the ERP world is at a turning point because of the difference in cloud and on-premise ERP installations; this blog, "Microsoft ERP: On-Premise or In The Cloud," explains the difference between Microsoft's on premise software, the cloud solution, and how Dynamics 365 relates to Dynamics 365 for Operations. 

While there is convenience and flexibility that comes with cloud-based enterprise resource planning (ERP) technology, the technology requires applications or apps to deliver the customizations or enhancements written by customer developers or Value Added Resellers (VAR).  Let me try to explain further, if your business needed customizations, the code could be changed in AX by your VAR.  Dynamics 365 on the other hand is encapsulated, and any desired changes are made through apps. Even though the cloud platform bounds with connectivity given by Microsoft Dynamics 365 common data model, doubters continue to worry about the vulnerabilities inherent in Cloud and the Internet of Things (IoT). Like discussed briefly earlier, on-premise ERP platforms on the other hand, offer a higher ability to customize specific features tailored to your business.

Microsoft's On-Premise Solution

Dynamics AX On-Premise, once referred to as AX 2012 R3, may seem outdated by the name alone, but it is current with cumulative update 12 released on 11/21/2016.   Basically the solution may be named badly, but it has many of the same features, and functionality of Dynamics 365 for Operations.  The difference is the software is on-premise and does not have the HTML 5 codebase.  

Compared to other ERP competitors, Dynamics AX reduces the average implementation time to around 10 months, lowers the cost of implementation while decreasing risk, all the while giving higher customization abilities allowing for company wide satisfaction and user-satisfaction. Because of the customization and scalable configure-abilty of AX, the solution is a better fit for manufacturers. Dynamics ERP gives manufacturing:

  • Financial Management
  • Business Intelligence and Reporting
  • Inventory Management
  • Warehouse Management
  • Supply Chain Management
  • Trade and Logistics
  • Product Builder (Configuration)
  • Product Lifecycle Management
  • Manufacturing Solutions (Discrete & Process)
  • Master Planning
  • Shop Floor Control
  • Service Management
  • Project Accounting & Management
  • HR Management
  • Payroll
  • Workspace Collaboration
  • Configuration and Development (Full Source Code)
  • Enterprise Portal

Yes, other ERP solutions offer enterprise integration but none of them have the one unifying experience of Dynamics AX On-Premise. Dynamics AX is composed of many modules, which can be thought of as functional compartments. These modules work together to make running a business easier.

Microsoft's Cloud ERP: Dynamics 365

Microsoft Dynamics 365 is evolving into a total business software package allowing Microsoft's current CRM and ERP cloud solutions to be deployed in one cloud service with new role based subscriptions with purpose-built apps to help manage specific business functions like field service, customer service, and project service automation. Using the common data model, Dynamics 365 includes analytics from Cortana Intelligence and Power BI, and the productivity power of Office 365.

The Dynamics 365 apps are designed so they can be easily and independently deployed. Your business can start with the apps you need, and as your business demands, you can adopt additional capabilities with ease as all the apps work together.

The Business Edition plan: 

  • Optimized for 10-250 Employees
  • Comprises Project ‘Madeira’ & Future Sales & Marketing Solutions
  • Cloud Only
  • Max 300 seats
  • Sales
  • Field Service
  • Customer Service
  • Project Service Automation

Dynamics 365 Enterprise Plan 1 includes CRM and these Apps:

  • Optimized for 250+ Employees
  • Microsoft Dynamics CRM and light ERP
  • Min 20 seats on select offers 
  • Powerapps that use the Microsoft common data model 
  • Flow 
  • Sales
  • Field Service
  • Customer Service
  • Project Service Automation

Plan one does not include operations (aka AX 7), whereas Dynamics 365 plan 2 includes plan 1 and operations or AX(7).

Dynamics 365 plan 2

  • Includes everything in plan 1
  • Dynamics AX (7) which has been renamed to Dynamics 365 for Operations
  • Adobe Marketing Cloud  

The differences between Dynamics 365 for Operations versus Dynamics 365

The difference between Dynamics 365 for Operations (or Dynamics AX7) versus Dynamics 365 Enterprise Edition is that your company can purchase plans and not just a hybrid platform application. Your business can mix and match plans and apps.  Each user may be licensed for the functionality they need via a plan, an App, or team member pricing level.

The plans for Dynamics 365 are offered in two ways: Right now its referred to as plan 1 & plan 2.

Dynamics AX7 versus Dynamics 365 Enterprise Edition

How to get Dynamics 365 for Operations otherwise known as Dynamics AX 7?

The new release of Dynamics AX (7), now called Dynamics for Operations, can be purchased as a standalone product for over 20 users in the public cloud; it will be offered in a hybrid cloud environment sometime in 2017. The New Dynamics in the cloud is a game changer for ERP in that it can be used anytime, anywhere, on any device and it includes development space.  The On-Premise Version while not available on any device, can be adapted for mobility, and helps your company control your: data, data residency, and data isolation. Either way Dynamics 365 for Operations should be on your ERP shortlist. 


At Clients First Business Solutions, we are a Microsoft Gold Partner with a team of tenured specialists with core competencies in the implementation and support of Microsoft Dynamics.  In fact we have over 180 years combined experience in Microsoft Dynamics ERP solutions.  Not bad for a lean team. To explore all the capabilities of Dynamics AX and/or 365 for Operations and find out how this business solution can help your manufacturing or MRO organization achieve its full potential, contact our sales team at 800.331.8382 or email  Our Clients First Texas and Minnesota offices offer Dynamics AX ERP to the medium to large manufacturer and MRO across the United States and in 11 countries and counting. Call us today to see how Microsoft Dynamics can transform your business.

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