Business Central Cloud or On-Prem, which is better for your business? - MCS


Business Central Cloud or On-Prem, which is better for your business?


Wonderful! You have decided to adopt one of the most powerful and feature-rich ERP systems – Dynamics 365 Business Central. However, are you finding it difficult to choose between the available cloud and on-premise deployment options?

The core functionalities and benefits are identical in both; however, there are other aspects you must evaluate before deciding which deployment is a good fit for your organization.

Want to understand a little more closely what the two options entail?

Then, read on to understand the critical differences between the two and find a suitable solution for your business.



Business Central Cloud is hosted by Microsoft and offers customers a fast and hassle-free deployment experience. In addition, Microsoft will handle all infrastructure and maintenance tasks, allowing customers to focus on their business.


The deployment process for Business Central Cloud is quick and painless. However, on-prem deployment of Business Central will take longer – it requires manual installation, which can take weeks. This is because you will have to procure hardware, install and configure Business Central, and then migrate data from existing systems.

Ownership and Control


The cloud-hosted version offers several advantages, including automatic updates. Whenever Microsoft releases an update for Business Central, the cloud-hosted version will automatically download and install the update. This ensures that your Business Central installation always remains up-to-date, making it easier to take advantage of new features and capabilities.


While cloud deployment makes it a breeze to manage and install updates, and Business Central on-prem gives you the advantage of complete control over how the system is installed and optimized for your business. In addition, when Business Central is deployed on your on-premises server hardware, you have complete control and ownership over your business data—in contrast to a cloud deployment, where your data is hosted on Microsoft Azure servers.



Despite the many benefits of Business Central, security concerns remain the number one barrier to its deployment. There have been many cloud breaches, and IT departments worldwide are concerned. Business Central takes data security seriously with multiple layers of protection, including state-of-the-art encryption technology. In addition, Business Central includes several security features to address these concerns, including role-based access control, data encryption, and auditing.


While the cloud has become increasingly popular recently, many companies are hesitant to move their sensitive data off-site. Business Central on-prem provides peace of mind knowing your data is stored locally and protected from cyber threats.

Additionally, Business Central on-prem offers the flexibility to customize your environment to meet your specific business needs.

Maintenance and support


Business Central’s cloud-based deployment option provides many advantages in terms of maintenance and upkeep. Because Microsoft hosts Business Central, you don’t have to worry about managing your servers. Instead, Microsoft handles the underlying infrastructure and security, which frees your IT team to focus on other projects. In addition, Business Central includes automatic updates as part of your monthly subscription, so you’ll always have the latest features and security patches.


When you host your systems locally, the responsibility is in your hands for maintaining the systems. This will mean you have someone in your organization with IT experts who oversee the server maintenance. More costs may be involved if you hire someone with these skills to help maintain your servers. However, Business Central on-prem also offers the advantage of being able to customize your server environment to meet your specific business needs.

Read about Business Central – 7 Things to Know Before You Decide to Upgrade NAV to Business Central.

Pricing and budget

Business Central is a powerful ERP solution that can help businesses of all sizes streamline their operations. When considering whether to implement Business Central on-premise or cloud-based, the cost is likely to be the first factor on your mind. Both options have pros and cons in terms of price, so weighing up all the factors before deciding is essential.


Cloud deployments have lower upfront costs since you don’t need to invest in hardware or infrastructure. In addition, Business Central in the cloud includes automatic updates and upgrades, so you don’t need to worry about maintaining your system. As a result, cloud deployments are relatively more cost-effective since you only pay for the resources you use.


Business Central on-premise is typically more expensive to set up and maintain than a cloud-based system, as you must purchase and host the servers. This requires a more significant upfront investment for hardware, networking, and infrastructure. In addition, you will need to factor in the cost of an IT staff or managed services provider to maintain and support your on-premise deployment.


Choosing between Business Central cloud deployment and on-premise deployment is a vital decision that should be made strategically with a lot of forethought. For example, if you need the flexibility of a cloud-based solution and don’t want to worry about hosting and maintaining your servers, Business Central Cloud can be a good choice.

On the other hand, if you have sensitive data that you don’t want to entrust to a third-party provider or need a highly customizable solution, Business Central on-premises may be a better option. Ultimately, choosing Business Central Online or Business Central on-premises boils down to preference and business needs.

If you need help deciding, talk to our Dynamics ERP experts, who have more than two decades of experience, today.

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