What are the Cost Implications of Moving Dynamics CRM to the Cloud?

By Adam Hallbeck | December 11, 2019

Business and technology seem to move at lightning pace, which can make it difficult to discern what trends to pay attention to and which to ignore. One common topic that always comes up is cloud. While your cell phone, streaming services, and (in most cases) Office subscription are already storing and pulling files from the cloud, you may not have considered how to incorporate the cloud into your business.

Dynamics 365 Customer Engagement users who are currently accessing the system on-premises may wonder if hosting Dynamics CRM in the cloud is a better option or if they should stay on-premise.

I've lived and breathed robust, well-designed on-premises deployments in the past - and I'm sure I will in the future. However, there's an ever-increasing list of reasons to at least consider moving to the Microsoft Cloud- not least of which is cost. And when we speak of cost, it's important to recognize there are several factors to consider.

Direct Costs


On-premises licenses are a one-time purchase, but require an annual enhancement that is based on the total purchase price of your solution. Paying the annual enhancement gives you rights to new versions once they are released. If the annual enhancement lapses, you still own the version of the software you're currently on, but will not be able to upgrade your system.

Cloud licensing is a monthly subscription fee that is billed per user, per month. This user number can be added to or subtracted from on a monthly basis as needed. Subscription-based licensing can be cancelled or suspended at any time. There are no annual enhancement fees or costs associated with upgrading.

Infrastructure & Hosting

On-premises deployments require physical or virtual machines to run Dynamics 365 Customer Engagement servers, and both incur initial setup, maintenance, and update costs on a cadence. Depending on what kind of hardware you're managing, how you're hosting VMs, etc., these costs can pile up over the course of a calendar year, especially when there are system outages or downtime.

By moving CRM to the cloud, you don’t pay for hardware, servers, or the IT resources required to maintain them. Microsoft provides full security monitoring, threat management, intrusion detection, and penetration testing.

Additionally, you can scale up and down your users and system at any time. For example, we work with a variety of seasonal businesses that need more bandwidth during their busy time. These companies can pay for what they need, when they need it, leading to cost savings during their slow seasons.

Application Maintenance

All servers and applications require updates; patches, firmware, simple UI updates…there's a constant stream of both minimal and more impactful maintenance costs over the lifecycle of any given hardware or software.

Indirect Costs


You might have heard (or thought) that your data is yours, you want it where you have direct access to it, and, ultimately, it's safer in your hands. Unfortunately, that's not the case. To say Microsoft has invested heavily in enterprise cloud security wouldn't give them their proper praise; with the advent of AI-driven Intelligent security capabilities, Government and other industry-specific cloud infrastructure, and an awesome compliance offering list, your data is much safer in the hands of a company recognized as a leader in five Gartner Magic Quadrants.


System outages, performance issues, and the like are never fun. They're far less fun when you have to step away from friends or family to head into the office, get hands-on with your servers or database, and try to get your production environment back up to speed. While off-hours commitments are unavoidable in these scenarios, working through Microsoft Support for everything from general troubleshooting to full production downtime offloads the 24/7, hands-on support model and saves the headaches of in-house on-calls. What's more, there are multiple redundancies and scale group options for cloud implementations of Dynamics 365.

Features and Product Enhancements

For Dynamics 365 Customer Engagement, on-premises deployments are left catching up to online counterparts with new feature sets, enhancements, and changes. Some new features will never be included in on-premises rollups. Dynamics 365 in the cloud sees two major product release waves a year (Spring and Fall releases), and they're usually filled to the brim with new capabilities. While these wave updates are not optional, most major features included affording an opt-in component. That, and Microsoft provides robust documentation on releases.

We’ve worked with countless businesses to migrate their CRM implementation to the cloud. Overall, there has been a resounding appreciation for the cost savings, functionality, and ease that the cloud provides.

Learn more about the cost of on-premises vs. online by watching the video below.

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