This blog explores and sheds light on the different deployment options available for Microsoft Dynamics 365 for Finance and Operations Enterprise Edition. This includes the trademark Cloud Option and other options including On-Premises (aka Local Business Data) and Hybrid (also referred as the cloud & edge).




Cloud solution is fully managed by Microsoft, everything is hosted by Azure in the cloud, this includes both management and operational tools as well as business data, metadata and source code etc. Azure provides flexible connectivity with other cloud services including:

  • high availability (H/A)
  • disaster recovery (D/R)
  • sandbox environments
  • application lifecycle management
  • combined with cloud-based systems of intelligence, infrastructure, computing, database services in a single offering


Additional benefits of cloud option includes:

  • Custom built platform requires shortest implementation time
  • Updates on regular basis
  • Availability of reworked industry-specific and domain-specific solutions
  • Planned multi-instance federation
  • Elastic scale out



Due to limiting factors including Connectivity Issues and Business Data Protection Act in certain regions, cloud option is not always a good fit for all Dynamics 365 existing and potential customers.

Some organizations prefer not to store business data on infrastructure not completely controlled by them. Reasons could include:

  • Industry regulations mandating full access to infrastructure and data
  • High initial one-time costs, enterprise software or hardware requirements


On-Premises Options leverages companies as Dynamics 365 for Finance and Operations software can be deployed locally with management via Lifecycle Services (LCS) in the cloud. And in addition there is no business data processing outside the customer’s or their partner’s data center unless the customer provides consent. Therefore the client is fully capable of turning on/off cloud synchronization. Furthermore the SQL Database and the application servers are also deployed on the client’s premises.

Some benefits of On-Premises deployment includes:

  • Disconnected data-center
  • Local data residency
  • Capitalize HW investments
  • Single instance only



This deployment option is ideally for companies who are going through a transitional phase of moving towards the Cloud Option but are restricted by connectivity issues. Hybrid Option runs through mix modes, combining the goodness of Cloud and at the same time providing the liberty of data storage On-Premises.


Hybrid cloud can be defined as an environment where private cloud and public cloud are linked as data and applications are being shared between them. Processing can fluctuate at run-time, Cloud and edge computing provides the capability of scaling on-premises framework up to public cloud to the extent required to handle any overflow. This enables an organization not to give their entire data to any third-party data-center.

Advantages of Cloud and Edge deployment includes:

  • Microsoft managed cloud computing
  • Customer managed edge computing
  • Multiple local compute/storage workplaces:
    • Retail, shop floor, warehouse
    • Utilize cloud for scale, MDM, data aggregation
  • Local data residency in addition to cloud

NOTE: Hybrid Option is currently only available as a developer preview version only.



Selecting amongst the available deployment options genuinely depends on the external and internal factors surrounding an organization. Key factors to be considered includes:

  • Initial investment
  • Data Protection Act and Legislation
  • Business prospect and expandability
  • Availability of technical resources
  • Employees’ ability to adopt and willingness for change management




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