Cloud, Hybrid, On-Premise Deployment Options for Dynamics 365 For Operations, Your business application, Your choice, You control !!

Microsoft Dynamics 365 For Operations is a modern HTML 5,  cloud based, intelligent, true SaaS ERP application built and run in the Microsoft Cloud, accessible anytime anywhere in any device, enables customers to run their end to end business operations. Since it’s launch as New Dynamics AX (AX 7) back in February 2016 till the most recent release back in November 2016, it has seen tremendous success and customer adoption, where more and more customers are willing to move their business operations management into the cloud.

With all the positive buzz around cloud, there has also been a lot of anxiety in the Customer, Partner and Technical community of Dynamics 365 and Dynamics AX regarding availability of a fully On-Premise or even a Hybrid deployment option. While more and more customers are realizing the benefit of moving their business to a fully cloud based true SaaS ERP, there some customers who are still reluctant and are not sure how their cloud ERP journey will look like, while some other customers are limited and controlled by regulatory requirements, enterprise standards, regulatory data security and privacy requirements, geographical constraints etc., and they do not feel comfortable running their operations on a public cloud environment. Microsoft kept a close watch on these scenarios and finally listened to the crowd. Kudos to Microsoft !!!

Back in Summit 2016 held at Tampa Florida, Microsoft announced their intentions and plans of a Hybrid cloud deployment option for Dynamics 365 For Operations. The true meaning of a hybrid cloud deployment is that “Customers will be able to run their business processes and transactions in an environment that are supported by Local application services and their business data will be stored locally on either Customer’s or their partner’s data center, instead of the public cloud (Microsoft Azure), while allowing them to connect and replicate their data and environment to the Microsoft Cloud  to take full advantage of the power of Microsoft cloud for automatic updates, business intelligence, financials reporting, telemetry, artificial intelligence, Cognitive services, Customer insights, PowerApps, Flow and more such surrounding apps and services.

In Summer 2017, Microsoft plans to roll out this Hybrid cloud deployment options which will be called as “Cloud and Edge’. The business process and transactions will be allowed to run at the edges with business data getting stored locally, this will be referred as “My Workplace”. The central Cloud node (Microsoft cloud) will provide a single view of the business across distributed “My Workplaces” with the power of Microsoft cloud, utilizing it’s surrounding apps and services. With this, Customers will get the best of both the worlds, Cloud and On-premise !

This week (on 2/23/2017), Microsoft announced the next chapter is this journey, “The option of a fully On-premise Dynamics 365 For Operations environment”. What this means is, Customers will be able to run business processes and transactions in their local data centers and store business data in their own or their partner’s data center, without the replication and connection of business data into the Microsoft Cloud. Good news is, Customer can simply chose to turn ON or OFF the cloud synchronization of their business data to Microsoft Cloud.  This obviously means that Customers who chose not to replicate business data into the Microsoft Cloud will NOT be able to use the Power of Microsoft cloud such as Machine learning, telemetry, embedded BI and more. This deployment option will be called as “Local Business Data” option and will be available during Q2 of 2017

In the Local Business Data deployment scenario, The application servers and the SQL servers will run on Customer’s own data center, however, they will still need to use Lifecycle Services (LCS) in Microsoft Cloud, for managing their deployment, implementation and monitoring.

Image/table below shows the side by side comparison of the different deployment scenarios.


Image Source: Microsoft Dynamics 365 Official Blog

Stay tuned for more details on this topic at the D365 Technical Conference in Seattle next Month.

Sri Srinivasan, General Manager of Microsoft Dynamics 365 For Operations at Microsoft announced this in a blog post on 23rd Feb, where he provided additional details on licensing options and availability for these deployment options. You can refer the detail of his blog post at the URL below.



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