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The Microsoft Dynamics 365 Business Central software is a business solution that after its latest updates is presented in two versions: On-premise and Cloud.

Which one to choose is the most recurrent doubt of those who want to make the most of the benefits of this business management software that allows you to integrate and coordinate the various areas (finance, purchasing, sales, shipping, administration, production, among others) in the same space, giving life to your organisation.

Both versions have different features, and the choice you make will depend largely on how well they meet your company’s needs. Let’s take a closer look at the differences between each of them!

Microsoft Business Central on-premise

This is the conventional licensing version where you buy the software and then install and run it as a local application on your company’s servers and computers.

Microsoft Business Central Cloud

The cloud version of Microsoft Business Central is hosted on Microsoft’s own cloud server and is accessed via a web browser. In this sense, users must pay for their licence on a monthly basis, according to the functionalities used and the growth needs of the company.

Main differences between on-premise and cloud

Now, let’s look at the most important differences between the two versions:


In the “on-premise” version you have to consider the installation and hosting costs, as you will probably need to have the appropriate hardware and resources within your company for the system to work. This includes servers, computers, power and optimal space, as well as the purchase of the licence.

In addition, it is important to bear in mind the costs for technical support, development and upgrade services that you may require.

On the other hand, to get started with Microsoft Dynamics 365 Business Central Cloud you only have to pay the monthly subscription, as the hosting is paid for by Microsoft. Likewise, you don’t have to worry about software configuration, as this version comes pre-configured and updates and maintenance are done automatically, saving you time and money.


Remote or mobile access with the on-premise version is complicated. In order to do so, you will need to implement additional configurations that allow you to review your server data remotely.

Whereas if you opt for “Cloud” you will be able to access your user account from anywhere 24/7. In addition, Microsoft provides apps to facilitate access from your smartphone and tablet. Accessibility is therefore one of the great advantages of this version.

Customisation and scalability

In terms of customisation, the on-premise version is much more flexible, as it allows you to configure the software to suit your company. In this case, it should be borne in mind that the greater the number of customisations, the more work it will take to migrate to the Cloud or to new versions as they are developed.

While with the “Cloud” option you will have to adapt to the preconfigurations of the tool, with the possibility of being able to extend the functionalities according to the scalability needs of your company, thanks to various apps that Microsoft has enabled in its App-Source that serve as extensions or specific add-ons.


Microsoft Business Central is an ERP in which you will store information of vital importance to your company, therefore, it is natural that security is one of the most worrying variables.

In this sense, the “Cloud” version is hosted in Microsoft Azure, a cloud server that since its creation has been characterised for being secure and reliable, so much so that even the main ERP competitors are hosted there.

So, if you choose Microsoft Business Cloud, security is another factor you don’t have to worry about.

In the case of the on-premise version, security is your own responsibility.

The parameters for the protection of your data will be managed and will depend on the work of the system engineer you hire or your company’s technical support department.

Hybrid option: Dynamics 365 Business Central on-premise with Cloud access

Microsoft gives those working with the “On-premise” version the opportunity to access, with the purchase of Cloud licences, remote accessibility and artificial intelligence options.

This means that when you run the program on your company’s servers, you will also be able to see the information partially or completely replicated in the cloud. It all depends on the degree of customisation you have applied “on-premise”, and you can even visualise the percentage of replication.

Microsoft has set out to make business management as easy as possible with the “Cloud” version of its ERP. From our perspective this hybrid option is a way to pave the way for those users who do not yet fully rely on cloud-based information storage.

What do you think? Do you know yet which one suits your company?

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