With the advancing technology development and the growing popularity of cloud computing, it is not surprising that enterprise management software manufacturers offer their customers access to hosting in various licensing models. Microsoft is fully up to the task and in the case of customers using an ERP system dedicated to the SME sector, such as Microsoft Dynamics 365 Business Central, it offers them options related to cloud computing. It departs from the local, so far most popular, On-Premise deployment option, gradually withdrawing Mainstream support for older versions of the system based on this model, introducing a policy of selling software only in the SaaS version. In addition, it offers other models based on cloud technology, such as IaaS or PaaS. All offered models have their strengths and weaknesses that should be considered when choosing the right one for your company.

How are these models really different?

To be able to decide what to choose from the available Microsoft Dynamics 365 Business Central implementation models, it is necessary to understand
and verification of the strengths of each of them. In understanding the overall functioning of each model, a compilation of all available options for each model can help technology.

https://stack247.files.wordpress.com/2015/05/azure-on-premises-vs-iaas-vs-paas-vs-saas.png

Such a combination may not say much. However, going one by one, let’s try to explain each option:

On-Premise Model – local software hosting, from which, as mentioned above, Microsoft is definitely and successively departing. The company’s data is physically stored on the Customer’s website using a physical server to host and operate Microsoft Dynamics 365 Business Central system. The type of On-Premise hosting is often chosen when further customizations are needed to completely adapt the system to the specifics of the company, no matter how complicated they may be. However, data security in this model can be difficult to manage, which means that data can be vulnerable to breaches. Access to data is not a strong point of this model. You can only get it from a data center where they are physically stored. All technical aspects, from applications to data, servers and the network are handled by the customer or a Microsoft Certified Partner, which often makes this option a greater investment than the others in terms of time and money.

IaaS (Infrastructure as a Service) Model – a model in which the customer uses the shared IT infrastructure, managed via the Internet. This means that elements such as the data center, firewalls, network security as well as servers and storage are available in this model and managed by Microsoft.

PaaS (Platform as a Service) Model – a model which, as in the case of IaaS, includes an infrastructure managed by Microsoft, and in this case, a development environment is offered that enables the provision of IT solutions in the form of applications based on the Microsoft Azure cloud. As PaaS hosts the data and software system within the cloud, data can be accessed on any device connected to the Internet.

SaaS (Software as a Service) Model – this is the most popular model that is available in the Cloud version of Microsoft Dynamics 365 Business Central. This is the easiest and most profitable option. By choosing this model, which is fully available on a subscription basis, the customer gains full ability to scale and develop the system together with the company. The SaaS model offers infrastructure and services available under the IaaS and PaaS models, as well as an application hosting service. There is no need to manage the network, hardware, software infrastructure and security, as these tasks are handled by Microsoft.

The cost aspect of local and cloud-based implementation is also very important here. In the case of the local model, the purchase and installation of equipment by the Customer already generates a significant initial cost, and the servers still require constant maintenance and support. With a cloud-based solution, costs can be scaled as needed and server maintenance and support costs are included in the subscription.

When comparing the above models with each other, it is worth pointing to one more statement. The previous graphic dealt with the technology related to a given model, while below is a summary that indicates licensing and what is closely related to the system.

https://totovic.com/2020/07/06/business-central-onprem-vs-azure-vs-saas/

In the case of On-Premise, the license purchased by the Customer is a lifetime license, in the case of IaaS there is a choice between a lifetime license and a subscription. Business Central SaaS offers a fully subscription model, and aspects such as custom objects, Business Central maintenance, hardware, and the Power Platform service are included in the subscription. In the case of On-Premise, all these aspects are an additional cost for the client, and in the case of IaaS, the vast majority.

To sum up, Microsoft offers various license models as part of the implementation of the Microsoft Dynamics 365 Business Central system. However, the attention is primarily focusesed on the completely cloud-based (SaaS) model, developing it the most. If you are wondering which model to choose for the implementation of the system in your company and you cannot make a decision, or you want to find out about the subscription cost, please contact us and we will certainly help you choose the right option that meets the needs of your company.