Here It Is: Dynamics 365 for Operations Local Business Data (On-Premise) Option

Dynamics 365 for Operations Local Business Data On Premise

Update: Check out our recap of the Dynamics 365 tech conference and stay tuned for some new licensing information expected to be released next week!

Rumblings and rumors had been pointing to it, but it has finally been confirmed by Microsoft, a true on premise deployment of Dynamics 365 is coming. While many were rightfully wary of the potential announcement, thinking it may just be another variation of “hybrid” with a new name, it appears to be the real deal. Like other partners and users, we were cautiously optimistic on the subject.

In the official announcement Sri Srinivasan, General Manager for Microsoft Dynamics 365 for Operations in the Cloud and Enterprise Group, still stresses the need for businesses to explore the cloud and hybrid options. He does however, understand the variety of reasons for which a company needs to keep “mission critical data” local.

Which brings us to three Dynamics 365 deployment options:

Cloud (Fluffy white mass of water vapor) – Available Now

  • Microsoft manages all Production data via cloud
  • Microsoft manages Production applications and code promotions
  • Cloud-enabled intelligence and other services
  • Subscription Licensing

Cloud & Edge (aka Hybrid) – POS available, more options planned H2 CY2017

  • Mixture of Microsoft and Customer/Partner data management
  • “Transact locally, analyze in the cloud”
  • Cloud-enabled intelligence and other services
  • Subscription Licensing

Local Business Data (aka On Premise)

  • Code implementation handled by Partner and Customer, with automatic validation via LCS
  • Customer/Partner manages own data infrastructure and application servers
  • Optional cloud-enabled services for a la carte purchase
  • SA/BREP or Subscription Pricing (perpetual licenses similar to prior versions of Dynamics AX with full upgrade capabilities)

Cloud-based services worth mentioning

While services like Power BI are technologically available to those who opt for the on premise option, they will have to buy the license separately. Additionally, there are services now (Cortana Intelligence Suite, Machine Learning, Azure IoT) and future services that will require a cloud or cloud/edge deployment. While it is unlikely that Microsoft will build on premise connectors for these services that surround Dynamics 365, it is possible that partners will fill this void.


The push for cloud is still evident

As businesses deliberate their options, Microsoft will incentivize cloud options over Local Data to be both the least expensive and the most capable deployment. Especially services like disaster recovery, which businesses may not typically consider the cost of until it is needed, will be included in a cloud subscription. In the same way that data centers and infrastructure must be built up for on premise, DR will be more expensive when done locally.

For those who follow the local business data option, business data will not be copied to the Microsoft cloud and services such as embedded Power BI and Azure Machine Learning are not included. While it may not be as simple as literally just flipping a switch, it does appear that Microsoft is making it easy for a business to start out with a local business data deployment and decide to turn on cloud services in the future.  However, it is very clear that new future services surrounding your Dynamics 365 for Operations solutions will be built cloud first with no guarantees of being available for Local Data installations.

Microsoft is still betting big time on cloud services.  It is driving the Digital Transformation message and that message becomes hamstrung when assets are “bunkered” or “siloed” on-premise (aka, “Local Data Model”).  Nonetheless, Microsoft is providing options and allowing their customers to bite off what they feel comfortable chewing.

LCS In the Cloud

One component of this equation, which will definitely remain in the cloud is Lifecycle Services.  While the data and application servers can now be hosted locally, the management tools to monitor, deploy and maintain Dynamics 365 for Operations environments will stay on Azure.

Pricing, licensing, data

For users currently on prior versions of Dynamics AX, licensing will more than likely translate in a way that benefits the customer. Similar to the transition from AX 2009 to AX 2012, the expectation is that the customers will incur NO additional costs to upgrade licenses as long they stay current on maintenance.  It is looking like more details will be released next week, so stay tuned.

Dynamics AX 2009 to Dynamics 365 data upgrade became available recently.  While AX 2012 data upgrade is not yet available, it should be sometime in late spring or early summer. By design, data will be sent to LCS and converted with the help of automation tools before the partner/customer applies any additional manual fixes as needed.

For more details on the new deployment options, check out Sri’s official announcement here.

Official announcement still not enough? Some upcoming events to keep on your radar:

Are you considering Dynamics 365 for Operations as a solution for your business? Contact us to get started!

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