Microsoft provides multiple deployment options for CRM implementation, Online and On-Premise. The main difference is that for CRM online infrastructure and application is hosted at Microsoft cloud. However, in On-Premise, it is hosted at client network. Earlier, customers were hesitant to move their data to cloud especially financial sector (banks and insurance industry) because of data sensitivity and security.
For last few years, we have seen advancement in cloud technology including security enhancements. So companies are showing interest in showing their interest in moving to cloud so that there is no headache to maintain infrastructure and infrastructure resources. By moving to cloud, we need not to worry about upgrades and supported infrastructure for new versions.
From cost perspective, you need to pay upfront software license fee for On Premise so its costly from initial cost perpective. However, for online implementation perspective, you need to pay per user license fee which is less.
Joel Lindstorm from Hitachi solutions written a good article on comparison of CRM Online vs On-Premise. So I am adding the table as it is from his blog. Thanks Joel Lindstorm for that!
|Capability ||CRM Online ||CRM On Premise |
|Exchange Synchronization ||CRM for Outlook, Email Router, or Server Synchronization (if using Exchange Online/O365) ||CRM for Outlook, Email Router, or Server Synchronization (both Online and on premise) |
|SharePoint Integration ||Server Side ||Server Side |
|Inside View (Insights) ||Included ||Additional cost |
|Social Listening ||Included ||Additional cost |
|Workflows/dialogs ||200 ||Unlimited |
|Custom Entities ||300 ||Unlimited |
|SSRS Reporting ||FetchXML, or T-SQL from a locally replicated reporting server ||FetchXML or T-SQL |
|Power BI Reporting ||Yes ||No |
|Office 365 Groups ||Yes ||No |
|Immersive Excel Online ||Yes ||No |
|Mobile Apps ||Yes ||Yes with IFD and Office 365 |
|Offline Mobile ||Yes ||No |
|CRM for Outlook ||Yes ||Yes |
|CRM Outlook App ||Yes ||No |
|OneNote Integration ||Yes ||No |
|Upgrade/Update process ||Office 365 admin approves the upgrade before it is installed, update rollups applied automatically ||Upgrades and update rollups installed my your administrator |
|Direct server access ||No ||Yes |
|Phone App ||Yes ||Yes if environment externally facing via ADFS |
|Tablet App ||Yes ||Yes if environment externally facing via ADFS |
|Storage ||Limited to the amount of CRM Online storage purchased ||Limited to the amount of storage available on your server |
|Release cycle ||Two releases per year. Spring release functionality exclusive to CRM Online, so new functionality available online first. ||Fall release released to both CRM Online and On Premises, includes the functionality released in the Spring release. |
|Migrating ||CRM Online customers can migrate On Premises at any time. SQL database provided to client at scheduled time that can be imported to an On Premises deployment. ||CRM On Premises customers can migrate to CRM Online and customization for entities can be imported; however, on premises database cannot be moved to Online data center, so a data migration is required. |
|Sandbox environments ||CRM Online provides non production environments as part of your subscription that can be used for dev/test/UAT. The number of organizations received depends on the number of users. ||Non production environments can be installed, depending on local server availability. |