There are 3 deployment models for Microsoft CRM; On Premise, Online and Partner Hosted. There are both usability and cost differences with each model, this article summarizes each model and points out some key differences in the models. With Microsoft you have the flexibility to switch models easily as your needs and requirements change. Whether you need to expand or leverage the application for different areas of your business, or if you simply need to scale the solution as you grow your business, Microsoft Dynamics CRM will be able to accommodate your evolving needs.
On Premise – This is the traditional way software was implemented in businesses. Licensing is purchased along with any necessary infrastructure. And installed at the customers office (or a co-location data center). Purchase is made upfront (or on a lease) so it is a capital expenditure. There are potential tax advantages to this model as you can depreciate this investment. In this model you own the hardware and software and fully control the data. Ongoing expenses would be for Software Assurance (maintenance from Microsoft) and maintenance for the hardware that Microsoft CRM runs on. Additional soft costs would be for internal IT resources to manage the infrastructure (including making sure it is backed up on a regular basis). For Microsoft CRM On Premise you would typically need two servers (for a small deployment) and SQL Server and client licensing.
The On Premise model gives you the most flexibility with things like deeper level reporting/analysis, data integrations and customization of the application.
Microsoft CRM Online – A cloud based pay per user/month subscription model. The benefits to this model are low startup costs (the current pricing is $44 per user/month), no infrastructure costs (servers, SQL etc.) and the ability to scale easily as Microsoft handles the hardware infrastructure and maintenance. The downside is that you do not have unfettered direct access to the SQL database so deeper levels of reporting and customization are more difficult and sometimes not possible. You also cannot store custom code on Microsoft’s CRM servers so if you will have custom code related to Microsoft CRM it will need to be hosted elsewhere. Finally there are limits to data storage (5 GB per company, NOT per user). Additional storage is available for an extra monthly fee.
Partner Hosted – A hybrid model offering the On Premise licensing but available on a pay per user/month basis. It is hosted on servers in a data center normally by a Microsoft CRM provider (we offer a Partner Hosted model). This model gives you all the capabilities of the On Premise model with the ability to pay on a monthly basis.
3 Year Cost Comparison Based on a 25 User Implementation:
As you can see there is only a $166 per user cost difference over a 3 year period between the On Premise and Online models. In a lot of cases a customer will start out with the CRM Online model to reduce the upfront investment and choose to later migrate to On Premise as Microsoft allows you to change models as needed.
Only after a full needs analysis is performed can a formal recommendation be made on the best deployment model but we hope this article gives you some guidance. If you have any questions please Contact Us.