For those businesses or individuals who are currently considering Dynamics CRM, one of the decisions that you will ultimately need to make is regarding whether you intend to use CRM Online or CRM On-Premise. For those whose first reaction to the previous statement is “Say what?”, heres a brief breakdown of the two different options:

• CRM Online: An instance of CRM that is accessible via Office 365.
• CRM On-Premise: An installation of CRM on your own server(s).

The word on the street these days is all around cloud computing and services, and that all organisations should have most, if not all, of their infrastructure within a hybrid public/private cloud configuration. However, it could be that you are required to host your CRM within a specific location due to regulatory or contractual requirements for your business. Or that you already have existing costs allocated towards server infrastructure that must be used as part of your CRM project.  The list of potential reasons are endless, which is why CRM On-Premise exists in the first place and is still an essential requirement for many organisations.

So here’s a breakdown of some of the factors to consider, and my recommendation on the best approach to go for:

If you are already using Exchange Online with other Office 365 services, then CRM Online is the way to go

One of the potential headaches when it comes to configuring CRM for first use is around e-mail synchronisation, something which I have hinted at in a previous blog post. If you already use Exchange Online, then the setup steps involved are greatly reduced, as CRM will automatically detect your Exchange Online profile and settings if it is on the same tenant as your CRM Online instance. If not, then you’re going to have to look at other options such as the E-mail Router in order to link up your On-Premise Exchange Server, SMTP or POP3 e-mail system. These can be fiddly to setup and maintain, as you will require a dedicated machine that hosts the E-mail Router software and you may potentially have to liaise with other third party e-mail system providers in order to troubleshoot any issues.

Sometimes it’s nice having the latest new product without paying extra for it

For On-Premise CRM, you would need to factor any future upgrade plans as part of your initial cost-investment into the system. Given the increased frequency of CRM releases, this could start adding up to big bucks after the first year or two. As a On-Premise customer as well, you will also miss out on any major updates in between versions, such as Update 1 last year for CRM Online. This was quite a fundamental and significant update, in my opinion, that helped to make CRM even easier to use. With CRM Online, you are always guaranteed to get the latest updates and thereby take advantage of some of the latest and best features available within CRM. The trade off with this is that you must upgrade to the latest version of CRM eventually. You’ll be offered a date and time for the upgrade and can delay it, but you can’t stay in the past forever! This could present issues if, for example, you have written bespoke customisations that are no longer supported or deprecated. Be sure you have read and fully understand how updates work in CRM Online before making your decision.

Evaluate your internal resources first

It could be, for example, that your organisation is moving from an internal application system that uses SQL Server as the backend database system and that you have several team members who you have invested heavily on T-SQL administration/development training. The great thing about On-Premise CRM is that this skillset will not be lost, as you will need to maintain and manage your organisation(s) databases. And, if you’re really nice, you can also let them write beautifully bespoke SSRS reports directly against your databases and let them do all sorts of other fun data integration pieces using SQL Server.

The flip side of this should be obvious, but if you and your organisation don’t know your SELECT’s from your WHERE’S, then CRM Online could be the best choice as you don’t have to worry about managing and maintaining a SQL database, as Microsoft handles all of this for you. You can instead focus yours and your team’s attention and learning potentially more relevant things relating to CRM (Online) directly

Do you trust Microsoft?

Its a serious question nowadays. In the world of cloud computing, can you say with 100% certainty that the organisation(s) where you are hosting or storing some of your business’ key data and applications will a) ensure your data is kept securely and b) able to offer satisfactory guarantees in relation to service availability? Whilst (touching wood) Office 365/CRM Online outages have been few and far between, the risk is still ever omnipotent. You will therefore need to evaluate what the maximum amount of outage time is acceptable for your business and put in place procedures to ensure that your business can keep working (for example, nightly backups of your CRM Data so that you can still access your Data via a spreadsheet/database export). The benefit of having an On-Premise CRM system is that you will more than likely have control over your server machines, as well as all the data that is stored on them, and ensure your infrastructure is built to satisfy any concerns around outages or system failures.

Nice words for your Finance Team: Operational Expenditure is better than Capital Expenditure!

Deciding to go with CRM Online could significantly simplify your organisations visibility over your month-by-month costs. If done correctly, you could even make the bold claim that you have successfully eliminated all capital expenditure (i.e. upfront software costs) costs relating to CRM systems within your business. Based on experience, most finance departments are happier knowing they have to pay X amount over a 12 month period, as opposed to being hit by large and unwieldy costs in a sporadic and uncertain way. So if you want to be make BFF’s within your finance/account team, then CRM Online is the fastest and best way to achieve this.

Legacy Systems or that annoying finance system that’s 15 years old, but runs 20% of our business work and cannot be replaced

Without traditional database access that On-Premise provides, it may prove difficult integrating your CRM system with any legacy system, particularly if it’s a non-SQL database. That’s not to say that it’s not possible to find a solution using CRM Online, but you may have to expand significantly more resources setting up staging environments with your CRM Online/Legacy System, or look at writing customised code that performs the tasks that you need in order to “glue” both of the systems together.

Make sure your technical team understand the limitations of CRM Online clearly, and that their feedback is factored in as part of the decision making process

I’ve already mentioned the most obvious limitation for CRM Online in the form of not having access to the CRM SQL Database. But there are other limitations too. For example, you are unable to directly query all of the information contained within the audit data entity.  There is a very good (although outdated) article on TechNet which gives a flavour of some of the limitations within CRM Online. It is very important that as part of any scoping exercise that your technical team is fully aware of the limitations of CRM Online, so that any potential difficulties around integration or data access can be mitigated from the outset.

Conclusions - or Wot I Think

If you are a small to medium business who are already using Office 365 or planning to move across in the near future, then CRM Online is the obvious and best choice to ensure the most streamlined user experience and ease of management and setup. If, however, you are a much larger organisation or are required to operate under specific compliance or regulatory requirements in respect to your business applications/data, then these are the types of scenarios where On-Premise CRM is pretty much an absolute requirement.