Dynamics 365 vs. Dynamics On-Premises: Cost Comparison

For companies looking to manage workload effectively, both on-premise solutions and the cloud seem like the optimal solution. Over the past few years, organizations have been moving towards the cloud to run even mission-critical applications.

The cloud has come a long way since its debut, offering tighter security, more flexibility, and cost-effective pricing models. On the other hand, the on-premise model might be ideal for companies who still need complete control over their data and may be dealing with strict privacy laws. For a comparison of each pricing model, keep reading.

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Understanding On-Premises Pricing

If you were looking for an on-premise solution, you would be spending on a fixed fee depending on the number of users. That amount, according to your business requirements, can be costly, and you may have to pay an enhanced fee per year to get the software running properly. You also have to manage server maintenance.

For example, the Microsoft Dynamics CRM Server 2016 costs around $6,874—at the time of publication, Dynamics CRM 2016 is the latest version. Then, the CRM Professional User CAL 2016 costs around $1,562. If you wanted a Basic User CAL, it would cost around $543. In addition, a Microsoft Dynamics Professional Device CAL 2016 costs around $1,099.  Then, a Microsoft Dynamics CRM Professional use additive User CAL would cost $1,019.

A User CAL defines which devices an individual can use to access Dynamics. On the other hand, a Device CAL offers access through a designated device without the need for a User CAL. Here are the different levels of access:

• Professional–Full capabilities
• Basic–Access to basic reporting tools
• Essential–Some access to custom applications
• Employee Self-Service–Offers access to all employees

The advantages of integrating CRM and ERP

Again, we are talking about traditional on-premise solutions versus the dual option that Dynamics 365 has to offer. With a cloud deployment, you can implement Dynamics 365 almost immediately. In contrast, an on-premise deployment might take longer depending on the level of customization you require and ensuring all your current systems can work together seamlessly.

Still, integrating both CRM and ERP can give all company departments a comprehensive view of the entire customer lifecycle from the start as a lead, all the way through purchasing, shipments, and invoicing. Combining both CRM and ERP capabilities also offers powerful and accurate insights to every employee with access.

For instance, a customer might ask a sales rep about a certain product. Since the ERP system is integrated with the CRM system, the sales rep can find out instantly about inventory levels and the customer’s purchase history to provide a more relevant and personalized experience.

Learn more on how to manage your business with Dynamics 365

Dynamics 365 pricing

With Dynamics 365, you can choose from multiple options. The customizations and easy integration on offer is something businesses love. Add to it the fact that you could host your data on-premise, which means that security for mission-critical applications wouldn’t be a problem.

Having ERP and CRM capabilities means that you can better manage specific business processes, and experience seamless connectivity, through a single cloud-based product.  We go through the plans with you below.

• Customer Engagement Plan–starts at $115/user/month. Includes applications for sales, customer service, project service automation, field service, marketing, and Microsoft social engagement.
• Unified Operations Plan–starts at $190/user/month. Includes applications for finance and operations, retail, talent, and PowerApps.
• Dynamics 365 Plan–starts at $210/user/month. Includes applications for finance and operations, retail, talent, sales, customer, project service automation, field service, marketing, Microsoft social engagement, and PowerApps. This would be the most comprehensive Dynamics 365 package.

On the other hand, you can purchase specific modules–based on your needs. For instance, the Customer Service application starts at $95/user/month. If you wanted the Talent application, that starts at $40/user/month. Essentially, applications range from $40 to $170 user/month. Here is a list of the applications:

• Dynamics 365 for Sales
• Dynamics 365 for Marketing
• Dynamics 365 for Customer Service
• Dynamics 365 for Field Service
• Dynamics 365 for Project Service Automation
• Dynamics 365 for Finance and Operations
• Dynamics 365 for Retail
• Dynamics 365 for Talent

Each application has a unique set of features. Since every business is different, you can customize your Dynamics 365 package with a mix of applications to meet your specific business needs. On the other hand, you can select one of the bundled plans.

For the purpose of further exploration, let’s take a look at Microsoft Dynamics 365 for Sales. With this version, you get features such as:

• Sales group management
• Invoice management
• Quotes and orders management
• Price lists and products management
• Opportunity management

All pricing is current at the time of publication.

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Dynamics 365 for Sales Professional

Starting at $65/user/month, you get these features from Dynamics 365 for Sales Professional:

• Products and price lists
• Opportunity management
• Unlimited number of users
• Sales campaigns
• Marketing lists
• Quotes and invoices
• Orders
• Advanced analytics with Power BI license

Now, you can truly improve your sales productivity.

Dynamics 365 Business Central

If you want to improve your accounting capabilities, then you might consider Dynamics 365 Business Central. Yet, while Dynamics 365 Business Central does connect all your financials from inventory, to sales, and purchasing–it also gives a complete, end-to-end view of your business.

In fact, you can view and chart real-time financial performance with Power BI dashboards. Plus, it can streamline both payables and receivables. For the Essentials version, pricing starts at $70/user/month. If you prefer the Premium version, pricing starts at $100/user/month.

Here are several other benefits:

1. Ideal for your operational needs

It doesn’t matter whether you are looking to manage your powerful inventory more effectively, or looking to manage transportation or warehousing, Dynamics 365 for Operations can do it all.

2. Manage sales easily

Get insights into leads, making it easier to build customer relationships. With a user-friendly interface, including a dashboard that tells it all in a single glance, work productivity is easily improved. You can also track employee progress and performance with just a few clicks.

3. Enhance your customer service

Offers an integrated solution so that customer service representatives can look at customer requests across different channels, instantly.  It also offers them an easy-to-access knowledge base, so that they can answer customer queries more effectively.

4. Improves field service

Understand your workforce capability, and organize work schedules accordingly, aiding in optimum resource allocation. In fact, you can ensure that the right people have access to the right tools. With real-time information, it’s easier to monitor job progress, even remotely.

5. Automates much of your workload

You can automate most of your process, to weed out human errors, whether it be planning, scheduling, marketing, or even exploring different collaboration capabilities. As a result, your employees can focus on their core job responsibilities

6. Work from anywhere with PowerApps

You could work with your system from your smartphone. Create, modify, and record data as needed—from anywhere.

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Final thought

Making the decision between on-premise or the cloud truly depends on your current business needs and future objectives. An increasing number of organizations are moving to the cloud. Yet, there is still an argument for an on-premise solution if you need full control of your data.