Microsoft Dynamics CRM and the Private Cloud

We applaud what has to be described as a major level of commitment on the part of Microsoft to use the accumulated 30 or so years of clout to embrace, inform, and lead the multitude that is their customer base to the concept of “Cloud Computing.”  Between Azure and Office365 it would seem that they have just about all the bases covered.

Well, almost. For those of us who are on the front lines every day, providing solutions for organization of all sizes, we run into compelling reasons for alternative architectures.  I’m referring to the concept of “Private Cloud,” and being a Microsoft Dynamics CRM partner, the context of this discussion will be that product.

Deployment Models and the Power of Choice

But we should back up a couple of steps here and explain some things. With all of the press and discussion these days about the success of the Office365 family, which includes Microsoft Dynamics CRM Online, we notice that we don’t hear about the “Power of Choice” much anymore, when it comes to deployment of Microsoft Dynamics CRM, and when it comes to Microsoft Dynamics CRM Online vs. Microsoft Dynamics On-Premise.  The intention of this next section is to explain fully the various choices of deploying Microsoft Dynamics CRM:

Microsoft Dynamics CRM Online – this is the cloud-based version, hosted by Microsoft, and if you didn’t dig a little, you might walk away thinking this is the ONLY version out there.  But it’s not.  This version, incidentally, is a perfectly fine, and perhaps even the best choice for a certain set of needs:

• Data stored in a secure cloud hosted by Microsoft.
• The latest and greatest in terms of updates and new functionality.
• No requirements for complex home-grown solutions built on top of CRM, or tricky integrations with other systems.
• A company that needs 5 or more CRM users. (Five users at $65/month, at the time of this writing, is the minimum monthly investment, unless you have Office365 E3+, then it’s $50/user.)

It’s no wonder why this (relatively speaking) “turn-key solution” is wildly popular with most of the companies who require little in terms of complexity and who have just the right number of users.

Microsoft Dynamics CRM On-Premises – this means that your company will purchase the licenses to run Microsoft Dynamics CRM Server, plus the Client Access Licenses required for each user. This is a one-time fee, and you can optionally purchase Software Assurance to ensure that you would get the inevitable updates and new versions as they are released from Microsoft. You would also need to supply the hardware to run the CRM Server software, one way or another, though a lease option, or through outright purchase. You would also need to install the software, and also install software ancillary and supporting software if you don’t already have it, such as SQL Server, Windows Server, etc.

Needless to say, this could potentially be a daunting task, and it can be expensive (you must get official pricing from a “Large Account Reseller”, but roughly figure about $7,500 or more for the server license plus about $1,500 or more for each client (CRM User) license, plus somewhat less expensive licenses for SQL Server, etc.  And finally the hardware to make it run.  Figure about $15,000 in hardware costs for a relatively small company that has to buy all hardware. So as you can see this only really makes sense if at least most of the following is true about your company:

• You like to “own” software – that is, you are adverse to “leasing” or paying indefinitely on a per-user basis.
• Your company has the budget.
• Your company either has the knowledge or doesn’t mind hiring the knowledge to install and configure the initial deployment.
• You are committed to the software, such that you will receive the full ROI over time.
• You have special needs, such as the ability to directly access the SQL database.
• You need to deploy code that is not “sandboxed.” (This is because Microsoft Dynamics CRM Online only supports plugins that run in “Sandbox” mode, which prevents certain types of programmatic calls to the API.)

Trust us, there are many, many On-Premises instances of Microsoft Dynamics CRM out there – it’s just that because of the barriers to entry, we tend to see this for larger organizations. This is especially true because of the unique method of deployment shown below.

The Sweet Spot – Private Cloud, Dedicated Hosting

Microsoft Dynamics CRM Private Cloud Hosting – this is a rather interesting deployment model in that it allows for all of the benefits of the On-Premise model, such as:

• Direct SQL Access and control over the CRM SQL Database
• Full administrative management (RDP Access) of the Windows CRM application server
• Complete control over the ability to run code in Sandbox mode or not.

The reason for this is that at a technical level, this is an On-Premises deployment.

And yet – and here is the very interesting part – there are none of the On-Premise costs for server software or hardware! In fact, this licensing model, if provided by a certain type of Microsoft Partner, can in some cases match the $65/user/month that CRM Online provides.

How is this possible?  Because of a relatively little-known Microsoft type of Partnership called “Service Provider Licensing Agreement.”  This allows companies like ours to offer monthly licensing on on-premise deployments of software like Microsoft Dynamics CRM, SQL Server, etc.

The level of this type of service depends largely on the attitude of the service provider.  In our case, we take a very customized and service-oriented approach.  Every one of our Private Cloud customers are special, and we treat them that way. Thus, we are able to assist companies with just a few users who have interesting needs, as well as large enterprise companies that would rather farm out the server and application management because they have enough going on already. And of course, the large number of companies that lie between those extremes. Wherever you go next, please take the time to investigate thoroughly plans like the ones we offer, so you have a full picture of what is available.

The key to determining whether you are one of those companies that requires this level of service is to ask yourself some of the questions represented by those bullet points above, and then educate yourself as to what is available by reading articles like this one, and visiting sites like ours.