Deciding Between Microsoft Business Central SaaS, On-Premises, Or Hybrid Matthew Schmider Wed, 06/16/2021 - 05:36

Moving or Upgrading to Microsoft Business Central? Why You Might Choose On-Premises (or Hybrid) Over SaaS

If you’re ready to upgrade from Microsoft Dynamics NAV to Business Central—or you are looking at moving to Business Central from another ERP system—you already know you have the choice of the cloud (SaaS), on-premises, or hybrid. What is the right choice? We get that question from many of our customers and prospects—and it is a valid one. While it’s assumed (with good reason) that SaaS is the best choice, there is no single “right” answer for all organizations. In this blog post, we discuss a few key considerations to keep in mind as you prepare to make that decision. 

Definitions: SaaS, On-Premises, and Hybrid

Before discussing the considerations, it’s important to understand what these options mean:

SaaS, or Software as a Service, is another way of referring to having an application hosted in the cloud, like Microsoft Azure. SaaS refers to the way applications are delivered over the Internet. Instead of buying software and having to install and maintain it (along with the cost of doing so as well as the supporting servers and other hardware), users access it via the Internet. You do this through a host or cloud services provider, and you pay a monthly fee, typically with a subscription. The provider incurs the cost of hardware, maintenance, and upgrades to the application, hardware, database, operating system, memory, etc. SaaS applications have a multi-tenancy architecture, which is a single instance of a software application that serves multiple customers.

On-premises is the traditional method in which ERP applications are acquired and used. The customer purchases the software and is responsible for installing it or engaging with a partner to help. All costs of ownership, including the software, hardware (e.g., servers), upgrades, and maintenance are the responsibility of the customer. Typically, the manufacturer of the application offers maintenance agreements that help offset the cost of updates.

Hybrid is, as you would expect, a combination of SaaS and on-premises. In this instance, the customer typically already owns an on-premises version of an application software and does not want to replace it (due to budget or other reasons). However, the customer wants to be able to access the software via the Internet, so it is installed through a hosting provider and given a web server front end. The software can reside on the customer’s hardware as an on-premises system typically would, or it can be hosted either on a private cloud or one provided by Microsoft or another provider. With this approach, the hosting provider takes on the responsibility of maintenance, updates, etc.

Why SaaS Is Typically the Right Choice

One of the many advantages of a fully managed SaaS deployment is that it relieves your IT organization of the day-to-day maintenance of the hardware and software for your Business Central application so they can focus on the IT services that benefit your company. This includes network security and intrusion detection, system backups, updates and upgrades, and redundant system availability. 

Another advantage is that hosting providers allow you to scale your hardware requirements to meet seasonal demands, adding resources during peak times and reducing resource consumption during slow periods.

However, there are circumstances where on-premises is the logical choice. Following are four things to consider.

Consideration #1: Do You Want Complete Control Over Your ERP? 

The advantage for managing an on-premises deployment yourself is that you have full control over how the system is installed and optimized for your business.

Business Central is designed to meet the needs of many types and sizes of organizations and can be installed either on-premises or in the cloud. However, some companies may find they need increased performance for their business. For example, they may require many users, or process a large amount of data, or need additional functionality. These companies might want to consider going on-premises, where they have full control over their hardware, servers, and database for tuning purposes.

Consideration #2: Do You Need to Optimize for Your Business?

The heart of the ERP solution is making sure your system is tuned correctly—your database server is sized correctly, you have enough processing power, you have enough RAM, your disk subsystem is optimized and performing at its highest level. And you can do all that either on-premises with a physical server in your own server room or on Azure. 

However, there are potential downsides. You are responsible for having the appropriate infrastructure, whether it is hosted locally or in the cloud. This requires more upfront investment, because you are no longer leasing the hardware but are purchasing them. You will also have to purchase sufficient capacity for peak seasonal fluctuations. 

Another consideration is that you will be taking on the responsibility for backing up your data, applying service updates, ensuring network security, and addressing the need for availability in the event of system failure or service interruption. 
In other words, with great power comes great responsibility.

Consideration #3: Do You Need/Want to Have Control Over Upgrades?

Another reason to take control over your installation of Business Central is to manage the upgrade and update schedule.
For fully managed SaaS implementations, Microsoft enforces upgrades and updates on a defined schedule. Upgrades and updates require brief service interruptions, and Microsoft’s schedule may not work well for your business needs.
If you're running Business Central on-premises, you have full control over when to apply the updates.  

Consideration #4: What If You Fall Somewhere In Between?

There is an in between – and that is where the hybrid solution can be useful. 

For example, it is possible to deploy Business Central on-premises but use an Azure SQL database as a managed solution. So now, while the user is responsible for the administration of Business Central, the configuration and management of the database server is the responsibility of the hosting provider. 

Using this model, the only things the user must manage are simply two other servers, the middle tier that sits between the client and the SQL server where the business processing takes place and the front the front-end web server. This gives a cost-effective solution that allows users to hit their performance targets without the headaches of managing the database server itself.

Crunching the Numbers

As you can see, there are a variety of deployment options, from total ownership and control to a fully managed cloud solution. In between, you can outsource some or all your on-premises deployment to a private or public hosting provider and they can manage the servers for you while you maintain in full control of everything. 

As you consider the advantages and disadvantages of your preferred deployment strategy, make sure also consider the costs associated with each, such as:

  • How much is it going to cost to deploy an Azure? 
  • What's my monthly cost for hardware and computational processing capabilities? 
  • What's my monthly storage cost?
  • How much data throughput do I need and what are the costs for that?
  • How much does it cost for me to host everything vs a fully managed solution?

While a SaaS deployment of Business Central is ideal for many companies, there are times when an on premises or hybrid deployment makes sense. It is important for you to consider your unique business needs and budget before selecting what works best for your company.

If you would like help going through the costs and capabilities of your options, contact us. ArcherPoint’s Managed IT Services team will help you select the best option for you.