The most appropriate delivery model for each business process is dependent on the unique characteristics of each company and its industry. But whatever a company's situation, Microsoft is committed to providing the greatest amount of choice in software delivery. Ultimately, Microsoft believes every company will want to distribute its processes across three delivery models:
On-premise. Companies host their Microsoft Dynamics software at their own location, on their own servers. This offers maximum opportunity for integration with other IT systems. Often, companies choose on-premise deployments when their IT organization has established domain expertise for that process or technology. They also choose this option when their business processes involve sensitive data or have special requirements that differentiate them from the competition.
Partner-hosted. Microsoft partners, including independent software vendors (ISV) and system integrators, offer hosted Microsoft Dynamics applications in their area of expertise. Microsoft partners operate all over the world, so you get an industry expert from a local company. Their solutions are often ideal for specific vertical processes or for highly customized processes with precise requirements.
Microsoft-hosted. Microsoft Dynamics CRM Online is hosted in Microsoft data centers and offered directly from Microsoft on a subscription basis. Microsoft Dynamics CRM Online uses a single, multi-tenant code base so that customers can switch between on-premise and on-demand deployments as their needs change. In addition, connect your Microsoft Dynamics ERP solution to a number of online services for Microsoft Dynamics ERP that are managed by Microsoft experts in our secure data centers. Choose from several services to amplify the value of your ERP solution.
Determine your business drivers
The unprecedented flexibility of software delivery that is available to customers today represents a tremendous opportunity to reduce costs, strengthen core capabilities, and speed business agility. When considering which delivery model to use for a particular business process, make sure to examine the various business drivers.
Cost. Requirements for the application can help you to determine which approach is most cost-effective. Unlike conventional onsite ERP solutions, a hosted ERP solution does not require a substantial upfront investment. When the solution is purchased as a service, hosting replaces upfront expenditures with predictable, regular monthly pricing for the customer—usually calculated on a per-user, per-month basis, and often based on consumption.
Differentiation. Business processes that are core to your business and take advantage of in-house expertise typically remain on-premise. But commodity processes can be outsourced.
Time-to-market. Hosted applications often can be deployed much faster than on-premise solutions, so you can implement new or changed processes more quickly.
Resource availability. On-premise deployments often require more time and money than deployment of a hosted application. If budgets are tight or your IT department does not have free resources, you can still meet your business’ needs through hosted applications.
Process affinity. Some processes are inherently more suited to either hosted or on-premise deployment. E-commerce and supply chain operations often rely on hosted applications, whereas material requirements planning is normally deployed on-premise.