Quick Compare: Microsoft Dynamics CRM Online vs. On Premise

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If you’re reading this post, you’re probably at least beginning to understand that Microsoft Dynamics CRM is available in two separate versions, Online and On Premise. As a Microsoft partner that sells and supports Dynamics CRM, one of the questions we hear most often from prospective clients is, “How do I decide which version of Dynamics CRM is right for my business?” In an effort to help ease this confusion, I’ve created the table you see below listing simple criteria for you to consider. If the left side of the table most closely describes your situation, you are likely a good candidate for Microsoft Dynamics CRM Online. Or, if you identify more so with the right, On Premise is apt to be a good fit for you.

Choose Dynamics CRM Online if you:

Choose Dynamics CRM On Premise if you:

  • Do not want to invest in hardware and software license fees.
  • Want to pay only for what you need (users and storage space).
  • Do not have or plan to hire IT staff (in house or a local consulting firm) to maintain your CRM system.
  • Want to get your CRM system up and running in days, not weeks.
  • Have traveling staff members who need to be able to easily access CRM data when they’re away from the office.
  • Do not want to worry about backing up the system.


  • Have the budget to invest in the necessary hardware and software licenses.
  • Have dedicated IT staff or local consulting firm to help you maintain the system.
  • Already have solid data backup processes in place.
  • Don’t want access to your CRM data to depend on the availability or speed of your internet connection.
  • Have a very large database with a great deal of attachment needs.*
  • Have extensive customization needs.**
  • Feel uncomfortable storing sensitive client data on another company’s server.
  • Need to use custom SSRS reports based on "TSQL and filtered views" data sets.***


* Dynamics CRM users are charged per GB of storage space they use. However, if this is the only thing keeping you from choosing Dynamics CRM Online, these costs can be mitigated by using a separate document storage solution i.e. SharePoint.

** Fully trusted plugins are not supported. Whenever you create plugins for Dynamics CRM online always test your plugins in sandbox mode. Dynamics CRM online only supports plugins to run in sandbox mode.

*** Dynamics CRM 2011 online only supports Fetch XML based custom reports.

All that being said, this information is meant to be a starting point for your research, not a definitive answer as to which system you should choose. For further reading on the subject, see Microsoft Dynamics CRM 2011 – Limitations of Dynamics CRM Online Vs On Premises, Microsoft Dynamics CRM On-Premises Overview and Microsoft Dynamics CRM Online Overview.

If you have questions and would like to discuss you specific needs with an expert, please feel free to contact us. We’ll be happy to help!

By: Laura Heinbockel, Intelligent Technologies, Inc., a North Carolina Microsoft Partner.

4 thoughts on “Quick Compare: Microsoft Dynamics CRM Online vs. On Premise”

  1. Erik,

    The Data models are the same and you can migrate fairly easily after 6 months. There will be some additional cost to convert for services.

    The Online version is updated more frequently than the on premise version. So there could be slight differences between the two versions.

  2. Is there a difference between the underlying datamodels between the hosted and on-premise version of Microsoft CRM?

    If we start with the on-premise version, is it easy to migrate our database to the hosted version of Microsoft CRM after 6 months?

  3. Hi Tarek,

    The Development/customization environment is the same. The limitation of hosted is that you not have access to the server so you could not do a “hack” type of integration.

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