Business Central Cloud vs On-Premise: Pros, Cons & Key Considerations

Cloud Deployment – Benefits of Business Central in the Cloud

Scalability, Accessibility & Cost Savings

Deploying Business Central in the cloud offers small and mid-sized businesses a fast, flexible, and cost-effective way to modernize operations. Powered by Microsoft Azure, the cloud version eliminates the need for physical servers, IT maintenance, or manual upgrades.

Key benefits include:

• Rapid scalability as your business grows—no need for hardware upgrades
• Subscription-based pricing, making budgeting predictable
• Remote accessibility from anywhere, enabling mobile teams and hybrid workforces
• Seamless integration with Microsoft 365 (Outlook, Excel, Teams) and Power Platform

Did you know? Businesses that shift to cloud-based ERP systems report an average of 20–25% reduction in IT overhead within the first year, according to a Forrester study commissioned by Microsoft.

Security & Performance in the Microsoft Cloud

Microsoft Azure ensures enterprise-grade performance and protection for Business Central users:

• 99.9% uptime SLA backed by Microsoft
• Automatic security patches and compliance updates
• Built-in disaster recovery, multi-factor authentication, and role-based access control
• Encrypted data storage with regional hosting options

These features make Business Central Cloud not only efficient—but also secure and reliable.

When Cloud Is the Right Fit

A cloud deployment of Business Central is ideal for businesses that:

• Want a faster implementation with minimal IT infrastructure
• Have distributed teams or operate across multiple regions
• Prefer lower upfront investment with long-term cost predictability
• Need regular updates and innovation without internal IT strain

Explore Business Central Cloud Services at Volt Technologies

On-Premise Deployment – When Control Matters

Full Data Control & Customization Capabilities

For businesses operating in regulated industries, or those requiring deep system customization, deploying Business Central on-premise remains a strong option. This deployment gives you complete control over your data, your infrastructure, and how/when your system is upgraded or modified.

Key advantages of on-premise deployment:

• Data is stored locally, which may be required by certain compliance standards
• Custom code and vertical-specific extensions can be developed more freely
• Greater control over system access, maintenance windows, and IT policies

This level of control is crucial for organizations with unique requirements or in sectors like manufacturing, healthcare, or government contracting.

Licensing & IT Management Overhead

While on-premise deployment brings flexibility, it also comes with overhead:

• Requires a dedicated IT team or support partner to manage servers and updates
• Upgrades must be planned and executed manually
• Higher initial investment in hardware, licensing, and infrastructure
• Limited accessibility for mobile or remote users unless a VPN or hybrid setup is used

This model may not suit fast-moving, resource-constrained SMBs—but can be ideal for firms where compliance, stability, or custom workflows outweigh operational agility.

When On-Premise Makes Sense

Consider Business Central On-Premise if your organization:

• Operates in a highly regulated industry with strict data residency rules
• Has a legacy system that must be maintained locally
• Needs complex customization not supported in the cloud
• Prefers to own and control all infrastructure assets

Talk to Volt about custom Business Central deployments

Comparing Business Central Cloud vs On-Premise

Table 1: Feature Comparison – Cloud vs On-Premise

Table 2: Which Deployment Is Best for Your Business?

Hybrid Options – Can You Have the Best of Both Worlds?

While many businesses opt for either cloud or on-premise, some find that a hybrid approach offers the most flexibility—especially during transitional periods or in complex operational environments.

What Is a Hybrid Business Central Deployment?

A hybrid deployment combines elements of both cloud and on-premise models. For example:

• On-premise core system, but with cloud-based backups
• Cloud ERP, with local data storage for sensitive information
• Azure Stack deployments that mimic cloud benefits in a local data center

This model allows companies to balance control and compliance with modernization and agility.

Benefits of a Hybrid Deployment

• Maintain local data control while benefiting from cloud accessibility
• Leverage cloud scalability for peak workloads while preserving legacy systems
• Easier gradual migration from on-premise to full cloud adoption
• Integrate IoT or AI capabilities from Azure into an on-prem ERP setup

Microsoft continues to invest in hybrid cloud capabilities, offering flexible deployments through Azure Arc and Azure Stack.

Is Hybrid Right for You?

Hybrid deployment is ideal if:

• You’re in a regulated industry but want to start modernizing your systems
• You’re not ready to abandon your on-prem investment but need better remote access
• You want to experiment with cloud features (e.g., Power BI, Copilot) before full migration
• Your company is geographically dispersed and faces latency or compliance challenges

Final Verdict – Aligning ERP Deployment with Business Goals

Choosing between Business Central Cloud vs On-Premise isn’t about which is “better”—it’s about which aligns best with your business strategy, operations, and future plans.

If your organization prioritizes cost-efficiency, remote access, fast deployment, and a low-maintenance IT model, the cloud version of Business Central is likely the smart choice.

But if you’re working in a highly regulated industry, require deep customization, or need to maintain local control of your data, on-premise deployment can give you the power and precision your team needs.

If you’re somewhere in between, don’t worry—hybrid deployments offer a strategic middle ground.

Why Volt Technologies?

At Volt Technologies, we help SMBs make confident ERP decisions. As certified Microsoft Dynamics 365 Partners, we specialize in:

• Business Central cloud, on-premise, and hybrid deployments
• Tailored ERP implementation for your industry and goals
• Long-term support and training for your internal teams
• Integration with Power Platform, Copilot, and Microsoft 365 tools
• Ongoing scalability and optimization consulting

Not sure what deployment model is right for your team?

Schedule your free ERP strategy consultation with Volt Technologies