Explaining the business value of CRM in the cloud

A while ago Paco Contreras has made a very interesting post on business value of CRM in the cloud, you can find the post “Demystifying business value of CRM in the cloud” on the Microsoft Dynamics Blog. In my opinion his post is a bit on the long side, lacks a few explanations and misses some illustrations. Whereas the info-graphic by IDC captured all the relevant data you need. In case you missed it, here it is (Or you can download the .pdf file here: Microsoft_CRM_Cloud_Infographic): slide-1-638 Furthermore I have summarized the post from Mr. Paco Contreras:

On-premises aspects

In a typical ‘on-premises’ deployment a customer will be responsible for managing all following aspects:

  • purchasing, installing software and hardware, providing the necessary storage,
  • network and data centers needed to achieve global scale, trouble shooting, support, updates and upgrades
  • and work hard to achieve security and compliance as required by the business and regulators.

On-premises costs

  • Allocated cost per user = the cost of accessing and using the software (not the cost of managing the solution).
  • A lot of variables are involved in managing an on-premises deployment for the complete lifecycle of the application. These variables are the aspects which are mentioned earlier in this post.

Online aspects

In an ‘online’ deployment Microsoft will be responsible for managing all following aspects:

  • Networking, Storage, Servers,
  • Middleware, Runtime, O/S,
  • Hardware and software.

Online costs

  • Plans priced on a per user per month basis

Microsoft Dynamics Sales CRM_ Pricing & Licensing What to check when making a decision between online Vs on-premises

“You need to look at what the opportunity cost is in the marketplace- the time and money you spend on in-house resources versus pursuing your core business opportunities in the market.” – Mary Wardley (IDC)

Why pick a cloud deployment?

  • IT staff spends 20% less time on routine service maintenance and has twice as much time to invest in IT strategy.
  • Because deployments are three times faster in the cloud, 54% more of sales staff will adopt the solution and in half the time.
  • Once deployed, users will enjoy 93% less service down time.

Editorial notes:

What is the cloud revenue for Microsoft?

When taking a closer look at Microsoft earnings for 2015 Q3, you’ll truly notice the grow in commercial cloud revenue, catalyzed by Dynamics CRM Online:

Commercial cloud revenue grew 106% (up 111% in constant currency) driven by Office 365, Azure and Dynamics CRM Online, and is now on an annualized revenue run rate of $6.3 billion

How does the cloud future look like?

Well, nobody can exactly predict the future, but these new numbers published on Forbes suggest that cloud computing will grow exponentially in the coming years. By 2018, 62% of all CRM software will be cloud-based, with Salesforce solidifying its market leadership position.

Where is my cloud data for Dynamics CRM Online stored?

Your CRM organization location determines where your data will be stored. Microsoft has several major data centers around the globe. I will be posting more about their data centers, privacy and cloud storage in a future post. Data centers Microsoft


  1. Michael M

    Ok… so few points – there is no doubt that the total cost of ownership is LIKELY to be reduced, but let’s be practical. Pushing to put an application in the cloud and then using the TCO argument makes no sense compared to convincing a company to go ALL IN and put EVERYTHING in the cloud. The fact is if you compare cost of Online vs. On Premise without ALSO ridding them of all the components of their in-house infrastructure, Online is likely to be more expensive. Furthermore, some companies simply CANNOT go online, and in that case putting a 6 month delay between major feature releases that those in Carina that won’t find their way into On Premise for 6 months shows WAY too much preference for online customers, and gives the appearance of a disregard for On Premise customers who cannot make the move.

    Let’s agree that CRM Online is better BECAUSE Microsoft has chosen to only add valuable features to it, and that companies have to go ‘all-in’ to make the TCO argument a reality.

    1. Hi Michael,

      I think you are spot on.

      I’m not quite sure about the TCO argument in the future, but I do agree that certain companies cannot go online and because of it they do miss certain updates/releases.

      What do you think about the added features in CRM online. Are they worth making the switch from CRM online to CRM On Premise?

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