Faisal AL Rasheed Group - Egypt

Microsoft ERP D365 F&O

Deployment Option
Cloud vs On Premise.
Egypt-ERP-2023/1001
21/05/2023

Prepared and Presented By

Zafar Ishtiaq
Technical Terms used in the Slide show with meaning
Terms - Meaning
 MS D365 F&O - Name of the ERP system given by its production company
 Infrastructure - Hardware Setup required to run ERP system
 Deployment - Setting up the Hardware and Application
 Cloud - Refer to infrastructure setup available as a service pay as per usage
 On Prem. or On Premise - Refer to infrastructure setup on the customer location done by customer
 Azure - Name of the Cloud Services Given by Microsoft.
 ALM (Application Life Cycle Management - a term that covers all aspects of software development and the work necessary to manage it after developers deploy it to
production.
 Data center - A location with all required equipment for hardware setup to run ERP system. A data center require
Many supporting systems ,UPS – uninterrupted power supply, - A heavy Air conditioning system to
maintain the Temperature of Data center with a large amount of servers, various sensors and alert system,
fire fighting system etc.
 High Availability - Having minimum 2 servers for all critical application ( In case one Fail Other one runs)
 Disaster Recovery - Having a secondary datacenter with similar infrastructure (in case full data center fail like
building collapse or fire broke out Secondary site can run the ERP)
 Sandbox Environment - Test Environment ( Any ERP Change Requires to be tested prior deploying in Live or Production
Environment/customer need this setup to test and Deploy the required charges Functionality
 Production Environment - Live Servers setup where ERP is Running
 Elastic compute - A computer system which can be upgraded or downgraded quickly.
 Geo Replication - keeping a copy of the data on different data centers in different Regions of the world

 *please ask for any concept not understood clearly.

 Microsoft D365 Deployment options
 What to choose ( Cloud Or On Prem. )

 D365 F&O (finance and operations apps) can be deployed in the cloud or on-premises. Cloud deployments
offer an ERP service that is Fully managed by Microsoft, while on-premises deployments are deployed
locally within a customer's data center.

 *Important
 On-premises deployments are not supported on any public cloud infrastructure, including Azure. However,
they are supported to run on Microsoft Azure Stack HCI and Microsoft Azure Stack Hub.

 The following table provides a comparison of the capabilities provided by the two deployment options.
 Cloud vs On Prem. Basic Differences.
Description Cloud On Prem.
Infrastructure setup
( Data center hardware ) Microsoft Managed data center Customer or partner maintained Data center

Data trustee –( Custodian ) Microsoft Customer

Application Life Cycle
Management (
customization/new features, new
releases /testing/deployment )
*Managed By Microsoft Managed By customer or partner with cloud based
ALM using Life cycle management
Customer Access to ALM using Life Cycle Services

High availability , Disaster Provided by Microsoft - included in licensing cost Customer has to purchase and deploy same
Recovery and Sandbox hardware for High availability , disaster Recover,
UAT environment.(Three set of Hardware)
Environment (Test environment)

Intelligence and Analytics Ready made Analytics work space. Printing create and publish Power bi Reports
( power BI) reports from PowerBi.com
Software update provided thru LCS(life Cycle Services) Provided thru LCS ( Life Cycle Services )

Health Monitoring Microsoft Customer

Licensing Subscription Based perpetual with software Assurance fee annually

*Application Lifecycle Management (ALM) is a term that covers all aspects of software development and the work necessary to manage it after
developers deploy it to production. From design and planning to development and deployment and maintenance and bug fixes, ALM ensures that
applications function as intended and that developers can resolve problems quickly.
Why On Prem. vs Why Not
Customer may prefer On Prem.
Customers who choose to run D365 - finance and operations apps in their own data center :
 Use Of Existing Data center
 If customer has already invested in the data center with high availability and disaster
recovery. The same can be used for deployment of d365 as an on-premises deployment.
 Regulatory Compliance( Govt. does not Allow business type to run on cloud)
 If customer want to fulfill the regulatory and compliance needs of their business which
forces them to keep the data in their control, In other words some business has to keep
all business data only under their protection as per directions of regulatory authorities.
 Business is small n static with some hardware setup – No Growth plans
 For the customer who knows in advance that the business will not grow and the
implemented (pre-existing) data center will be good enough for many years to come with
some minor changes. No upgrade will be required no Scale up will required.
 Ready to make one time huge investment in hardware and manpower and wants to avoid
lifelong subscription cost.
Why On Prem. vs Why Not
Challenges of on Prem. Deployment
Customers must take on the following responsibilities:
 Stand up their own infrastructure. ( Setup a data center , Purchasing hardware / setup of hardware with partner or
itself/ on going support /spare parts)
 Configure their own high-availability and disaster recovery solutions. ( Double cost of Hardware, needs similar hardware for
high availability and triple cost for DR( Disaster recovery )
 Stand up sandbox environments. ( Test Environment – Same hardware for Major Servers ) additional cost
 Manage their infrastructure, including scheduling operating system updates. ( Man power cost - Deploying Qualified and
Experience Manpower to manage such a big setup)
 Purchasing Windows Server Licenses SQL server Enterprise License which is charges by processor core.(very
expensive)
 Tools for deploying the finance and operations apps and updates will be available to partners and customers via Lifecycle
Services.
 Advanced Analytics and Azure Machine Learning are not included in the on-premises deployment option.
 Power BI
 Without integration with Microsoft’s cloud services, on-premise users are not able to access business intelligence services such as PowerBI. Although
Dynamics 365 does have native reporting services, users cannot utilize PowerBI’s robust and perceptive analytical tools.
 Flow and Power Apps
 Other cloud-integrated services that on-premise users miss out on include PowerApps, a drag-and-drop app builder which Citizen Developers can use to
create mobile solutions, and Flow, a workflow creator that integrates apps and services with Dynamics 365 to automate repetitive tasks.
 Web portals
 Dynamics 365 in the cloud natively includes the ability to build and manage self-service web portals. These portals, which can be made available to
On Prem. Servers setup – server types
Type of servers required to run On Prem. setup
1. AOS servers – Application Object server , Host AOS (business logic). Minimum 3
2. SQL Database servers – application database server .
3. SSRS Server – Sql server Reporting services and reporting logic.
4. MR Management Report server – Management Reporter logic, financial Reporting.
5. SSIS – Sql server Integration Services - host the DMF service. ( these services can share an exiting sql
server server as well)
6. Orchestrator servers – Host deployment and servicing logic. Application deployment.
7. Retail server – Head office ( managing the company wide stores and data for POS operation.
8. Retail DB Server – POS level in Stores. Or centralized based on selected option
9. Windows servers to setup Domain environment min 3 – (DNS/DHCP with AD) here 3 serv. Means 3
sets of servers .
10. Backup servers min 2
11. Backup storage internal and external
On Prem. Data center setup
Minimum Required for Data center setup
1. Raised Floor
2. Down flow A/C system based on size of the data center
3. UPS – uninterrupted power Supply unit minimum based on the numbers of servers to be
supported during Power failure.
4. Firefighting system
5. Cable tray
6. Sensors and alert system ( humidity center – temperature sensor etc)
7. Some Split AC units for emergency purpose .
8. * One time investment but requires period checkup and maintenance contract for all services.
9. Repeat the same if build a DR site or take it on Rent .

10. * Cost estimation Required

On Prem. Servers setup – server sets and cost
calculation basis
Servers set required to run On Prem. setup
1. Sandbox server set ( test Environment ) 5 servers
2. Production Server Set ( 10 servers )
3. High availability serve set for production ( 10 server )
4. Disaster Recovery Server Set ( 10 server )

* For example - If production is having 10 servers 3 sets total 30 + 5 = 35 servers will be required
Serve cost depends on various factors
5. Technology
6. Brand
7. Specification ( size of the servers/ RAM /Hard Disk size / Processors Etc.)
• Servers will have additional licenses cost .
• Windows server license are also by core (now server license allows to use a copy for DR)
• Sql server – enterprise license is very expensive ( SQL Server 2016 Cost $27, 495 for 4
Enterprise Edition cores, $13, 747.50
• Appx. Cost calculation is required by taking local pricing. per additional 2 core
packs.
Why Cloud vs Why Not
 Easy and Quick setup.
 Deployment of initial setup takes few days instead of months
 Scale up or scale down as per usage and growth of the business is very easy .
 High availability as per Azure Cloud services.
 Disaster Recovery as per Azure Cloud services
 Sandbox ( Test Environment ) covered within the license cost.
 Deployment time Reduced :
 Cloud deployments provide a cloud service that is easy to scale up or down as needed, as well as data centers that are fully
managed by Microsoft. The time spent implementing finance and operations apps can be significantly shortened.
 Protection by Default
 Cloud deployments include high availability, disaster recovery, sandbox environments, and application lifecycle management
combined with cloud-based systems of intelligence, infrastructure, compute, and database services in a single offering. When
needed, data failover in the cloud, automated deployment and continuous updates, and elastic compute capacity are available. A
cloud deployment also provides data aggregation, financial reporting, and intelligence.
 System Performance supported by Microsoft:
 The cloud service provides customers with the greatest value, the broadest range of functionality, the best application lifecycle
experience, the easiest and broadest integration with Microsoft Azure services, the best option for business insights and
intelligence, and the most value for customers’ technology investments.
Cloud Environment protection Details
High Availability and Disaster recovery in Microsoft Dynamics 365 Finance and Operations
 High-availability - High availability for databases is supported through Azure SQL
 To ensure service availability, all production environments are protected by using default Azure high
availability (HA) features. HA functionality provides ways to avoid downtime caused by the failure of a
single node within a datacenter, and DR features protect against outages broadly impacting an entire
datacenter. Azure availability sets are used to prevent single-point-of-failure events.
 Disaster recovery

Production environments are configured with Azure disaster recovery support that includes the following:
Azure SQL active-geo replication for primary databases, with a Recovery Point Estimate (RPO) of < 5
seconds.
 Failover groups and active geo-replication.
Geo-redundant copies of Azure blob storage (containing document attachments) in other Azure regions.
Same secondary region for the Azure SQL and Azure blog storage replication.
Cloud deployment challenges.
 Data Custodian
 Data is not fully controlled by customers as it is stored on a data center of Microsoft.
 Risk of Data Breach :
 Microsoft legally not allowed to keep a copy of the data for any of the business purpose but technically they
can do any thing with the data.
 Subscription model
 Cloud is a continues payment model and number of licenses used can not be hidden from the Microsoft.
However Microsoft is flexible to start using the system with extra license and include later date option.
 Risk of Business stop in case of a non payment for a long time:
 Microsoft has power to shut down the operation of the ERP system in case of non payment for a long time
without mutual understanding.
 Hidden Cost *
 If data grow more than the allowed capacity per licensed user then there are additional charges for storage from
Microsoft but very minimal as storage on cloud is not that very expensive.
 Some Azure Services available with on cloud but carrying separate charges.
 IF price are not fixed for multiple years with Microsoft- There is possibility that Microsoft can change the price.
License Cost calculation Basis for Both models
 It is difficult to compare both models license cost because on prem. requires huge investment in
hardware and manpower also , depending on the type of hardware you select the cost will go up or
down.
 On Premise licensing has 2 component
 Server License and USER CAL ( Client Access license ), Enterprise user, Functional User, Activity User , Device license
 Minimum 3 servers license Required to run the D365 but for Retail business more license is required
CAL ( Client Access License Required ) are having different prices for different type Enterprise user, functional user etc.
Cost of a single license for a basic on prem. Setup.

Operations Server USD 7,500.00

Operations User CAL (Named User) USD 4,500.00

Activity User CAL (Named User) USD 1,200.00

Team Member User CAL (Named User) USD 190.00

Device CAL (Named User) USD 1,800.00

 * These are standard prices , these prices can be Negotiated with the partner and Microsoft.
 Windows server standard license
 Sql server license for head office DB
 Sql server license for stores if we go for store server model and use sql server standard(express no cost)
* this cost may be common for both deployment optins.
License Cost calculation Basis for Cloud
Cloud Model licensing is simple
 180 USD/Monthly for Full USER finance/supply chain - Minimum 20 pack is Required
 Attach app finance 30 USD
 Attach app supply chain 30 USD
 Additional user non attached
 50 USD Monthly Activity User
 75 USD Device license also cost
 8 USD Monthly Team member Limited functionality
 Initially minimum 20 full user license pack is required to run D365 finance and Operation : 20*180 =3600*12= 43200
USD yearly minimum not exactly applicable for Retail business as we need to add device and activity license cost
based on number stores. This amount will increase based on number of stores.
• Please keep in mind there are different discounts available from partners and promotions from
Microsoft.
• 10% , 20%, 30% and 40% discount of standard pieces possible.
• Based on Actual Users and number of stores , appx cost can be calculated
• A detail calculation and estimation can be done for both models . Above given detail are good to
have an idea of estimated cost and growth of the cost in both deployment models
Recommended Deployment Option
Partners Recommendations
 Microsoft has made it clear that the future of their business applications is in the cloud. If users want to be able to keep up
with developments and remain competitive, a move to the cloud is inevitable. Implementing Dynamics 365 on-premise
ultimately puts organizations at a disadvantage when it comes to the tools they can access, and the services they can offer
their customers.
 So far I have talked to at least 4 partners in Egypt and 2 in Dubai and 2 in India and 1 in Pakistan.
 Retail Group Egypt
 Bi technology Egypt
 Retail Realm Egypt
 Compact soft Egypt
 TechRev Egypt
 TSC Dubai
 ERPBrains india
 *Non of them advising to go for On Prem. all of them are advising to go for Cloud model.
 *90% of D365 implementation are on cloud
 over 59390 companies using D365 all over the world

IT Department is open for Both Options but Recommendations given as below :

 Having understood Both the sides we have come to a conclusion that Cloud model is best suited for any business in the current
situation .
 Purchasing hardware / managing hardware and application by our own is good but time consuming very costly initially and maintaining
the application and performance is life long problem.
 I have been managing an on prem. Solution for many years and I know how difficult it is to maintain a system which requires . High
availability/disaster recovery and Test environment , with high data growth and requires same performance year after year.
 I did not have a cloud option back in 2014-2015.
Next step
 Any Questions or Query from management will be answered immediately.

 We need a quick decision to have a clear road map for deployment

immediately.

 Kindly let us know Management Direction

……………………………………………………………………………………………………………………………..
Thank you