Finance + Operations on-premises and cloud-based finance and operations apps


You can deploy finance and operations apps in the cloud, or Finance + Operations (on-premises). As a developer, it's important for you to understand the difference between these architectures. Depending on the type of deployment that your organization chooses, architecture and the application capabilities might vary.

Cloud architecture

Cloud deployments offer a service that is fully managed by Microsoft. By choosing a cloud deployment, the application is simple to scale up or down, depending on the needs of the business, with data centers that are all managed by Microsoft. Cloud architecture has several benefits, including shorter implementation, fewer required customizations, and a reduced cost for IT infrastructure.

Cloud deployments allow customers to stay current in a consistent, predictable, and seamless manner. This cadence, which allows continuous updates of the application, aims to lower upgrade costs, provide everyone access to the latest capabilities, improve performance, and offer a better support experience.

The architecture for cloud deployment includes several main components:

  • Subscription - A subscription to finance and operations apps gives you an online cloud environment.

  • Licenses - Customers must purchase subscription licenses (SLs) for their organization or for their affiliates' employees and on-site agents, vendors, or contractors who directly or indirectly access finance and operations apps. finance and operations apps are licensed through Volume Licensing and the Cloud Solution Provider (CSP) program. See Microsoft Dynamics 365 Licensing guide for more information.

  • Microsoft Entra ID - Microsoft Entra ID is the multi-tenant, cloud-based directory and identity management service from Microsoft that combines core directory services, application access management, and identity protection in a single solution. Finance and operations uses Microsoft Entra ID as the store for identity. Access to Microsoft Entra ID is provided as part of a subscription to finance and operations apps.

  • Tenant - In Microsoft Entra ID, a tenant represents an organization. This is a dedicated instance of the Microsoft Entra ID service that an organization receives and owns when it creates a relationship with Microsoft (for example, by signing up for a Microsoft cloud service such as Azure, Intune, or Microsoft 365). Every Microsoft Entra tenant is distinct and separate from other Microsoft Entra tenants.

  • Microsoft 365 Admin help center - A subscription management portal that Microsoft 365 provides for administrators. It's used to provide management functions through Microsoft Entra ID and subscriptions. As part of these management functions, it provides information about service health.

  • Lifecycle Services - Is a collaboration portal that provides an environment and a set of regularly updated services that can help you manage the application lifecycle of your finance and operations implementations.

  • Azure DevOps - Used primarily for code version control and to deploy a build environment. Azure DevOps is also used to track support incidents, such as work items in Azure DevOps that are submitted to Microsoft through cloud-powered support, and to integrate the Business Process Modeler (BPM) library hierarchy into your Azure DevOps project as a hierarchy of work items. Azure DevOps is also used during code upgrades.

Finance and operations apps use many features of the Azure platform, such as Azure Storage, networking, monitoring, and Azure SQL Database. Shared services put into operation and orchestrate the application lifecycle of the environments. Together, Azure functionality and Lifecycle Services offer a robust cloud service.

On-premises architecture

Finance + Operations can be deployed on-premises. This means that the application is deployed locally within the customer's data center, and the data center is managed by the customer. It's important to remember that because an on-premises deployment is locally deployed, system requirements, hardware sizing, and functionality of the application differs from cloud deployments.

When an on-premises deployment is selected, the application servers and the Microsoft SQL Server database are run in the customer's data center. Identical to a cloud deployment, Lifecycle Services is used to manage the on-premises deployment. To build and manage an enterprise-class, high-scale application, on-premises deployments use Microsoft Azure Server Service standalone clusters. The Service Fabric standalone clusters can be installed on any machine that is running Windows Server. There are two types of clusters: one for sandboxes and one for production environments. Application Object Servers (AOS), Financial Reports Designer (formally named Management Reporter), and SQL Server Reporting Services (SSRS) are roles that are deployed in both the production and sandbox clusters.

When deciding which type of deployment your organization should use, you should consider the overall approach of the implementation and the management of the infrastructure. Additional considerations include the organizational preferences to meet regulatory and compliance needs of the business. With a cloud deployment, the structure is completely managed by Microsoft. With an on-premises deployment, the customer takes on more responsibility and has additional costs. Examples of additional costs could include standing up your own infrastructure, configuring a high-availability disaster recovery solution, standing up sandbox environments, and managing the infrastructure.

Keep in mind that there are differences in features that are available for cloud and on-premises deployments. Microsoft offers a list of specific features that differ from each of the deployment types. For more information, see the Summary unit at the end of this module.