There is great discussion about the merits of the online and on-premise solutions. While the core functionality of Microsoft Dynamics CRM is the same in both (full-suite of Sales, Marketing and Service functionality - as well as workflow automation and customization capabilities), there are some considerations that might best determine which solution is best for your business.
- On-premise: Customers purchase the licenses and run the application on their own servers.
- Online (on-demand): Customers subscribe to the software service on a per user per month basis, and is hosted in Microsoft corporate datacenters, delivered to customers over the Internet.
The differentiation comes in the level of customization available and the authentication mechanisms used with each deployment option. The table below shows a comparison between the on-premise and online solutions:
| On-Premise | CRM Online | |
|---|---|---|
| Authentication Method | Active Directory | Windows Live ID |
| Authentication Interface | Integrated Active Directory / Forms based | Windows Live ID |
| Custom Entities | Yes | Yes (100/200)* |
| Custom Workflow | Yes | Yes (100/200)* |
| Form Scripting & Events (Jscript) | Yes | Yes |
| Custom Reports Built with Ad-hoc Wizard | Yes | Yes |
| Dynamic Export to Excel | Yes | Yes |
The number of customer entities and workflows depends on the product edition
Many CRM Online users find comfort in the fact that the hosted (online) product provides a foundation for growth – when a business finds need to transition to the on-premise solution, the migration is seamless and easy.



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