Microsoft Dynamics 365 is in the cloud … so what?

By: Katie Erickson, Boyer & Associates

By now chances are good that you’ve heard of Microsoft’s big move with its latest accounting solution. Dynamics 365, the company’s newest Enterprise Resource Planning (ERP) product, joins the respected names of Dynamics SL, GP and NAV with at least one notable differentiator — It’s in the cloud.

What exactly does that mean and why does it matter?

Defining SaaS

First, let’s define what it means to be “in the cloud.” The term is notoriously ambiguous and has no agreed-upon exact definition. Some simply explain the cloud as a metaphor for the Internet while others refer to it as a network of servers. In general, the cloud refers to a non-local place to store your data and programs. Most cloud-based software is set up, stored and maintained on the Internet rather than on a hard drive somewhere. Dynamics 365 is a type of cloud product known as Software as a Service (SaaS). In short, this means that the product is set up online, paid for on a monthly basis and charged based on the number of users each month.

SaaS requires no hardware

The lack of hardware is perhaps the biggest difference from most traditional on-premise accounting systems. A SaaS product requires no internal infrastructure. You don’t have to spend your hard-earned money on expensive hardware or find a place to store the bulky pieces of equipment. Neither do you have to worry about your IT team setting aside the time to maintain that hardware equipment. Instead, any required software maintenance patches and upgrades are applied automatically, reducing the internal resources needed for those activities.

SaaS offers predictable software costs

With a SaaS-based product, you don’t have to worry about a large initial software purchase, any annual maintenance fees or upgrade costs. That’s because most of these products use a subscription-based pricing model that includes all those potentially additional costs. A typical ERP system generally requires a large, up-front software purchase as well as an optional annual maintenance fee. Dynamics 365, however, is sold as a monthly subscription with no added fees for maintenance or upgrades.

Benefits of a SaaS ERP/accounting solution

Here are just a few of the many benefits to choosing a SaaS product such as Dynamics 365 for your ERP/accounting needs:

  • Minimal up-front cost: As we already noted, a SaaS product with no hardware to buy and a monthly software subscription greatly reduces your initial purchase price.
  • No maintenance: Again, you have no hardware to buy, therefore no hardware to maintain.
  • Fast implementation: Though not always the case, SaaS products tend to be faster to implement than on-premise systems.
  • Knowable costs: Since it’s a subscription-based model, you don’t have to guess at a future budget or worry about upgrade costs.
  • Ready access: A SaaS product can work on any computer at any time so getting your employees set up is easy. All they need is a computer with Internet access and your permission to access the secure network.
  • Automatic upgrades: The upgrade process is easy and painless with a SaaS product. It’s as simple as turning on the computer to discover a new feature has automatically been updated by the software’s creators.

Cloud-based software is becoming more mainstream in every industry, often for one or more of the above reasons. While more companies are trending toward a cloud-based environment for their key business operations (including accounting/financial operations), SaaS isn’t the best solution for every company.

Not sure whether cloud-based or on-premise is the right choice for you? We can help. Visit for more information on the accounting options available to you
or call 763-412-4300 to set up a free consultation.