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Dynamics 365 On-Premise to Cloud Migration Roadmap

Updated: April 29th, 2025 by Ivan Farafonov

Dynamics 365 on-premise to cloud migration is the process of replacing data from local services and storage systems with external ones. Thus, you will keep all the information not on your business infrastructure but on the services owned by the third-party provider. This approach has many advantages: you can scale your systems and the amount of materials, ensure regular updates, and make your software available from different spots.

Let’s look at the latest statistics to understand the importance of cloud migration. According to Zippia, 94% of enterprises use cloud services, and 67% of corporate infrastructure is cloud-based. In addition, 92% of companies have a multi-cloud strategy that has already been implemented or is under development.

So, why is Dynamics 365 on-premise to cloud migration a priority solution for your company’s development, and how to make the transition? In this article, we’ll look at the key benefits of cloud services, consider the implementation process step by step, and explore ways to make the migration easier for your company.

Why Do You Need to Migrate Dynamics 365 On-Premise to Cloud?

There are several reasons why modern companies choose to rely on cloud services. The fact is that the cloud offers much more flexibility and ease of support than the on-premises version of Dynamics 365. The benefits start right from the start, because you don’t have to deploy your hardware with experts on your side: you just buy a subscription and get instant access. You also relieve yourself of the responsibility for maintaining the environment: this task remains with the provider. And most importantly, if you need additional space, you can add it to your monthly subscription, instead of having to set up a long infrastructure configuration.

Let’s take a closer look at what benefits you get with Microsoft Dynamics in the cloud:

Highly Flexible and Adaptable

One of the biggest advantages of cloud hosting is its flexibility and readiness to scale. For example, you can increase or decrease the amount of storage and the size of your software quickly and without investing in additional infrastructure. Just select a different subscription plan and get space instantly.

Lower Costs

When you go with an on-premises solution, you invest upfront to install hardware and servers, rent physical space, and hire technical management staff. It’s a significant expense right at the start of your business, when every penny counts. In contrast, with cloud storage, you don’t worry about maintaining physical infrastructure, as everything is covered by the server owner. At the same time, you pay a subscription price for access and get a well-functioning and highly supported environment.

High Security

One of the most important issues related to data and its storage is its security, and here, the cloud version is unrivaled. The fact is that in Dynamics 365 Cloud, all your information is stored on highly secure servers owned by Microsoft. It literally makes it impossible to leak confidential information and allows you to stay safe. Plus, you get regular security updates to keep your system protected from new threats.

Smooth Integration

A common cloud infrastructure allows you to combine not only Dynamics 365 modules, but also other Microsoft solutions such as Power Platform, Outlook, Teams, SharePoint, etc. Thus, you create a collaborative workspace where all information about customers, emails, meetings, or finances is at your fingertips.

Improved Data Management & Accessibility

With a shared cloud, all your data is in one place. But that’s not all the benefits. By migrating data from your local network to the cloud, you gain extensive collaboration capabilities within your company and even with third parties. This way, your employees (both in-office and remote) work together in synergy, as they are connected to a shared server. What’s more, collaboration takes place in real time, and data updates in files and systems are instantaneous.

On-Premise vs Cloud Infrastructure Comparison

Feature	Dynamics 365 On-Premise	Dynamics 365 Cloud Infrastructure
Deployment	❌ Requires local hardware setup	✅ No local setup required
Customization	✅ High customization options	❌ Some customization limitations
Updates	❌ Requires manual updates and patches	✅ Automatic updates and patches
Scalability	❌ Limited by local hardware	✅ Highly scalable and flexible
Security	❌Low security measures	✅ Managed security, industry standards
Costs	❌ High upfront costs	✅ Subscription-based, lower initial cost
Disaster Recovery	❌ Requires manual recovery setup	✅ Built-in disaster recovery options

Explore key features and go with our MS Dynamics 365 on-premise to cloud migration guide to improve your infrastructure!

How to Upgrade Dynamics 365 CRM On-Premise to On Cloud - Step-By-Step Guide

CRM migration to cloud occurs in several stages. It is a complex process, as it must take into account all the subtleties to ensure the confidentiality of information and a quick launch. Read the step-by-step instructions below to begin the transition process:

Assess Your On-Premises Configuration

First, you need to analyze your existing system. Pay attention to the tools you use, the amount of data you handle, and how long it will take to migrate them to the cloud. Also, note the custom settings and integrations that need to be replicated in the new software. If you are missing something in your system or have extra elements, take this into account to avoid such problems in the new setup.

Choose a Deployment Option

The next step is to choose the most relevant deployment option for your software: public, private, or hybrid. Here’s a little about each:

If you choose the public cloud, your Dynamics 365 instance will be hosted on a shared infrastructure managed by a third-party provider, Microsoft Azure. This option is cost-effective because you don’t need to invest in hardware or manage the infrastructure. It’s ideal if you need scalability, flexibility, and automatic updates without complex setup.

With the private cloud option, you get a dedicated environment hosted on-premises or with a third-party provider. This model is suitable for companies that need more control over sensitive data and security. Keep in mind that this option involves higher initial costs.

A hybrid cloud combines both public and private environments. This way, mission-critical applications and sensitive data can remain on the private cloud, while less sensitive workloads are hosted on the public cloud. This is a great option if you’re looking for flexibility and efficiency without compromising data control.

Create a Migration Roadmap and Plan

Next, create a detailed plan for your migration. It should include the scope and deadlines of the project, the required features and integrations you will work on, and the tools you plan to use. Simply put, this will become your road map for a successful migration.

Prepare Your Data for Migration

Once you have a plan, you can start working directly with the working environment, namely your legacy system. At this stage, you need to prepare your data for migration. This includes:

cleaning and updating materials;
removing duplicates;
fixing errors;
ensuring security.

Conduct Data Migration

It’s time to start the migration process. Here, we recommend being careful and checking all the steps several times to make sure that the information is transferred correctly. In general, you need to export the materials from your on-premises Dynamics 365 to a file, use the third-party tool chosen during the planning process, and import the information into the cloud. You can perform a test run to check that everything is done correctly and fix problems if not. If you need help with this step, request our Dynamics 365 migration services.

Customize and Integrate

Get your new system up and running. Follow a plan to implement custom features, set up integrations, and adapt the new work environment to your operations. Don’t forget to set up role-based access and permissions to ensure seamless use of the platform and protect data from unauthorized parties.

Post-Migration Testing and Support

Once all the settings are in place, test your new environment in real-world conditions. This allows you to identify gaps and issues and fix them immediately before they become critical. Keep in mind that your software will also need support. While server and security updates will be automatic, you will need to make sure that all features are working properly and that the flows are healthy.

Final Words

To sum up, Dynamics 365 on-premises to cloud migration is a complex process that requires a careful approach and attention to detail. However, when you do everything well, you get a lot of benefits and can work with a reliable, flexible, and well-secured infrastructure.

If you are looking for ways to make the migration easier, consider our on-premise to cloud migration consulting. Our experts will help you assess your on-premises system, create a reliable implementation plan, and perform the migration efficiently and quickly. As a result, you move to the cloud and start working with all the tools at your fingertips.

Do you need help with Dynamics on-premise to cloud migration?

Request our consultation to get professional assistance!

Some of Our Migration Experts

Christoph G.

– Power BI, Power Apps, Power Automate consultant

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Alexander K.

– Power Platform Developer with SharePoint Experience

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Franz E.

– D365 Business Central Solution Architect

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Finn V.

– Dynamics CRM Consultant

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Dorothee H.

– D365 CRM Developer

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Elodie A.

– Microsoft Dynamics 365 Consultant with Finance Background

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Robert M.

– Senior Microsoft Dynamics 365 Developer

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Franka M.

– Dynamics 365 Supply Chain Architect

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Adam H.

– Microsoft Dynamics 365 Supply Chain Business Analyst

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Andreas D.

– Dynamics Supply Chain and Warehouse Management Consultant

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By Ivan Farafonov

I'm passionate about sharing my extensive experience in Microsoft and Dynamics 365 technologies. Beyond the technical realm, I excel in recruiting and building high-performing teams, ensuring every project is executed with precision and collaboration. As a contributor to HireDynamicsDevelopers, I share my insights on maximizing Dynamics 365’s potential, blending technical expertise with strategic team development. My passion lies in both technology and fostering talented professionals to achieve outstanding results.